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Glossary: Flag Theory, relocation and tax terms

109 terms you should know for your Plan B. Hover over a term to get the short version.

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109 terms
183-Day Rule
Residency, Immigration & Expatriation
A widely used residency threshold: more than 183 days of presence in a year often makes you tax resident. Not universal, and never the only test.
Ancestral Passport
Citizenship
Citizenship obtained or reclaimed through family lineage rather than investment or ordinary naturalization.
Apostille
Citizenship
Standardized form of international document certification used to confirm the authenticity of public documents for use abroad.
Approval in Principle (AIP)
Citizenship
Preliminary official approval indicating that an application has passed an initial substantive review, subject to final conditions.
Asset Protection
Business, Banking & Asset Protection
Legal and structural planning aimed at protecting assets against creditor risk, liability exposure, political instability, or adverse enforcement scenarios.
Banking Flag
Flag Theory & Sovereignty
Flag Theory term for the jurisdictions in which a person maintains banking relationships and financial infrastructure.
Biometric Passport
Citizenship
Passport incorporating embedded biometric identifiers used for identity verification and border control.
Birthright Citizenship (Jus Soli)
Citizenship
Citizenship acquired automatically or conditionally by birth in a given territory under the laws of the state concerned.
Business Flag
Flag Theory & Sovereignty
Flag Theory term for the jurisdiction through which a person operates a business or corporate structure.
Capital Gains Tax
Tax & Legal
Tax on the profit from selling assets such as shares, crypto or real estate. Rates and exemptions differ sharply by country, and exit taxes can trigger it when you leave.
CBDC (Central Bank Digital Currency)
Business, Banking & Asset Protection
Digital money issued directly by a central bank, programmable and fully traceable. Under Flag Theory 3.0 the reason to become bank-independent before 2030.
Centre of Vital Interests
Residency, Immigration & Expatriation
The tie-breaker test in tax treaties: the country where your personal and economic ties are strongest. Decides your tax residency when 2 countries both claim you.
Citizenship by Descent (CBD)
Citizenship
Citizenship pathway based on ancestry, parentage, or bloodline under the nationality laws of the issuing state.
Citizenship by Exception
Citizenship
Discretionary or special-path citizenship granted outside ordinary naturalization or investment routes, usually for specific public-interest reasons.
Citizenship by Investment (CBI)
Citizenship
Legally established pathway through which a state grants citizenship in exchange for a qualifying economic contribution.
Citizenship by Investment Unit (CIU)
Citizenship
Government authority or administrative body responsible for processing and overseeing applications within a citizenship by investment program.
Citizenship Flag
Flag Theory & Sovereignty
The citizenship flag refers to a person’s nationality and therefore their formal legal membership in a state.
Citizenship Renunciation
Citizenship
Formal legal process by which a person voluntarily gives up a citizenship.
Citizenship Revocation
Citizenship
Involuntary loss of citizenship through state action under conditions defined by domestic law.
Citizenship-Based Taxation (CBT)
Tax & Legal
Tax system under which a state taxes certain persons based on citizenship rather than only residence or source.
Compliance Residency
Residency, Immigration & Expatriation
A residency obtained to satisfy banks, brokers and authorities with a registered address and tax number, without that country having to be your life centre.
Corporate Income Tax
Tax & Legal
Tax on company profits, charged where the company is resident or has a permanent establishment. From 0 % in some jurisdictions to over 30 % in Germany.
Cosmopolitan NodeGBM
Flag Theory & Sovereignty
Strategically selected city or hub that serves as an operational base within a broader international structure.
CRS (Common Reporting Standard)
Business, Banking & Asset Protection
International reporting standard developed by the OECD for the automatic exchange of financial account information.
Crypto Citizenship
Citizenship
Conceptual or emerging framework linking citizenship, legal identity, and digital-native forms of membership or affiliation.
Cyber Sovereign / Cyber SovereigntyGBM
Flag Theory & Sovereignty
Coined by Sergio von Facchin: someone who earns a passive, location-independent income in Web 3.0 and lives as bank-independent as possible. 3 stages, no emigration needed.
Decentralization of Wealth
Business, Banking & Asset Protection
Strategic distribution of assets, control, and custody across multiple jurisdictions, systems, currencies, and asset classes.
DeFi (Decentralized Finance)
Business, Banking & Asset Protection
Blockchain-based financial infrastructure enabling lending, trading, custody, and related functions without traditional centralized intermediaries.
Denaturalization
Citizenship
Formal legal reversal or cancellation of citizenship that had previously been acquired through naturalization.
Digital Nomad Visa
Residency, Immigration & Expatriation
A temporary residency permit specifically designed for location-independent workers and entrepreneurs, enabling 1-3 year stays in desirable jurisdictions without employment or investment requirements.
Diplomatic Passport
Citizenship
Special passport issued to diplomats and certain official representatives for use in connection with state functions.
Double Taxation
Tax & Legal
Situation in which the same income, gain, or taxable base is taxed by more than one jurisdiction.
Double Taxation Agreement (DTA)
Tax & Legal
A bilateral treaty between two countries allocating taxing rights for specific income types and providing mechanisms to eliminate or reduce double taxation.
Dual Citizenship
Citizenship
Legal membership in two nation-states simultaneously, providing rights, protections, and passports from both jurisdictions.
Due Diligence (CBI/RBI Context)
Business, Banking & Asset Protection
Compliance and risk review process used to assess applicants in citizenship or residency by investment procedures.
EB-5 Visa
Citizenship
US immigration category through which qualifying investment may lead to lawful permanent residence subject to statutory requirements.
Economic Citizenship
Citizenship
Citizenship obtained through an officially recognized economic contribution pathway.
Enhanced Due Diligence (EDD)
Business, Banking & Asset Protection
Higher-intensity compliance review applied where a person, transaction, or structure presents elevated risk.
Exit Tax
Tax & Legal
A tax some countries charge when you end tax residency: unrealised gains are treated as if sold on the day you leave, even though nothing was sold.
Exit-ArchitectGBM
Flag Theory & Sovereignty
GoodbyeMatrix role for planning and sequencing your exit: residency change, company restructuring, banking and asset positioning in the right order, as a Plan B or a full exit.
FATCA (Foreign Account Tax Compliance Act)
Business, Banking & Asset Protection
US reporting regime requiring foreign financial institutions to identify and report certain accounts linked to US taxpayers.
Flag Theory
Flag Theory & Sovereignty
Flag Theory spreads residence, citizenship, business, banking and assets across several countries on purpose, so that no single state controls your whole life.
Flag Theory 3.0GBM
Flag Theory & Sovereignty
Sergio von Facchin's Flag Theory for today: onshore instead of offshore, emigrate without new dependence, decentralise wealth in Web 3.0. Emigration optional.
Freedom Passport
Citizenship
Informal term for a passport chosen or valued primarily for mobility, resilience, and optionality.
Gift Tax
Tax & Legal
Tax on assets transferred during your lifetime without payment in return. Germany taxes gifts based on donor or recipient residency, with allowances every 10 years.
GmbH (German Limited Liability Company)
Business, Banking & Asset Protection
German limited liability company with separate legal personality, commonly used for traditional operating businesses.
Golden Passport
Citizenship
Informal term commonly used for citizenship acquired through a legally recognized investment-based route.
Golden Visa
Residency, Immigration & Expatriation
Informal term commonly used for residency granted through a legally recognized investment-based program.
Hard Assets
Business, Banking & Asset Protection
Physical assets with intrinsic value and no counterparty: gold, silver, gemstones, real estate, land. The bank-independent part of a Plan B.
High-Net-Worth Individual (HNWI)
Business, Banking & Asset Protection
Common financial-services classification for a person with substantial liquid or investable assets.
Holding Company
Business, Banking & Asset Protection
A company whose purpose is to own shares in other companies or assets rather than to trade. Used to separate operating risk from wealth and to manage dividends across borders.
Inheritance Tax
Tax & Legal
Tax on assets passed on at death, charged by the deceased's or the heir's country of residence or by the location of the asset. Germany applies it for 5 years after emigration.
Investment Immigration
Residency, Immigration & Expatriation
Umbrella term for legal migration pathways linked to investment, economic contribution, or business activity.
Investor Visa
Residency, Immigration & Expatriation
Residence or entry category for persons investing capital or establishing qualifying economic activity in a jurisdiction.
Jus Sanguinis
Citizenship
Principle under which citizenship is acquired through descent or parentage rather than place of birth.
KYC / AML
Business, Banking & Asset Protection
Know Your Customer and Anti-Money-Laundering: the identity and source-of-funds checks that banks, brokers and service providers must run before they work with you.
Limited Tax Liability
Tax & Legal
A country taxes only income with a source inside its borders, such as rent, a business branch or certain dividends. Often continues after you leave.
LLC (Limited Liability Company)
Business, Banking & Asset Protection
Flexible limited liability company structure, most commonly associated with the United States, that may be treated differently for tax purposes depending on its setup and the jurisdictions involved.
LLP (Limited Liability Partnership)
Business, Banking & Asset Protection
Limited liability partnership structure that can be used flexibly for partnership-based or international arrangements, depending on the jurisdiction.
Minimum Presence Requirements
Residency, Immigration & Expatriation
Minimum amount of physical presence required to maintain or qualify for a legal status, tax position, or immigration benefit.
Naturalization
Citizenship
Legal process through which a non-citizen acquires citizenship after meeting statutory conditions.
Non-Dom Status
Tax & Legal
Special regime for residents who are not domiciled in the country: foreign income is often taxed only when remitted. The UK regime ended on 6 April 2025.
Oath of Allegiance
Citizenship
Formal declaration by which a person affirms loyalty, constitutional commitment, or recognition of civic obligations toward a state.
Offshore Banking
Business, Banking & Asset Protection
Banking relationship maintained outside a person’s home jurisdiction or primary country of residence.
Offshore vs Onshore
Business, Banking & Asset Protection
Offshore means structuring outside your home country in low-regulation havens. Onshore means reputable jurisdictions with real substance. Under Flag Theory 3.0, onshore is the new offshore.
Passport Index / Passport Ranking
Citizenship
Comparative ranking system that measures passport utility using travel access and sometimes additional qualitative criteria.
Passport Portfolio
Citizenship
Strategic combination of multiple citizenships or travel documents to improve mobility, resilience, and international optionality.
Passport Strength
Citizenship
Degree to which a passport is practically useful internationally, especially in terms of mobility, entry rights, and broader strategic value.
Permanent Establishment
Tax & Legal
Tax relevant place of business through which an enterprise carries on all or part of its operations in a jurisdiction.
Permanent Residency
Residency, Immigration & Expatriation
Long-term or indefinite legal right to reside in a jurisdiction without necessarily becoming a citizen of that state.
Permanent Tourist
Flag Theory & Sovereignty
A lifestyle strategy of distributing time across countries to avoid becoming a tax resident anywhere, by staying below the residency threshold in each jurisdiction.
Perpetual Traveler (PT)
Flag Theory & Sovereignty
A person who structures their international lifestyle to avoid becoming a tax resident in any single country by continuously moving across jurisdictions.
Plan B
Flag Theory & Sovereignty
A fully developed backup structure designed to preserve mobility, legal continuity, and personal optionality if the primary jurisdiction becomes restrictive or unstable.
Police Clearance Certificate (PCC)
Citizenship
Official document issued by a competent authority confirming whether a person has relevant criminal records or known criminal findings in that jurisdiction.
Politically Exposed Person (PEP)
Business, Banking & Asset Protection
Person holding a prominent public function, or closely connected to one, who is treated as presenting elevated compliance risk.
Private Foundation (Asset Protection)
Business, Banking & Asset Protection
A legal entity without owners that holds assets for beneficiaries under a founder's charter. Used in Panama, Liechtenstein and elsewhere to separate wealth from personal risk.
Residence
Residency, Immigration & Expatriation
Legally recognized place where a person maintains a dwelling or may be treated as resident under applicable rules.
Residence-Based Taxation
Tax & Legal
The most common tax model worldwide: residents pay tax on their worldwide income, not only on what they earn at home.
Residency by Investment (RBI)
Residency, Immigration & Expatriation
Permanent or long-term residency secured through capital deployment rather than employment.
Residency Flag
Flag Theory & Sovereignty
The Flag Theory building block for where you hold formal residence. It drives tax exposure, banking access, compliance duties and future mobility.
Residency without Presence Requirement (Paper Residency)
Residency, Immigration & Expatriation
Residency status or structure that can be maintained with limited or no mandatory physical presence, depending on the jurisdiction.
Residential Deregistration
Residency, Immigration & Expatriation
The formal act of removing your registered residence from your home country's population register. In Germany and Austria the first step of a tax exit, but not the whole exit.
Schengen Area
Residency, Immigration & Expatriation
European travel area without routine internal border controls between participating states, operating under common rules for entry and short-term stays.
Second Passport / Plan B Passport
Citizenship
Additional citizenship or passport used as a strategic reserve for mobility, access, and resilience.
Social Security Contributions
Tax & Legal
Mandatory payments for pension, health, unemployment and care insurance, tied to where you work or reside. Often a larger burden than income tax for the self-employed.
Source of Funds
Business, Banking & Asset Protection
Documentation proving that capital used for an investment or financial transaction originated from legitimate, transparent, and auditable sources.
Sovereign BlueprintGBM
Flag Theory & Sovereignty
Your personal strategic plan under Flag Theory 3.0: as a Plan B built from home, or as a full exit with residence, business, assets and passport in the right order.
Statelessness / Being Stateless
Citizenship
Refers either to a person who is not recognized as a citizen by any state, or, in a strategic sense, to a person who has intentionally diversified their legal and geographic ties across multiple jurisdictions.
Substantial Presence Test
Residency, Immigration & Expatriation
Tax residency test based primarily on physical presence in a country over a defined period.
Supranational Settlement Blocs (SSBs)
Tax Authority
Tax & Legal
Competent tax administration responsible for assessment, compliance oversight, filing processes, and enforcement of tax obligations.
Tax Exit / Deregistration
Residency, Immigration & Expatriation
The legal and administrative steps that end your tax residence in a country: deregistration, cutting ties, and dealing with exit tax and extended residency rules.
Tax Haven
Tax & Legal
A jurisdiction with very low or no taxation that may be attractive for international wealth, asset, or corporate structures.
Tax Optimization
Tax & Legal
Legal structuring of income, assets, residence, or business activity with the aim of reducing tax exposure within the law.
Tax Residency / Tax Domicile
Residency, Immigration & Expatriation
The country that treats you as fiscally resident under its own rules and can therefore claim your worldwide income. Decided by presence, home and life centre.
Tax Residency Certificate
Residency, Immigration & Expatriation
An official document from a tax authority confirming that you are tax resident in that country. Required for treaty benefits and increasingly by banks.
Tax System
Tax & Legal
Umbrella term for the rules under which a state or jurisdiction taxes income, wealth, companies, or transactions.
Territorial Taxation
Tax & Legal
A system that taxes mainly income arising inside the country. Foreign-source income can stay outside the tax net, depending on how the country defines source.
Three-Base StrategyGBM
Flag Theory & Sovereignty
Strategic lifestyle model in which time, presence, and activity are intentionally distributed across three main locations to combine mobility, quality of life, and structural flexibility.
Travel Freedom Index
Citizenship
Comparative indicator measuring how broadly a passport allows entry without prior visa application or with simplified access.
Unlimited Tax Liability
Tax & Legal
The broadest tax claim a country can make: tax on your worldwide income, triggered by tax residency there, not by where the income was earned.
US LLC (Florida / New Mexico / Wyoming)
Business, Banking & Asset Protection
US LLC structure formed in frequently used states such as Florida, New Mexico, or Wyoming, each with its own practical, legal, and administrative characteristics.
VAT (Value Added Tax)
Tax & Legal
A consumption tax charged on goods and services at every stage of the supply chain, paid by the end customer. Rates and registration duties depend on where your customers are.
Visa
Residency, Immigration & Expatriation
Government authorization permitting entry, transit, or stay for a defined purpose and period.
Visa Run
Residency, Immigration & Expatriation
Leaving a country briefly to re-enter on a fresh tourist visa or entry stamp. A tolerated habit in some countries, a ban risk in others, and never a residency strategy.
Visa-Free Travel
Citizenship
Ability to enter a destination without obtaining a visa in advance, subject to the entry rules of that destination.
Wealth Management (International)
Business, Banking & Asset Protection
Cross-border coordination of asset holding, banking, structuring, reporting, and succession considerations.
Wealth Tax
Tax & Legal
Tax imposed on the holding of certain assets or on net wealth itself, regardless of whether the assets produce current income.
Withholding Tax
Tax & Legal
Tax deducted at the source before dividends, interest or royalties reach you, typically 15 to 35 %. Treaties and residency certificates can reduce it.

Why this glossary is different

Most glossaries define terms. We put them in context: what does this mean for your residence, your passport, your assets?

Terms marked GBM come from our own work, above all Flag Theory 3.0.

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Citizenship Insider Report

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