Living as a Location Independent Professional does come with some unique challenges, especially when it comes to money & finances…
Here are some of them:
- Having to stump up for 2-4 months rent all in one go for your advance payment & ‘preferred’ long term rates. Most owners would rather be flexible than lose such a great booking on their property, so this is often negotiable, just ask & you can then pay monthly, which is more ‘do-able’ for most people.
- Big charges to your credit cards when you’re booking up all your flights & routes. This is worth doing however, as you get cheaper flights by booking multi-stop routes than individual flights and if you also use a credit card which gives you reward points, miles or cash back, then you get something extra for it too.
- Getting used to multiple different currencies. I use www.xe.com to get the latest exchange rates when I’m in a country and then plug them into my mobile phone so I can use it when I’m out & about until I’m used to doing the mental calculations in my head.
- Working out your tax liabilities as an expat or ‘non-resident’. For this, it is worth contacting the Tax Office in your home country to confirm your tax liabilities as a non-resident.
Note: Of course, if you’re from the US, you are taxed on worldwide earnings, so you can’t get away from that unfortunately.
We set up a Panamanian Corporation, on the advice of my UK accountant. The benefits of this mean that as we are non-resident in the UK and our business is also now not registered there, we’re not subject to UK tax. In Panama, if your business generates revenue from outside of Panama, you are again, not liable for tax. But it is worth getting professional advice for this to ensure you stay within the laws of the relevant countries.
- Understanding when you’re being ripped off as a foreigner in a foreign country. My take on this is as follows: if you are happy with what you are paying for something, and the vendor seems happy with what you are paying too, then you are not being ripped off. It’s all about value – and being clear about how much you are willing to pay for something versus what it’s actually worth. Panama was a pretty bad place for this – it seemed common practice to charge foreigners much higher prices than they would the locals (in taxis, craft shops, etc.). You need to find a friendly local (we asked our Spanish teachers for the low-down) who will give you an idea of what you should be paying and then stick to this price. See earlier posts for the cost of typical prices you should expect to pay in Panama.
