There are three parts to this question: Are there any taxes to pay:

 

a) On payments made into the pension plan

b) On investment growth, increase of the pension value whilst its invested and growing inside the pension plan, and

c) On payments made out of the pension plan in future.

 

The first point is that there are no taxes to pay on any of the above to the governments of the countries where this pension plan is based (Cayman Islands, Puerto Rico, Malaysia).

 

The second point is that tax laws vary from country-to-country, and they can change, and most importantly the ones you need to comply with are the ones where you live, not other random places.

 

On payments made into the pension plan, if your pension contributions are being paid for by your employer, it will usually be treated exactly the same for tax purposes as any salary you receive in cash. If you’re paying into your pension yourself, there’s no tax due as you’re just transferring money from one account in your name to another account in your name, there’s no new “income” involved and therefore no tax implications at all.

 

On investment growth, again there’s nothing to pay to the government of where your pension plan is based, and in the vast majority of countries worldwide, no taxes due on any investment growth inside this plan, due to the way it is set up in law. Some countries have specifically passed laws to override this and may require you to pay capital gains tax on any difference between what you’ve paid in and the end-of-year value, but this is rare and in most cases not applicable for this type of pension plan, and there is usually a capital gains tax allowance which you’re unlikely to exceed unless you’re already very wealthy or making very large pension plan contributions. If you are a taxpayer in a specific country due to your residence there, check with a locally-licensed tax advisor in the specific country that you pay your personal taxes to be 100% sure. If you’re nomad-ing a lot and not spending 6 months or more per year in any one place, in a lot of cases you don’t owe any personal taxes anyway, you’re treated the same as yacht crew and rock bands on a world tour for tax purposes :-) Again, check with a locally-licensed tax expert just to be 100% sure.

 

On payments out of your pension in future, again it will depend on a) where you’re living at that time, b) what the tax laws are at that time, and c) what your specific circumstances are at that time. Because you have a full range of options for what to do with this pension plan in future, ranging from being paid 100% of the value in “cash” (not literally cash, it will be by bank transfer, but that’s how it’s treated in law), to being paid a monthly payment, to reinvesting it in another tax-advantaged product designed for one-off large amounts rather than regular payments in, the best advice is to start thinking about your options a year or two in advance of your pension plan duration coming to an end, and speak to a) us, and b) a locally-licensed tax advisor wherever you live, to be 100% sure.

 

The general principles are that because your pension plan is 100% in your name you won’t have to pay income tax on it in in future (because you’ve been funding it from income all the way along, and therefore already paid any income tax due on your income – transferring money from yourself to yourself is not “income” for tax purposes, even if you’re using regular withdrawals to fund your life in retirement), and if capital gains taxes are due in the country that you’re living in at the time, it would usually only apply to the most recent tax year (not the whole duration), and again there are usually allowances which would often mean there is no tax due.

 

The main points that we really want to bang on about are firstly that no taxes are due or deducted at source on any transfers in or out of your pension plan, nor any investment growth, and that your personal tax situation will depend on your personal circumstances regarding where you live, what other assets you have, and what your personal tax circumstances are – and therefore you should speak to a locally-licensed tax advisor in the country where you pay your taxes to be 100% sure.