ARE YOU A PT? by Peter Macfarlane

“Are you a PT?” asks the border guard, thumbing through all the entry stamps and residence visas from countries he has never heard of in your passport. If you are, then you know the correct answer without blinking: “A what, sir?”

PTs were once described as “an amorphous group of freedom-loving individuals.” In fact, you may well already be one without even knowing it. PT is not a club to which you can belong. It’s a lifestyle choice. PTs see themselves as sovereign individuals: untethered to any nation state, they are expatriates but definitely not patriots. Politically, if only you could pigeon-hole PTs (which you can’t) you might describe them as libertarians who have no interest in politics.

There are a number of ‘how-to’ books about being a PT, but if you put twenty PTs in a room together you will undoubtedly get twenty different answers about the best ways to implement those instructions. PT, above all, is about individuality and freedom.

Whether talking to border guards or to casual acquaintances in bars from Singapore to Stockholm and cheaper places in between, PTs are discreet by nature and will always have a cover story. A typical PT will have the outward appearance of a seasoned and rather boring business traveler, rather than the pot-smoking backpacker who wants to overthrow the government, who may be quietly lurking inside. A friend of mine calls them “gold card hippies.” This is the result of several generations of successful adaption to habitat – such as TSA requirements and the simple realization that Marriotts are more comfortable than youth hostels. PTs know there’s no point in fighting the system, but that you certainly can play the system from within it.

The term ‘Perpetual Traveller’ or ‘Permanent Tourist’ was first coined by Harry Schultz in the 1950s. Harry Schultz is a legendary investor, trader and slightly wacky newsletter publisher, now retired and reportedly living in Monaco. (I should warn you however that ‘Privacy Thinkers’ are known to get a kick out of spreading disinformation on their whereabouts.)

Schultz, who considered himself both a tax exile and a conscientious objector to the military service that was then obligatory in his native USA, wrote about a jet-set lifestyle using three countries or ‘flags’ to legally avoid inconveniences like taxes and conscription. On his travels he quickly discovered that pretty much everywhere you go, governments treat foreigners better than locals.

Simple then: change citizenship and become a foreigner. Live in a different country from the one where your passport is issued. For good measure, keep your money and business in a third country where neither of the other two governments knows about it. As such, one is ‘Protected Thoroughly’ by three flags.

In the 1980s, the next generation of PT came from writer and lecturer Dr W.G. Hill and Scope International, his publisher based in a large country house in southern England. A series of books with titles like PT1, PT2, and The Passport Report were advertised in magazines and newspapers worldwide. Those who got on the mailing list received a regular free newsletter called the ‘Mouse Monitor’ – sub-titled ‘the international journal of bureau-rat control.’ Much of Scope’s material was of course tongue-in-cheek: gems in the PT books include how to be ordained by mail in California for ten dollars, and how to join the ranks of British nobility by buying a square foot of land in Scotland that came with a legally rather questionable right to a title.

The humor of these harmless antics was, however, lost on many as it was undeniably anti-establishment. There was a more serious side too: PT in those days was all about not paying tax. On the surface, Hill preached legal tax avoidance – but many readers were no doubt tempted to cross the line to illegal tax evasion. PT therefore developed a slightly edgy side, with its proponents becoming ‘Paranoid Together’ and taking on a ‘trust nobody’ approach.

As Margaret Thatcher relentlessly knocked down trade barriers and globalization was becoming the norm, Hill developed Schultz’s ideas by adding another two flags, creating the Five Flags Theory. Scope relentlessly couriered out expensive leather-bound books about the five flags to willing buyers in all four corners of the world. Their best moment was when the late Democratic Senator Pat Moynihan, an anti-tax-evasion campaigner, held up one of the Scope books in a televised debate as an example of what the filthy rich were doing and declared “this is the manual on how to legally avoid taxes.” Sales went through the roof. Even on my travels today, I sometimes recognize these books on the shelves of lawyers or bankers I visit.

Then, in 2006, an anonymous author writing under the name of ‘Grandpa’ released a three volume tome entitled ‘Bye Bye Big Brother.’ Firmly rooted in the internet era and in the post-9/11 surveillance state, Grandpa added the sixth and final flag: cyberspace.

Having reached a certain age, I can now look back romantically at the more cloak-and-dagger aspects of PT. I clearly recall, for example, the first Austrian ‘sparbuch’ anonymous savings account I bought as a student, carefully paying cash for the booklet and having it shipped to a maildrop so it couldn’t be traced back to me. The fact that I didn’t have any money to hide, especially after becoming the proud owner of a square foot of land in Scotland, didn’t deter me in the least!

But can the PT concept survive the new age where ‘Privacy Thinkers’ are being forced through full body scanners into ‘Perfect Transparency’? I believe yes.

The original concept of PT was living off the books. Early PTs didn’t need to bother about the residence flag at all. They could literally live nowhere. This doesn’t work any longer, except perhaps for a very dedicated few.

Governments around the world have clamped down on hidden foreign bank accounts and penalties for failing to declare have become nothing short of draconian. Passport security has tightened up a lot too.

However, in so many ways I see PT ideas becoming much more widely accepted by society at large. Passports are the most obvious example. Dual or multiple citizenship was a rarity even a decade ago, whereas now it has become the norm. Surely most of us know many couples of different nationalities who have kids with multiple passports. Yes, dual citizenship, that crucial aspect of PT that governments tried to resist for decades, has become totally normal and accepted.

The internet has opened up the possibility for any entrepreneur to form a company and open a bank account on the other side of the world for a thousand bucks. ‘Privacy Tactics’ that used to be reserved for the privileged elite are now accessible to everybody.

And finally, it’s no longer about taxes. I think these days it’s more a genuine lifestyle choice. Today’s young entrepreneurs are more mobile and totally willing to hop on a plane to seek out opportunities, whether in business or with the opposite sex (leading to yet more kids with multiple passports.) The next generation of PTs is again adapting to habitat to achieve goals effectively and explore exciting new frontiers of global business.

Yes, that’s right, sixty years after Harry Schultz coined the term, PT is going mainstream…

Am I a PT? Most certainly not! But I do know a few.


CITIZENSHIP:  The passport you carry. Should be from a neutral, well-respected country so that it has good visa-free travel possibilities. Should also be a counCITIZENSHIP: try that doesn’t tax its non-resident citizens and allows multiple citizenships. Examples: Canada, most European and Caribbean countries…

RESIDENCE: Your official country of residence, though not necessarily where you spend your time. This is the address you give when you check into a hotel. You will normally have an official document such as a residence permit from this country. It should be from a country that doesn’t tax its residents on income generated outside its borders. Example: Monaco, Andorra, Belize, Malaysia, most of Latin America.

ASSET HAVEN: One or more stable financial centers where you keep and manage your money, using trusted asset managers and possibly making use of trusts, foundations etc. Examples: Switzerland, Singapore, Panama.

One or more countries where you earn your income. Everything you do here is tied up in companies, that file their own accounts and pay up as necessary. They are owned from the asset haven so they don’t trigger any requirement to file a personal tax return. Can be located anywhere in the world. The PT ideal is to sell goods and services over the internet so the business base can be a simple offshore company.

PLAYGROUNDS: These are countries where you spend your time physically, depending entirely on your personal likes and dislikes. Hot beaches or nightlife, or cool mountains, you choose. If you get bored, you move on. In these countries you are a mere tourist ‘Passing Through’ who is welcomed because you spend money, and nobody even thinks of trying to tax you.

CYBERSPACE: This is your extra-jurisdictional flag that brings the other five together. You can be everywhere and nowhere at the same time. One or more secure data havens or communications centers are essential to today’s PT lifestyle.

About the author:  Peter Macfarlane is a financial commentator and joint editor of The Q Wealth Report ( who also runs a private consulting firm in the field of offshore finance, Peter Macfarlane and Associates ( He spends most of the year on the road visiting his portfolio of high net worth clients, attending conferences, and carrying out due diligence on offshore banks.