Creating your own asset—typically a business you own and control—is the core of Robert Kiyosaki’s definition of a capitalist. In a global context, this means locating that asset where taxes, regulations, and personal risk are minimized, rather than relying on traditional investments such as stocks, bonds, or crypto.
Owning a business versus owning passive assets
- A business is an asset you can directly control; you built it from the ground up and can replicate the process if you have the skills.
- Passive assets (stocks, funds, crypto) are subject to market volatility and often lie in jurisdictions that impose high taxes and strict regulations.
Risks of keeping assets in high‑tax, legacy jurisdictions
- Heavy taxation: governments may tax earnings, dividends, and capital gains at rates that erode profitability.
- Regulatory burdens: compliance costs, licensing delays, and bureaucratic hurdles can stifle growth.
- Legal exposure: personal assets are vulnerable to lawsuits, divorce settlements, and other claims when not shielded by proper structures.
Benefits of moving the asset abroad
- Lower tax rates: many emerging or offshore jurisdictions offer corporate tax incentives or territorial tax systems that tax only locally sourced income.
- Reduced regulation: streamlined business‑registration processes and fewer reporting requirements lower operating costs.
- Enhanced asset protection: offshore entities can provide legal barriers that make it harder for creditors or litigants to reach personal wealth.
- Flexibility in profit extraction: owners can repatriate earnings with reduced withholding taxes or through dividend‑friendly structures.
Jurisdictions actively courting entrepreneurs
- Georgia (Caucasus) – Under former President Mikhail Sakashvili, the country rose from the 127th to the 8th easiest place to do business, simplifying bar‑opening and other ventures to a matter of days.
- Uruguay and Chile – Recent tax reforms have lowered corporate rates and introduced incentives for foreign investors.
- Colombia, Cambodia, Armenia, Turkey – Emerging markets with growing consumer bases and relatively low entry costs for small‑scale enterprises (e.g., ice‑cream shops, niche retail).
- Other offshore hubs – Nations that market “meaningful” incentives, such as residency programs tied to investment, to attract high‑net‑worth individuals.
Practical considerations for entrepreneurs
- Assess the total cost of ownership: compare corporate tax rates, filing fees, and compliance expenses across potential jurisdictions.
- Structure for protection: use holding companies, trusts, or foundations to separate personal wealth from business risk.
- Plan profit repatriation: design dividend or management‑fee mechanisms that minimize withholding taxes when moving money back to your home country.
- Diversify markets: operating in multiple jurisdictions spreads political and economic risk; a setback in one market (e.g., a fad that fades) can be offset by stable revenue elsewhere.
- Leverage local talent and lower labor costs: many emerging economies offer cheaper hiring and fewer bureaucratic hurdles for onboarding staff.
Decision criteria
- Tax efficiency: prioritize jurisdictions where the effective tax rate on corporate profit is substantially lower than in your home country.
- Regulatory ease: look for streamlined business‑registration processes (often measured by World Bank “Ease of Doing Business” rankings).
- Legal stability: ensure the jurisdiction has enforceable property rights and a reputable judicial system for dispute resolution.
- Economic outlook: target markets with growing middle classes, rising consumer spending, and limited competition in your niche.
By focusing on creating and relocating controllable assets to jurisdictions that treat entrepreneurs favorably, a capitalist can reduce tax burdens, limit regulatory friction, and protect wealth—aligning with Kiyosaki’s view that true capitalism is about building and owning the means of production, not merely trading existing financial instruments.
