The world is rapidly changing. Remote work and digital connectivity are empowering individuals to reevaluate their lifestyle choices. At a high level, it permits them to conduct jurisdictional arbitrage. An ability to pick and choose the best places to live facilitated by a remote-oriented lifestyle. But even when taking advantage of this digital age arbitrage, we still need to work through how life’s tradeoffs impact where we choose to live and why.
There is no such thing as a perfect scenario. Utopian idealism is an aspiration that most people don’t have the luxury of pursuing. And most aspiring Sovereign Individuals, the emergent citizens of the digital age, are unable to embrace utopian ideals of self sovereignty. Instead, they have to navigate life’s tradeoffs to maximize the best lifestyle available to live.
What does that mean?
In the context of jurisdictional arbitrage, it means that most people won’t be able to afford building a passport portfolio beyond two or three countries. ie: Accumulating citizenship is expensive and most people can only afford 1 or 2 citizenships beyond their birth place.
Cash poor and time restricted, most average people pursuing jurisdictional arbitrage strategies are forced to navigate the tradeoffs of an imperfect world. That means that you need to decide what the most important elements of government you want to incorporate into your portfolio.
This article explores the tradeoffs a person faces when trying to leverage jurisdictional arbitrage. It focuses on a strategy of building a balanced passport portfolio to maximize an individuals needs in pursuit of self sovereignty.
What is Jurisdictional Arbitrage & Passport Portfolio Theory?
An arbitrage is an exploitation of pricing differences between an asset in one place and another. But an arbitrage can occur between many types of things that are valued differently across locations. Cost of living discrepancies around the world are one example of an arbitrage that a remote worker can exploit.
These types of opportunities become more widely available in the short term as the world becomes more connected. But they disappear quickly as competition for the exploit in price discrepancy grows.
As an example, the cost of living in Ukraine is on average less than the US. That means that a digital worker in Ukraine can accept a lower wage than a worker in the US while experiencing a better quality of life than their local peers.
An arbitrage can also exist from a discrepancy in rules and laws between two places or government jurisdictions. For example, if you rely on crypto investing for your income, you’re more likely to benefit from moving to a location that has no capital gains tax versus living in a higher tax country like America. This difference in policy provides considerable value to certain individuals.
And there are many types of jurisdictional arbitrage.
People value many things about a given location. But what is becoming apparent is that as remote work and digital income streams proliferate, people are reevaluating their lifestyle preferences. And the net result is that more people than ever before are looking for jurisdictional arbitrages to exploit.
But because not all government policies may be beneficial to a digital age lifestyle, Sovereign Individuals increasingly look to create a passport portfolio. ie: Gaining citizenships in multiple countries designed to leverage and balance different types of jurisdictional arbitrage opportunities.
Jurisdictional Arbitrage Costs Time
But before we get ahead of ourselves, this portfolio approach to leveraging differences between countries is expensive. It costs lots of money to buy citizenship. But for most people, the true cost is time spent in pursuit of multiple citizenships.
Herein lies one of the tradeoffs in our imperfect world.
We only have so much time to invest in a country’s naturalization process. Sometimes, these processes can take upwards of 5 years. And even with citizenship by investment, the process itself takes time to implement. 3 to 6 months and sometimes beyond.
The point being, that a passport portfolio isn’t something that just happens overnight. You have to plan and execute far in advance of when you’ll actually want freedom of movement to your destination country.
When properly implemented, it can operate like an insurance policy. Established in advance and used when needed.
The Costs of Investing Incorrectly
Building a passport portfolio requires planning and execution over a long period of time. It requires an understanding of our future lifestyle preferences. But it’s also incredibly difficult to predict whether a country’s policies will remain favorable in the future.
This challenge manifests in the present moment most starkly with COVID-19 policies. For example, some governments are more strict than others with lockdowns, with vaccine mandates and vaccine passports.
The situation is both fluid and dynamic. Meaning a country’s current policies could rapidly change. Forcing you to rationalize how you should deal with this from a portfolio strategy perspective.
A further challenge is that your planning window is closing rapidly because of the nature of government policy towards Covid. Lockdowns, supply chain issues, and nationalistic policies make planning and executing a naturalization process even slower and in some cases outright impossible.
Pragmatic Approach To Jurisdictional Arbitrage
So what do you do with this information?
For the aspiring Sovereign Individual, a person of humble and growing means, you have to take a pragmatic approach to creating your passport portfolio.
Design your jurisdictional arbitrage strategy so that the countries you select address a couple of lifestyle needs and benefits.
That could include favorable policies for freedom of speech, business rule of law, crime, safety, graft, and quality of life. And of course it should also include countries with Covid policies that align with your beliefs.
You should consider border restrictions and other geopolitical considerations. Are you placing all your eggs in one basket with western nations? Should you be seeking citizenship in Western rival nations?
Are you designing your passport to consider both ascending and descending nations? 1st world, 2nd world, and 3rd world exposure?
Are you considering how your choices might change if a magic pill is invented to cure COVID indefinitely?
Think for the long term and not your near term needs. Because the reality is that most of us wont be able to secure more than 2 or 3 passports. So you want your choices to have longevity value.
How to Pick Countries For Your Portfolio?
Right now, you have a choice to make. Do you ignore or incorporate Covid policy into your portfolio strategy?
If you do, the question you might ask is which countries do you think will be safe havens for Sovereign Individuals escaping from nation states entering the Covid Industrial Complex?
The truth is, most “developed” countries will enforce tough Covid policies moving forward. If not now, then when the next bad variant emerges. They will do this in an effort to maintain some semblance of “normal society”.
If you’re worried about taking the vaccine, look for citizenship in a tier 2 or 3 country that has poor access to vaccine supply. The logic: they can’t mandate what they don’t have access to. The tradeoff is likely more lockdowns to control outbreaks.
If you don’t mind the vaccine but don’t love the privacy violations of mandates and vaccine passports – you should consider a tier 3 country with minimum infrastructure to monitor and enforce policy. Taken a step further, you could look for a country with a bribery culture.
But the crux of this article is that you have consider the tradeoffs of your choices. Do you want to live in tier 3 environments just to avoid Covid policy?
The ultimate point is that you should make a list of attributes you want from a country and those that you don’t. Then try to find opportunities that most closely align with your wants and needs.
Choices You Must Make
Many Sovereign Individuals are saddened by what’s happening with Covid policy around the world. But rather than remain trapped in their current situation, they adapt to the times at hand.
Your goal now is to embrace the times we live in and benefit in any way you can. That means investing in companies that benefit from the Covid Industrial Complex, profit from these opportunities, and then buy citizenships in the countries that ultimately emerge as “safe havens”.
You can and should pursue law abiding choices and peaceful coexistence. Because there are no perfect solutions, it’s better to operate within the system, gain influence, and work to change the system to your worldview.
Work towards building the world you want to live in for tomorrow. This materializes in reality as the fact that as humble and aspiring Sovereign Individuals, sometimes we have to choose to live in circumstances that aren’t perfect.
You may very well have to live in a country that has policies you don’t like. Instead of “breaking the law” (which I don’t endorse) I’d tell you to figure out a way to design policy that fits your worldview and sell your community on adopting it.
Photo by Katarzyna Grabowska on Unsplash
