Tax havens with often tropical climate might seem an attractive destinations to live or retire abroad. However in most cases they are just not the best places to live. Why not? I am glad you ask. Well, tax havens attract a lot of money from investors all over the world. As a result prices and living costs go to the ceiling. Think for example about Singapore. It is clean, it is safe, taxes are low,…, but unless you do business or work in Singapore, you will be better off to live in Malaysia, which is neighbor country, with not as high, but decently high standard of living. Prices and living costs are on the contrary much lower than those in Singapore and you can afford much higher quality of living for the same price as in Singapore, with thousands of dollars savings for rent only.
Singapore is in the arms reach, you can take a cheap flight from Kuala Lumpur, which takes around 1h, so you are there fast to do business as you please. Malaysia also offers 90 days staying for most Westerns so you only have to exit country every 3 months and don’t have to deal with visa bureaucracy, like in many countries, which saves a lot of nerves.
So only time one should consider living in tax haven country is if he has a significant wealth to cover expenses, or if he works or do business in tax haven country. However, when it comes to living there, it is best to live in the nearby country instead, which often offers almost everything to a certain degree what tax haven country offers, but with significant lower costs.
Additional bonus is that you further diversify your way of living with having citizenship in one country, residence in another, offshore account in another, business in another… This way you are safe from political and economic instability from any of those countries, all while having a maximum privacy and protection from turmoils.
Hong Kong, Singapore, Bermuda, Cayman Islands, Monaco, Liechtenstein, Luxembourg,… all these tax havens are pricey to live in, so why not lower your cost and live in the adjacent country instead. Instead of living in Singapore live in Malaysia, instead of Gibraltar live in Spain (even if you work or do business in Gibraltar you should live in Spain and commute to Gibraltar daily), instead of Panama think of Colombia…
Even if you run your business, you can easily avoid living in tax havens. Although we said that living in tax havens is acceptable for those with jobs and businesses there, you can make and execute a plan on how to live in adjacent country, while you run your business in tax haven, to legally avoid being taxed. So you run business in tax haven and live as a tourist in different (adjacent) country.
Your rent will be much lower, quality of life much higher (for the same amount of money you’d spend in tax haven), entertainment options bigger and more often than not you will be treated better.