Before you pack up and shift your entire world to a foreign land it is well worth taking it in stages. Now-days it is easy to operate from a virtual office either domestically of from offshore - without ever having to relocate physically. Once you have determined that a virtual office location would be suitable for a manned office it is a simple transition - and you should by then already have an established relationship with your virtual office provider to upgrade to a fully serviced office.
This should be the next step after having tested the waters first through the virtual office.

It's an international marketplace after all, and there are plenty of nations willing to provide commercial services for foreigners wishing to establish businesses in their domain and for welcome expatriates fed up with Uncle Sam.

Countries like the Bahamas make tax haven status an integral part of their marketing-relocate to Nassau, and you'll fear no tax man. That's because, for Bahamians and resident aliens there are no taxes on personal income, capital gains, inheritance or gifts.

"Monaco is a luxury destination," says Maguy Maccario-Doyle, consul general to the United States. "It is a soft tax system, but we do have a value added tax around 30% on luxury items such as jewelry or restaurants and all the best luxury people are here within a square mile."

And it works. Six of the Forbes Billionaires reside in Monaco, making one in every 5,400 residents worth over a billion dollars. The principality's housing market commands a median price of $3,000 dollars per square foot, ahead of Manhattan and London, according to international real estate analysts Global Property Guide.

Bermuda, though it has only three billionaires, has the highest gross domestic product per capita in the world at $70,000 per citizen. Hiding out in Bermuda is so popular, in fact, that the government makes it virtually impossible to get permanent residency, and requires that foreigners buying into the market pay a minimum of $1 million for their home and then a 22% transfer fee to the government.

Most countries assess taxes based on residency, not citizenship. As a result, people across Europe who settle down in Switzerland ease into the moderate tax rates. For Americans, however, there's no escaping the long arm of the IRS.

For Americans abroad, the only way to fully take advantage of tax havens is to renounce American citizenship, which over 500 people, almost all of very high net worth, did last year. Soaking in the sun, watching the Monaco Grand Prix and doing your best Grace Kelly impression makes for easy living, but comes at a cost. For most it's difficult to imagine relinquishing a U.S. passport, and that's why some states offer significant tax relief.

Nevada is the closest thing the U.S. has to a tax haven. No personal income tax, no capital gains tax, no gift tax, no inheritance tax, no franchise tax, no inventory tax.

Avoiding taxes in other states isn't as simple as scooping up a place in Nevada and claiming residency. Other states levy taxes for income made on their soil, so retired persons have long been the main benefactors of the state's tax structure, but that may be changing.

But should you choose to relocate to one of the world's tax havens, what can you expect?

Even when relocating to paradise, moving abroad can be a tough adjustment. But it can also offer opportunities for you and your family to explore local culture or take up new hobbies.

Cities like Hong Kong and Geneva offer as many cosmopolitan amenities as you can expect to find anywhere, with many of the comforts of home, from cinemas showing American movies to top-notch international cuisine. Moving to a small island, though, can make it harder to import your lifestyle -- but fortunately the way of life most often is alluring. Bermuda, for example, has nine golf courses crammed into just 20.6 square miles and temperatures that seldom fall below 60 degrees (16 celsius) or rise above 85 (29 celsius), meaning that it's a rare day you can't play. In the British Virgin Islands, it would be a sin not to work on your skippering skills, while a move to the Cayman Islands virtually requires an interest in snorkeling or scuba diving.

Monaco and Gibraltar are among our most miniscule tax havens, but there's no need to feel confined. If you tire of the gambling, sunbathing and nightclubbing to be had in Monaco itself -- which may take a while -- the French Riviera is just a short convertible drive away. From Gibraltar, visit Spanish beaches or the Moorish architecture of Andalusia.

That is if you're not glued to your computer. It takes work to make all that tax-free money, after all.

When people think of tax havens, they usually picture the Swiss Alps or Caribbean islands.

But traditional venues like Switzerland, the duchies of Lichtenstein and Luxembourg and Caribbean paradises like the British Virgin Islands are finding competitions from the US, where lawyers in seven states, such as Nevada and Alaska, are muscling in, looking to grab business from the world's wealthy.

They're peddling the concept of a "self-settled spendthrift trust", an irrevocable trust that is created by its beneficiary and is designed to preserve wealth. A consequence of that is that these trusts can help shield assets from lawsuits or creditors.

Contrary to the popular vision of "offshore" banking, the true purpose of these accounts for many wealthy clients is to protect a lifetime of earnings and savings not from being taxed, but from being wiped out in a major lawsuit — say, a medical malpractice or class-action securities litigation against an executive.

There are other strategic reasons. Offshore companies in the British Virgin Islands, for example, can be used to house estate assets that can be passed to family members without estate taxes.

And offshore accounts can open doors to new investment opportunities. Offshore investment funds not registered with the US Securities and Exchange Commission often require US-based investors to set up an offshore entity to participate.

Of course there is the, ahem, possibility that the accounts are being used to avoid paying excessive taxes, even though US taxpayers who have offshore accounts are required to file annual forms to the US Internal Revenue Service detailing transfers and other trust activities — or face a penalty of 5% of the value of the assets. They are also supposed to file forms detailing distributions from their trust (or face a penalty of 35%).

Some countries don't necessarily enforce the reporting requirements, and some, like Luxembourg, say it's up to the trust owner to keep up with the paperwork.

Perhaps for that reason, "offshoring" has acquired a bad name. There has been a push internationally to rein in what countries can offer foreigners looking to park assets. Earlier this year, German tax authorities raided Lichtenstein, and the scandal involved spies hired by the German government to investigate what German citizens were doing with their money there.

Maybe that's why there is a movement to put assets in US accounts. US trusts are less costly to set up and have less paperwork hassle than some offshore locations. They are available in Alaska, Delaware, Nevada, Oklahoma, South Dakota, Rhode Island and Utah.

Still, there is reason to pause before diving in. For starters, there isn't enough case law in the US to judge whether the onshore trust will shield assets for those who don't actually live in the state where they were formed.

For another, there's a reason why other states haven't climbed on board. As a basic public policy, it makes little sense to encourage individuals to hide or keep out of reach assets from their creditors or others, such as angry ex-spouses.

And US trusts don't necessarily make it impossible for creditors to go after assets. Where a creditor might be deterred by the expense and hassle of pursuing assets held offshore, that isn't necessarily the case at home.