WBD377 Audio Transcription
F**k You Passports with Katie The Russian
Interview date: Monday 26th July
Note: the following is a transcription of my interview with Katie The Russian. I have reviewed the transcription but if you find any mistakes, please feel free to email me. You can listen to the original recording here.
In this interview, I talk to Plan B Passport Founder, Katie the Russian. We discuss flag theory, the state as a service provider, why some nation-states will fail to compete in a free market and how Bitcoin enables all of this.
“As the world becomes borderless for us remote workers and people with borderless money...we don’t see the borders anymore; and because of that the borders will start to fall.”
— Katie The Russian
Interview Transcription
Peter McCormack: Katie, the most delayed interview ever. How are you?
Katie The Russian: I'm pretty good, glad to be here. How are you?
Peter McCormack: I'm good. How many times have I cancelled on you for this; is it three, four?
Katie The Russian: Somewhere around that, but it was all good. Actually, every time it worked out for me as well.
Peter McCormack: Listen, this is a hot topic; we've spoken about it before. My other podcast, Defiance, we made a show about the different kind of arrangements people are looking into, migration of people. I've spoken to a few guests, but not all bitcoiners listen to my other show and I know a lot of people have interest in this subject of multiple passports, especially over this last couple of years where people have been locked down in countries, haven't been able to go anywhere; specifically, it felt like their home is a prison.
You are the person I know who knows most about this, so it's great to get you on to talk about this on the show. I've also sent people your way, because people have asked me about this and the work you're doing. So, it's great to see you and it's great to get you on and talk about this, Katie The Russian. I think a good starting point is, you call it Flag Theory. Is that an international definition or is this your thing?
Katie The Russian: No, it was a thing for a while and at first, it was Three Flag Theory, Five Flag Theory. Now people call it Seven Flag Theory, but I just refer to that as Flag Theory. By my own definition of it, the idea behind the concept is to limit your dependency on any one particular state as well as to stack flags in the jurisdictions that might be beneficial for you in various ways for your business, for you personally, for family lifestyle or obviously for your tax regime.
Peter McCormack: As something you've done yourself personally, you should probably give the background, because you were an international sports star.
Katie The Russian: I'm an immigrant myself, so the idea of leaving my home country in order to find new challenges, new opportunities, a different lifestyle didn't seem crazy for a 20-year-old Katie at all. So back then, being a Russian tourist in the US, I personally started playing jurisdictional arbitrage at a very, very small scale without even realising it. As I was doing it, I realised there must be people that have taken it to a whole other level and it must be a thing. Sometime later, I started to form this concept of Flag Theory and I was like, "Dammit, this really fits my philosophy. This is perfect, I'm going to look more into that".
I'd already got into Bitcoin, so I started meeting different interesting people. In Miami, I met another Russian immigrant who was already doing the passport stuff and the reason he reached out to me is because a lot of his Russian clients started getting at him, "Do you accept Bitcoin? Can I pay in Bitcoin?" and he knew nothing about it. The only person he knew who talked about Bitcoin at the time was me.
So, he basically asked me to help him out. It was like, "How do you accept payments?" and all that stuff and we vibed a lot on the philosophy part of things. He was, "Katie, you should just open your own company. You already know what you're talking about; you're totally aligned with the philosophy". He was working with the Russian-speaking community, while I right away started working with the English-speaking community.
Peter McCormack: I get a lot of people approach to come on the podcast, get a lot of emails and most of the time I know they want to come on not to really talk about Bitcoin, but to promote their company; it's an opportunity to get in front of tens of thousands of people. I'm aware of that and it's not something I usually buy into; I'm not really usually interested in that. But with you, it's completely the opposite because I know what bitcoiners are like.
It was me who approached you and said, "You've got to come on this show". I know what bitcoiners are like, I know this will be an interesting topic. I know in doing this, you're going to get a whole bunch of people get in touch with you and be interested in it. We've already spoken about this myself and we're going to role-play that. I would use your service absolutely; I think what you're doing is important and brilliant.
So, we're going to flip this one; I'm more than happy to promote it. Just to be clear, if anyone's thinking Katie is paying me, she's my friend. How long have I known you; two or three years?
Katie The Russian: Three years probably.
Peter McCormack: Three years, yeah.
Katie The Russian: Ever since the Craig Wright trial, probably.
Peter McCormack: Shit, yeah. Well, you are my friend so I'm more than happy to help you, but it's called Plan B Passport. It's planbpassport.com, right?
Katie The Russian: Correct. Thank you, I appreciate it.
Peter McCormack: No, I love what you're doing and I know this is a massive added value to bitcoiners. You are a star bitcoiner, you're always helping other people. Every time I reach out to you I'm, "Katie, I'm thinking of getting a new passport", you're always there helping me, etc, so I'm more than happy to help you back.
Let's start with you explaining exactly what the company does.
Katie The Russian: Yeah. It starts with a Zoom call basically or a Telegram call where I don't ask people for their names or any private information, because I do want to promote this idea and I think all bitcoiners need to get acquainted with that. Basically, what we're going through is trying to understand your values, your goals, your needs in life, your family situation and strategize together on what should be or could be your exit plan or your opting-out strategy, or Plan B.
In this case, we talk about all your current situations and we try to understand which jurisdiction suits you the best and what are your deadlines, what's the timeline, when you need to start the process, how are you in terms of having all the documents in place, do you need to start requesting the documents you've lost a while ago.
If we're getting aligned in all that and you're ready to start the process, I first do my internal due diligence basically to protect myself, make sure that you're not an international search. After that, we enter the agreement and start putting together the paperwork. That process takes about 30 to 45 days, depending on how quickly you put the paperwork on your side. On our side, we fill out all the government forms, sending them to you to sign and then 45 days in, we actually submit the application to the island.
It takes 90 to 120 days for the island to do the due diligence and then after that, you put the donation down, which is four months in basically. For people who are trying to time the market, that's an important point. You don't actually put the donation down until you are already pre-approved by citizenship by investment unit, so four or five months in. A few weeks after that, you receive passport in the mail.
Peter McCormack: Which islands are we talking about here?
Katie The Russian: So, five Caribbean islands: St Kitts and Nevis, Antigua and Barbuda, Dominica, Grenada, St Lucia. I also work with Vanuatu, an island next to Australia, and I work with Portugal Golden Visas. It's not a passport program, but there's been a lot of interest towards Portugal from my audience, so I work with that program as well.
Peter McCormack: These are countries you have direct relationships with that people can get a second passport?
Katie The Russian: Yeah.
Peter McCormack: What does it actually mean for the person? I'm going to start role-playing some of this through. I got very frustrated at one point in the last year where I could not travel, I was not allowed to travel. There were flights, but I was not allowed to leave as a British citizen unless I had a passport for another country. I can get an Irish passport, but I've just never bothered getting it because there hasn't been a huge amount of benefit. But say I had -- which is your favourite of this islands, which would you recommend?
Katie The Russian: Let's say you would get an Antigua passport.
Peter McCormack: Okay, so say I wanted an Antigua passport, they would have to let me out of the UK, right?
Katie The Russian: Yeah, they can't keep foreign citizens in the country and you would basically play your Antigua passport in this game and be, "Hey, you've got to let me out".
Peter McCormack: Okay. So, of those countries, by getting a passport I'd become a citizen of that country?
Katie The Russian: Exactly, yeah.
Peter McCormack: And you can have multiple citizenships? I can be a British citizen and an Antiguan citizen?
Katie The Russian: Yeah, there are a few countries in the world that prohibit dual citizenship, but none of those that you've mentioned are part of it, so you will be just fine.
Peter McCormack: Because we have listeners globally, which countries do you know definitely don't allow it?
Katie The Russian: Netherlands have an issue with that, the one that came to mind right now. But it's not a common thing, so not many countries.
Peter McCormack: Okay, so the second I receive that passport, I can just travel to that country and I'm the same as any Antiguan resident? I can't vote, right, or does it come with voting rights?
Katie The Russian: You literally have all the same rights as an Antiguan-born citizen at this point, full naturalisation.
Peter McCormack: Wow. What about my children?
Katie The Russian: You can apply with your children to begin with. If you already have the passport and you have newborn children, that will be a little more complicated. For example, with St Kitts, it would be a $10,000 fee to add a newborn kid into the citizenship as well. But let's say you apply for an Antigua passport now, you would include all your kids as dependents; they wouldn't have to pay any extra donation, it would just be part of your application.
Peter McCormack: Okay, so let's talk through these different countries. With any of those that you mentioned, you're guaranteed beautiful weather, beaches, maybe a couple of storms, good food; you're going to live in a paradise, I get all that. Can you talk me through for each of them what are the differences? Is it different costs per place; are there benefits to ones over others?
Katie The Russian: Yeah, so one of the biggest differences right now is St Kitts and Antigua do not tax residents. Basically, there is zero global income tax, zero inheritance tax, zero capital gains tax, no matter if you're a resident or a non-resident of the country. With St Lucia, Dominica and Grenada, if you're becoming an actual resident of the country, there will be some taxation applied on you.
That's one of the biggest differences right now in my opinion, but also a lot of people strategize based on the cost, of course. So, for a single applicant, St Lucia is the cheapest option; it's all together, all things applied, $129,600. But for a family of four, for example, St Kitts now has a really good promotion going on. A family of four can apply for the same price as a single applicant, so it would be $180,000 for a family of four. So, depending on your family situation, different costs would apply for sure.
Peter McCormack: Okay, so it would be more beneficial to go to St Kitts, because myself and my kids, we could all get passports and residency for $180,000. If I was to do it on my own, my kids could still visit, but they would have the restriction of a tourist, right; so they could only come for, what, usually 90 days most places?
Katie The Russian: I would honestly include kids as dependents just for the sake of, let's say something happens with the UK and you are the one who can escape but your kids can't; this is not cool, right. You want to protect your family too and you want to make sure that yours can travel to the same countries on this extra passport. So, for example, Antigua passport would give you countries that you don't have on your UK passport. You would be able to go to Russia without a visa; on your UK passport you can't do that.
Peter McCormack: I looked at that recently, because one of the things I was going to do for my back, the thing that kept delaying our interview, is I got recommended a guy who's out in Moscow who's a bit of an expert in fixing backs. But I had to get a visa, which I didn't realise. I think I got so used to travelling without a visa. I've travelled to a lot of the world, I think definitely a quarter, maybe a third of the countries of the world, and I honestly don't remember a time I've ever applied for a visa, because it's so commonplace these days you don't have to. But there we go; with Russia, I actually did have to get one.
Katie The Russian: As a Russian citizen, I needed a visa everywhere I would go and, funny enough, I would always run into issues with that. I think the universe was just telling me about Flag Theory. When I was 11 and 12, I was applying for Spain visa to go to World Cup, and I would get denied even though I applied as a Russian national team member to go and compete there. I would have to run to Moscow, try to apply once again so I would be able to get there on time for my start, for my competition. So, I had a lot of issues with visas as a Russian citizen, so that was clear for me that I needed another passport.
Peter McCormack: Are there any settlement issues once you've got that passport for consideration? Obviously if you go and stay in a hotel you're fine, but really if I was going to go there for tax purposes, I have to be out of the UK I think for -- I think I can only be in the UK for 90 days. Anything more than that based on my current situation, I would have to pay UK tax. If I wanted to reduce my tax burden and benefit from an Antiguan tax rate, zero rate, I know one restriction I have is maximum ,90 days in the UK but, lovely as it sounds, I don't think I would spend the rest of my year in Antigua. If I'm visiting other countries, would there come a situation where I have a tax burden in another country?
Katie The Russian: Not at all.
Peter McCormack: Do you know how that works?
Katie The Russian: Yeah, all you have to do is maintain your non-tax resident in any of high tax jurisdictions. Let's say you can spend three, five days in Antigua a year just to maintain your tax residency there and then for the rest of the year you're just travelling through US, El Salvador, UK 90 days and anywhere else in the world; you're not going to be paying taxes in any of those places.
In the UK, the process of becoming non-tax resident is pretty straightforward actually; I was really impressed with what you guys have on the website. There are actual numbers of days you can or cannot spend in the UK, who you can work for, how it applies to capital gains which no other countries even mention capital gains for non-tax residents. So, I think that's pretty cool and I think it's very easy to become a non-tax resident of the UK, even though you want to spend time there.
Peter McCormack: It's an interesting dilemma to work through because at some point you can actually do the maths and say the $180,000 cost, say, did you say Antigua was $180,000 or was that St Kitts?
Katie The Russian: St Kitts for a family of four would be $180,000.
Peter McCormack: Antigua sounds a little bit more like my thing. What's the cost for Antigua?
Katie The Russian: Somewhere around the same, $168,000 maybe.
Peter McCormack: You start to run the math of if you're a business owner, if you operate a business, and I'm not hiding anything people don't already know, I share my income reports up on my website, I certainly would pay more than that in taxation over the next year. So, then it becomes an absolute tax benefit to base myself there. There's going to be some people listening who say, "Well, you should be paying your tax because that's the country you've grown up and benefited from", but we can have that debate another time. It certainly becomes more interesting.
I think the UK also has a thing whereby, if I return within five years and I'm due any of my capital gain taxes, I have to be away for five years, anything I release within five years. I think they've done that so you don't go off for a year, sell everything and then come back in a year. I think there's a five-year limit on that. Then the rest of the things they do is based on how many dependencies you have here, so if you have children or you own properties or businesses, the more of those you have the less time you can spend here. But I can easily see myself get into a situation where I'm only here for 90 days.
Let's work through my scenario, Katie. I travel a lot with work, as you know, spend a lot of time in the US, I pay a lot of tax and I want to spend less time in the UK. I don't like what's become of this country; I'm not an entirely proud British person. I'm proud of what my government's done certainly, I like some of our cultural sense of humour, but I don't feel a desire, a need to stay the whole time. I spend a lot of time in the US, I spend a lot of time travelling through South America. I don't like being trapped here; I want to be able to get into the US as often as I want.
Should I be looking at having just one extra passport or should I be considering more than one? Is there a risk in this Flag Theory of only having the Antigua and the UK?
Katie The Russian: I think one extra passport would be enough for you, just because we have a third flag for all of us which is cyberspace, which is where we hold most of our assets and they're very protected there. This is the ultimate asset protection mechanism that we've got, so that one is covered basically. Now you have another one for your good tax regime, for an opportunity to exit UK in case of lockdowns; so, I think that would be enough. But then you would need to strategize on, "Okay, how do I not become a tax resident of elsewhere? How do I not spend more than 180 days in the US or in any other country that would tax me my income, my global income and my capital gains?"
Peter McCormack: Really, you should not be spending -- you should keep moving really.
Katie The Russian: It's not necessarily about moving; it's also about how you live in those countries. Let's say you're staying in an Airbnb for 90 days in the same city, in the same country; it's clearly not your primary residence. You're not trying to live there long term; it's just you're staying in an Airbnb and that would be considered as a tourist. So, I wouldn't have a problem with that and neither would IRS or any other tax authorities.
They look into the whole situation, the whole picture and see do you work there; are you here for work necessarily; or are you just working remotely and you're a tourist; where is your company set up? So, for example, you live in UK and trying to take a tax advantage of the tax regime of Antigua would mean that you need to move your company as well, if it's UK-registered right now, because as a non-resident of UK, you would still pay a UK income tax; it would only apply for non-UK or global income tax that you wouldn't pay. So, moving your company to a different jurisdiction would be part of the game as well.
Peter McCormack: Right, so not only am I considering getting the passport, I want to register my company as an Antiguan entity?
Katie The Russian: Or elsewhere. That would be another part of the strategy; you would look into corporate tax on different islands or different jurisdictions and would see what would suit you better there.
Peter McCormack: Okay, so for personal taxation reasons, there's a very good reason to get a passport in Antigua or St Kitts; but in terms of companies, what have you observed with regards to where a company should be registered?
Katie The Russian: We would definitely need to look at the income of your company, how it's all structured there. Is this income just counted as your salary, later on are all the profits just going to become your salary? Again, it's an income of you as a person, so the company doesn't really make this money. But for corporate taxation, I cannot come out with this strategy from the top of my head; we would need to look into who would offer the best corporate taxes for you.
Peter McCormack: If I paid all profits out to myself as income, then that would make sense to go to somewhere like Antigua.
Katie The Russian: Yeah.
Peter McCormack: I'm literally figuring this out while we're on the phone, whilst we're recording this. Do you know what I was considering? I'll tell you what my original plan was that I was thinking about this year is that I need to spend a certain amount of time in the UK, because I've got friends and family here and I want to visit them; but the majority of my work is in the US. I would love to have a studio there to go and record interviews in somewhere like Austin.
Also, I'm very interested in everything that's happening in El Salvador; I really like the country. They've opened themselves up to residency for 3 Bitcoin, so at the moment it's around $90,000 and they're keeping it fixed at 3 Bitcoin rather than changing it based on the dollar value. Let's talk about El Salvador as well in a second, but that's what was in my head. So, I was thinking I should base myself in El Salvador, I can fly quite easily between El Salvador and Texas to go and record my interviews, and then I can quite easily get back to the UK and visit, but I would set El Salvador as my base.
Let me ask you about El Salvador, because they're new on the map with this idea of a residency. Have you looked much into what they're doing with this?
Katie The Russian: I spent 30 minutes on a call with their immigration services just last week.
Peter McCormack: That's fantastic.
Katie The Russian: Thank God I learned some Spanish!
Peter McCormack: What did you find out about theirs and how does it compare?
Katie The Russian: They do not currently have citizenship by investment program, which I think they need to come up with. I want to write a big email and send it to them how they should establish that, because I think it will be huge value proposition as a lot of bitcoiners want to go there but they want to be a citizen of this country and basically exit their current tax regime. As Bitcoin becomes a legal tender, there cannot be any capital gains on money, so that will be a really good option.
But right now its residency, I think it's not bad at all and there's some real estate options as well. I'm currently gathering information just so I could deliver it to bitcoiners in a well-packaged way so they could actually understand what's going on and consider it for themselves. But I think citizenship by investment is something they need to look into, the El Salvadoran government, and just proceed with that. That would be the next step, reasonable step for them to invite more bitcoiners in.
Peter McCormack: I thought that's something they said they were doing though; it was by investment. If you invest 3 Bitcoin, then you will get citizenship.
Katie The Russian: Residency; and then five years later, you can go through naturalisation and become a citizen, so it's not a passport.
Peter McCormack: You probably need to explain the different -- yeah, I see, so you can live there. It's essentially like a visa; you can live there.
Katie The Russian: Permanent residency, yes. It's like a visa for people who actually can stay and work there and do whatever they want. They will not be able to vote and a few more restrictions. It's not too far from passport, but it's not a travel document, so basically this document will only allow you to have rights on the territory of El Salvador, but you cannot use it to go to any other country or do things like that.
Peter McCormack: That situation where I was trapped in the UK would not solve that problem?
Katie The Russian: I'm afraid not.
Peter McCormack: That's really interesting. Is there anything else I would have to be considering, because obviously we've talked about the fact that I'd get a passport and the passport would allow me to get into other countries without a visa, it would allow me to leave the UK as and when I might need to, perhaps me and my children. It's essentially a cover for me to move my business and we would have to discuss locations where best to register that.
What about other things, other assets? What consideration should I have for assets? Do you advise people to not have assets in other countries? Would I be best to sell my UK house and just rent while I'm here? Are there things like that you consider and advise on?
Katie The Russian: One of the other ways to obtain citizenship in all those countries that I mentioned would be a real estate investment, so you're not necessarily having to do a $100,000 or $150,000 donation into sustainable growth fund of the country; you could always purchase real estate. Now, most of my clients go with donation program; first of all, the opportunity costs, because their cheque on their real estate would be much higher, 2X or 3X of the donation amount.
Another reason is because most of the countries tell you the least of properties that you can buy. Basically, those properties that are accepted for citizenship by investment, approved for citizenship by investment program, and obviously there are misincentives here. What properties would they approve for citizenship by investment program? Either those properties that need investment and without your investment they won't be completed; or those properties that are good to go but then once they're approved, they're skyrocketing in price, they're going 30%, 40% on top of the market value. So, that's the reason most of my clients go with donation.
Obviously, there are a lot of exceptions that I work with, with commercial real estate, for example Hyatt Hotel in St Kitts, a really popular real estate and a lot of my clients just go with that. They buy shares of Hyatt Hotel and obtain citizenship by investment through that and then five years later, they just sell it for the same price to a different client who is also trying to obtain citizenship by investment through buying shares. For people who are looking for some diversity in their portfolio and, "Oh yeah, I'm all in Bitcoin, I'm ready to spread it out and buy some properties" real estate investment is the option.
Now, you ask me what other things you should consider. I always recommend to get driver licences from the country that you're getting a passport from, open a bank account from this country. Basically, some of the centralised exchanges, let's say, or any other things you might need to work with, ask you for two proof of identities; and now let's say you're showing them your Antigua passport and then you have no second ID and you have to show them your UK and they're, "No, we don't really work with UK" or, "We will report to UK IRS right away".
So, I always recommend to get those two as well and again, this is the Flag Theory game, the jurisdictional arbitrage. Let's say you go to UK and you're getting pulled over in the UK. You show them your Antigua driver licence, which is totally valid driver licence, and there's a really big chance that they're just going to let you go because they have no idea what to do with this driver licence. That's what my dad does in Russia; he shows them Florida driver licence and says, "Don't speak Russian. American citizen" and they let him go. That's about it. That's about as much as he can say! But you know, jurisdictional arbitrage game.
Peter McCormack: It seems in some ways too good to be true, but I guess this is only something that's available to people of a certain income level. This is why it's probably attractive to a lot of bitcoiners, because there are a number of bitcoiners out there who have seen their wealth grow to anything from a comfortable to a very substantial level and they want a couple of things. Yes, they might want to avoid tax and, as I said, some people might want to argue that; but they also want privacy, they also want to get away from the quite substantial over-reach of the government that we seem to be seeing in large countries. Do you tend to find that you tend to get more privacy by having more passports?
Katie The Russian: Definitely, definitely. Again, because you have multiple options. Let's say you need to register somewhere and now you have options like, do you think they're going to report it to your country as a US citizen or do you think they're going to report it to your country as an Antigua resident and citizen? Now you have two passports and, based on your strategy, you're either going with one or another, opening bank accounts, getting a PO Box for mailing stuff. You have two passports and that definitely adds an additional layer of your strategy and what you can play in the moment to get the most privacy or to get confidentiality of some information.
For example, as a US citizen, no matter where you open a bank account, it will always be reported to FATCA. As an Antigua citizen, it's not the case. Another thing is Five Eyes countries, are you familiar with this term?
Peter McCormack: No.
Katie The Russian: Five Eyes countries would be Australia, New Zealand, UK, Canada, US and all those five countries share all the information on each other's citizens; that's the agreement that they have. As an Antigua citizen, they wouldn't share it with any of those countries; isn't that beautiful?
Peter McCormack: Sorry, I know we've spoken about this before, but we spoke about it because I was thinking of getting US residency which I felt would be advantageous for a number of reasons for work, but there are tax advantages to having an Antiguan passport over that. Obviously, you don't have to reveal all of everything you've done for yourself, but I'm literally thinking about this; I should just apply for this.
I know you talked about this at the start, but let's go through it again. If I say, which I think I'm going to actually literally say, "Okay Katie, I want an Antiguan passport. I want Antiguan citizenship for me, myself and my two children", just talk me through it again. What's the process we're going to go through?
Katie The Russian: The first step, I would definitely send you all the pricing for all five islands so we could look into the comparison for all that. I would send a checklist of all the documents that you would need to prepare for yourself and your kids; things like birth certificates, diplomas, letters from school, letter from bank, proof of funds, source of funds. Basically, they do a lot of AML work, so they would look into all that stuff as well, your police records and things like that.
Then on our side we would prepare all the government forms, fill it all out for you. You would need to notarise and apostillise all the documents that we will ask you for. It's mostly going to be on you; your kids need very few documents, like medical reports, letter from school, birth certificates. We would need to get approval from mother of kids, so she'll understand to get the passport from another country.
Peter McCormack: Oh, okay.
Katie The Russian: Then you just send us all the documents. We put the paperwork together and send it to the island and submit the application. Antigua takes about 90 days now, so you pay due diligence fees on the day of application, which is about $20,000, and then we just wait for 90 to 120 days. After that, they send a letter of pre-approval and give you a bank account where to submit the donation. You submit the donation and two or three weeks later you get the passport.
Now, with Antigua there is actually an interesting requirement; they would ask you to come visit the island in the next five years for five days. That's not that big of a deal but that's the only island that has this requirement.
Peter McCormack: I'd go next week!
Katie The Russian: Yeah, that's amazing there, seriously. Direct flights also from UK, from London to Antigua.
Peter McCormack: I know. That's what I was thinking. Have they got also direct flights to Miami?
Katie The Russian: Yeah, every island basically and St Lucia, direct flights to Houston, I believe also.
Peter McCormack: And the UK, I know St Lucia does. So, start to finish, what's that; six months, seven months?
Katie The Russian: Yeah, that's usually my estimate; it's five to seven months.
Peter McCormack: July, so August, September, October, November, December, January, February next year. By February/March next year, I could be an Antiguan citizen. Sounds pretty cool.
Katie The Russian: Oh yeah.
Peter McCormack: You know what's really interesting as well for the timing for another reason, but I'll tell you about that offline. I'm sorry to anyone listening who's thinking, "What the hell are you doing, Pete?" But it is something that's completely on my radar; I spend so much time abroad and away, travelling with work. When I'm primarily travelling, I'm usually spending what? I think in 2019 I spent half my year away, so basically I spent 180 days in the UK because of the amount of time I see my children. But if that became 90 days, let's say over the holidays the kids can come out to Antigua, which isn't such a bad thing for them.
Katie The Russian: Not at all, it's really beautiful there. I absolutely love Antigua. 360 beaches on the island; I would have to spend a day on a beach for a full year to go over everything. A lot of beautiful sailing. It's amazing, it's a really cool place.
Peter McCormack: What's real estate look like there?
Katie The Russian: It's actually pretty developed, honestly. There are a lot of beautiful villas, apartments, all kinds of price ranges obviously. I would say it's definitely cheaper than the US in terms of real estate.
Peter McCormack: What about healthcare on these islands?
Katie The Russian: Private healthcare is not bad at all but again, depending on what exactly you're looking for. I'm not super familiar with what exactly they're good at and bad at.
Peter McCormack: I guess that would be a consideration. I don't have particularly bad health, apart from my back which is now fixed, but it's one of those considerations because if you do end up spending a lot of time there, I would have to consider. It's one of those things, I don't know if it's a place where I'd want to -- a bit like Raoul Pal over in the Caymans has a place. Whether I'd want to have a place and actually base myself there a lot of the time, or it's just that I want the passport, it's somewhere I'd be a week here, a week there and travel around the rest of the time; I guess that something I'd have to have a think about.
I think what I'm trying to get to, Katie, is there's a difference between having a passport and then also treating it like a primary residence as well. I guess some people just want the passport, but other people actually want to go and live there.
Katie The Russian: Most of the people just want the passport and don't actually go to even visit the island. Some of them just visit out of curiosity; but again, that depends on do you want to place yourself as a resident of the country and actually go there, establish the residency, get your bank account set up, get your driver licence, your mailing address set up and then place yourself there while also travelling around? I think for you that would be a very reasonable step and I think it would be pretty convenient too; again, direct flights to UK and US. I bet you could fly to El Salvador through Panama from the island as well.
Peter McCormack: Yeah, you can do. This is getting really interesting. This is getting super interesting. Is there anything in terms of these islands, has there been any rejection by locals that people are doing this, the people who are getting passports to the country, that they can pay for them?
Katie The Russian: Not at all and that's what I always say; people say it's dangerous, there is crime there and all that stuff. Again, follow the money, follow the incentives. They like you to come to the island, bring your money and spend your money there. They're waiting for you, you're their income. Now, as their tourism has been shut down for quite a while, they basically survive on selling passports; that's where their income comes from as a nation.
So, they're pretty welcoming towards that and I spent quite some time on the island and I'm a super white, blonde girl and I was very welcome everywhere. I asked a lot of questions about everything, about local crime, local shootings or anything like that, about their opinions on marijuana and all that stuff. It was just interesting to talk to local taxi drivers all the time and they were pretty cool; I never had any issues.
Peter McCormack: It's a real opportunity to live out the sovereign individual thesis. A lot of what Robert Breedlove talks about, that I've spoken to him about, you can truly become a sovereign individual and a digital nomad of sorts. I'm not going to do this, but I guess if my business was entirely Bitcoin-based, I could just become a digital nomad, I could take my payments in Bitcoin and would I even need to register a company somewhere; would I even need to have a company?
Katie The Russian: You would need to not talk about it if you didn't.
Peter McCormack: I wouldn't do it anyway, but I'm just wondering if you're a digital nomad, do you have to have a company somewhere? Where's the jurisdiction where you have to have a company, because it seems like that would be a grey area.
Katie The Russian: It's basically impossible. Yeah, if you're a digital nomad, you don't understand how it works for you, how the laws apply on you. Interestingly enough, they don't understand how the laws apply on you. Again, as a Russian tourist in the US, I was able to get all my bank accounts without social security number, which is impossible for a US citizen; they would never open a bank account for them without social security number. So now, you're travelling the world, you as a non-resident or non-citizen of a country you can do a lot of things that a citizen cannot. Then they just clearly do not understand how to apply all their internal laws on you, because you're just a tourist travelling here for a couple of weeks.
Again, as the world becomes borderless for us remote workers and people with borderless money, we don't see the borders anymore and because of that, the borders will start to fall and, again sovereign individual, the life and death of nation state. That's what they talk about there a lot because borderless money, borderless jobs, what's the point? The gatekeepers are no longer there, they cannot grab control as we cross borders with our wealth. They cannot grab control when we work with foreign individuals. That's beautiful and I'm all for it.
Peter McCormack: The fuck you money and fuck you passports!
Katie The Russian: Hell, yeah.
Peter McCormack: But the great thing about this is that one of the really sad and depressing things that I've come to realise as I've gone further down the Bitcoin rabbit hole is the over-reach of government. I'm not an anarchist, people know that, and I'm not a libertarian; I like a lot of what libertarians stand for, I think I agree with a lot of their ideas. I know people are going to respond negatively to this, but I still look at somewhere like the UK and how do you co-ordinate 65 million people, run borders, etc, without some form of centralisation and governance. At the same time, I think our government is truly terrible and poor at their job, but this starts to create the competition where the government becomes a service provider.
It's early now, it's probably not seen as too much of a threat, but as more and more people start to realise that actually governments are a service provider, I'm going to go to the government or the jurisdiction that gives me the best service and I'm going to arbitrage that, then it maybe will force governments like the UK government to reconsider how they operate. The UK itself has a great opportunity right now, having left the EU, to service bitcoiners. It's not going to, but it does have that opportunity; but that government as a service provider is really interesting.
Katie The Russian: Absolutely. I positioned Plan B Passport as a company that's helping to accelerate the evolvement of free market between the nation states. This is the philosophy I believe that stands behind my company and I'm trying to spread it throughout all the employees so they would understand why we do that; they're not just helping people to get the passport, they're evolving the competition of free market here.
I do believe it's going to backfire on those governments not trying to compete, who just think they're way too powerful to lose here, as what they mostly think. But that's not the case. We've seen it happening, again sovereign individual describes the fall of German Wall and that's really interesting and that's going to be happening, it will have to happen with them and they have no play in that because they thought they were too powerful.
Peter McCormack: There's so much to think about. Okay, your business, you must be getting pretty busy?
Katie The Russian: Oh yeah, it's been a very interesting couple of months. It all started with COVID when I started seeing a huge spike, because people realised, "Okay, I do not have the power and freedom that I thought that I had, so I need to look into another passport just to get out of my country in case shit hits the fan like that again". Then, we had a US election, which half the country was unhappy with the results, so they all were, "Yeah, I'm rage quitting that, I'm no part of it". Then Canada is going full socialist, so Canadians start getting out of Canada. Australia's been locked down for, what, 18 months; they can't leave the country without special permission. This is crazy.
Now Bitcoin started skyrocketing since December and bitcoiners are jumping on that train too. I've been definitely busy, loving it, loving spreading the word of fuck you passports; it's exciting.
Peter McCormack: Fuck you passports, I love it. I think we should call this show when we release it, Fuck You Passports. Katie, I want to become a customer of Plan B Passports. How much does it cost? I'm not saying how much does it cost me expecting some special price, I will pay full price; but what does it cost to work with you guys?
Katie The Russian: My service is $20,000 and the price that I mentioned included my costs as well, my price as well. So, $180,000 would be $150,000 donation and then due diligence fees, passport fees, government forms fees, $20,000 of my fees and I will send you a full price on every island so you would see a complete breakdown and compare.
Peter McCormack: I guess it's one of those things I could do myself but it's so not worth it, because you take it all on. It's a bit like trying to sell your house on your own; it's an absolute pain, you might as well go with the expert. It's funny, this probably sounds all really staged, but we should be very clear that last time we spoke about this, it was very different. I was thinking very different things.
Okay, you need to sign me up, you literally need to treat me as a customer and send me all the details after the show, because I absolutely want my second passport, as I said for multiple reasons. I don't need it now, but I can see from about May next year, this becomes really beneficial to me and getting that work in place to do it now seems to be good. Can you pay in Bitcoin?
Katie The Russian: You can pay in Bitcoin for due diligence fees and my fees, but the donation itself has to go from your bank account to their bank account.
Peter McCormack: Yeah, of course.
Katie The Russian: Antigua actually is a country that is kind of trying to move forward with accepting donation in Bitcoin and I know they did a lot of internal work on that, but they didn't pull the trigger to actually start accepting that. So, I'm keeping my eye on that and I'm constantly talking with other government authorities in order to start making that happen. Obviously, it's just hard for them to get their head around that in terms of okay, how do we do AML?
You try to explain to them that AML, actually it's possible to implement a Bitcoin Network and all that stuff, and you're still asking for source of funds and proof of funds. It's just a whole new world for them and it takes a hardcore bitcoiner who understands the technology behind it and the philosophy behind it to actually be, "Okay, we can do that, we can make it happen". But the governments are not efficient, so it takes them forever to realise that and to move forward with a new program.
Peter McCormack: But it really makes sense for these countries to become Bitcoin countries like El Salvador is becoming.
Katie The Russian: It really does.
Peter McCormack: Because also, I could really see myself hopping between these Bitcoin-based countries.
Katie The Russian: For sure, for sure.
Peter McCormack: I guess that's another part of the arbitrage in that you're taking advantage of the second passport, you're taking advantage of the fact that you can move your business tax-free, but also one of the reasons I like going down to El Zonte in El Salvador is, it is a Bitcoin town, the whole town understands Bitcoin. You know you can use your Bitcoin there; you know there's an ATM; you know that people accept Bitcoin; you know everyone understands it; it just makes sense.
If you had that in Antigua, but none of the other islands, that's an instant win. I'm just going to pick Antigua because they get Bitcoin.
Katie The Russian: I just think right now if Roger Ver tried to make St Kitts and Antigua Bitcoin islands and then obviously, Bitcoin Cash islands. There are a lot of Bitcoin and Bitcoin Cash ATMs there and they're definitely more familiar with Bitcoin than any other countries that I've been to, maybe other than the US. So, they did get exposed to that, but there's no infrastructure in place just yet. But I think the more bitcoiners get passports there and actually moving there and establishing residency or half-residency there, it's going to become a thing. They provide us with what we need in terms of no lockdowns right now, for example. St Kitts actually went crazy again with the lockdown right now, but Antigua, St Lucia, accepting all tourists, fully booked; everything is great there.
They give us freedom; they give us good tax regime and we will bring the infrastructure; that's what bitcoiners do. That's what happened with Strike. El Salvador was welcoming to Strike and now the whole country's going to benefit from the infrastructure that Jack is bringing down there. We're going to bring value too and I think they should recognise that too.
Peter McCormack: Right, okay. Well, listen, there's some actions post this. This is almost like we've recorded the first step. There are some actions post this, we'll discuss that at the end, but is there anything I've not asked you about or we've not considered as part of this?
Katie The Russian: I think we're good, we've covered a lot of things that bitcoiners usually ask questions on. Obviously, I always talk to you, talk about citizenship-based taxation which is a United States thing, which is absolutely terrible, I think.
Peter McCormack: Yeah, that's a global thing. My understanding of this, tell me if I've got this wrong, because I've only learned about this thing; if I leave the UK and I go and live in another country and I get non-dom status, I don't have to pay tax in the UK anymore unless I break my non-dom status. But if you're a US citizen and you go and live in another country, you still have to pay taxes in the US; but my understanding is you have to pay the difference between the taxes of the two countries, you don't pay double tax.
Katie The Russian: Well, it depends. Mostly yes, you can exempt $110,000 a year of your income to the United States and then you do pay extra. If, let's say, you're living in a good tax regime country and you're paying 20% less than what you would pay in the US, you would still have to go pay that. But now the ugliest thing about all that is you can still opt out by renouncing your US citizenship, which is a huge deal. You are basically saying no to your home birth country and being, "I'm out of here". But even there, they've got a really big gatekeeper in place. If your net worth is higher than £2 million, you will have to pay exit tax on all your assets, which is 40%.
Peter McCormack: What?!
Katie The Russian: Including your house, including all your assets that you have no matter in which country and things like your pension; everything basically. They count all your assets in dollar value and just grab 40% of it. So, basically you cannot opt out of the US if you're rich.
Peter McCormack: Well you can, but it's damned expensive.
Katie The Russian: Yeah.
Peter McCormack: Jesus. Look, 55% of my listeners are US-based and they're going to be listening to that and some of them are going to be -- I imagine a decent amount that maybe will be within the whatever, lower band, that $2 million mark who might be thinking, "Hold on a second, if we go through another 10X here, I could be there with $20 million in Bitcoin. That's a real risk to me, especially with horrible, vile companies like Chainalysis providing the government with data on what assets people own".
So, there's a real incentive for some people to start thinking about that right now. That is a big issue, letting your residency go. I wouldn't give a fuck for the UK; I'd absolutely drop mine. I wouldn't accept those tax conditions, I would just, yeah, goodbye residency; but that's me, I don't really care anymore. But that is a big issue for people to think about.
I think, Katie, people are going to have questions naturally, questions that I've not asked they're going to want to ask you, they're going to want to reach out. I know you're going to be happy to hear from people. How should people get in touch?
Katie The Russian: katie@planbpassport.com. So, @KatieTheRussian on Twitter, my DMs are always open. You don't have to have a profile pic or a name in your profile to ask any questions, so anonymous questions are super welcome. And on my website, you can schedule a 30-minute free consultancy, again no names needed; just come in and ask your questions.
Peter McCormack: Hold on, I just got a 50-minute consultancy, nearly an hour. Are we okay? Are we going to let that one slide?
Katie The Russian: Yeah, any time. Happy to help.
Peter McCormack: Well listen, look, I want to be a customer, so once this call's finished send me all the details and let's get on with it. Jesus, this is weird; let's do this, Katie.
Katie The Russian: That's good. I appreciate it.
Peter McCormack: No worries. Good to see you. You know I love you and hopefully I'll get to see you again in person soon and maybe it will be in Antigua of all places. Listen, I'm going to share it all out in the show notes, I'm going to hand this out there. I will tell everyone how it goes and yeah, good luck. I love what you're doing and I love your work, Katie.
Katie The Russian: Thank you.
