Best Practices
Best Practices
Ep. 29 - The secret U.S. territory where businesses pay almost NO taxes w/ William Davis
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In this episode, I sit down with William Davis, co-founder of Saipan Team, to uncover one of the most surprising and untapped opportunities for entrepreneurs, remote professionals, and manufacturers alike: the Northern Mariana Islands (CNMI). From its unique tax and tariff advantages, this U.S. territory offers a rare blend of offshore flexibility and American stability.
William shares firsthand insights from living and working in Saipan — covering everything from affordable housing and internet speeds to a rebate-based tax system that can drop your effective income tax rate to as low as 4.5%. Whether you’re a digital nomad, startup founder, or business owner seeking smarter ways to manufacture and distribute goods to the U.S. mainland to beat tariffs or pad your retirement, this conversation is a revival of America's golden age of economic freedom.
Get in touch with William and his Saipan Team at the link below:
Jared Wall on LinkedIn: https://www.linkedin.com/in/jared-wall-792590120/
Welcome back to another episode of Best Practices. I am your host, Jared Wall. I'm very excited to be joined by my friend today, William Davis. William, how are you doing? Welcome to the show. Good morning, Jared. Thanks for having me on. My pleasure. You uh I'm excited about this conversation. You have uh an interesting, what's the word I'm looking for? Uh I don't know. You have you have an interesting nugget of information, maybe, so to speak, of how people and business owners might be able to save money on taxes and tariffs and things like that. And so I want to kind of learn all about that today and and share it with my audience. Um, but I got are you uh let me let me guess. Are you gonna give us the the the Irvine Schiff uh narrative that the 16th Amendment was never actually ratified and so we just don't actually have to pay taxes and uh just just forget about it and we're all good? Is that is that what you're gonna tell us? No, no, no.
SPEAKER_01This is gonna be a little different than than that take for sure.
SPEAKER_02Yeah, Irv Irwin Erw is it Irwin or Irving? I can't remember.
SPEAKER_01Yeah, because I think that's the father of Peter Schiff.
SPEAKER_02Father of Pi Peter Schiff, yeah. He had this whole thing where he was saying that, and I think he's probably right if you actually look at the history, but legally that doesn't really matter, that the 16th Amendment was not like legally ratified per constitutional requirements, and therefore his position was that the the IRS and the income tax was all just kind of fake, so to speak, and you could just ignore it, and he ended up uh dying in prison a few years back, so that's how that went for him. Um so I'm hoping maybe you have something uh maybe a better uh uh suggestion than than he did. I uh he was uh he actually was kind of a heroic person in in some in some aspects, you know, kind of standing up uh for for his beliefs in that thing. But I'm not trying to put anybody in jail. I don't want any of my listeners to die um, you know, uh handcuffed to a hospital bed. But so uh I don't know, maybe give me a little bit of your background and then we can kind of jump into to our larger topic.
SPEAKER_01Sure, yeah. So my name is William, and I am a representative for what we call the Saipan team. It's an organization that is based in Saipan in the Northern Mariana Islands. And my goal is to spread the word about what this place has to offer to American businesses, and uh and it doesn't matter if you're in the physical business or if you're a digital nomad type where you where your work is done remotely. Uh, we have something to offer both parties, and uh the best thing about it is that this place, Saipan, is part of a U.S. territory, which gives you very unique advantages compared to living within the 50 U.S. states.
SPEAKER_02Okay, so it's it's a U.S. territory similar to like Puerto Rico or Guam or American Samoa. Um is that kind of correct?
SPEAKER_01It it is it it so it is a U.S. territory just like those other places. However, they're a little different in their status structure with the United States. Uh so one of the interesting things is that, say, Puerto Rico, for advan uh, for example, they are part of the federal system. And so like one of the big things that a lot of people talk about that disadvantage Puerto Rico is that is it is under something called the Jones Act, which makes it very expensive and very hard to get products to Puerto Rico during, like say, the hurricane season if they get really hit really hard. The uh the Northern Mariana Islands is outside of that federal customs system. So something like the Jones Act would not uh impact them. And so this means that if there's a shipment of products that say come from South Korea or China, that that shipment can go directly to the CMI, uh what we call the Commonwealth of the Northern Mariana Islands, without having to pay any extra fees, and it can be done generally cheaper and faster than having to incorporate the the Jones Act, which means that your boat, it has to be an American-made boat, it has to fly an American-made flag, the crew have to have to be all Americans. So it allows for a lot faster access to goods. So uh, but that's something unique about Puerto Rico being within the custom system. The CNMI is not in that. And so relating that to like say the big topic of today, which is tariffs, any company that is looking to, any company that tries to create products and wants to sell them into the United States, as of right now, October 20th, uh, there's this big thing about the US federal government putting major tariffs on China. Uh right now they're at 100%, but they're also putting tariffs on other countries as well, like Singapore, Japan, South Korea, Europe, the UK. Uh so you know, tariff is the big word. But as of right now, with the way that the CNMI custom structure is set up, if you were to basically to create goods within the CNMI, you could get around those tariff barriers, and you could continue to sell your products at the same price that you would have before the tariffs went into place.
SPEAKER_02That's fascinating. Okay, so help me help me just uh you kind of touched on it briefly, um, but maybe maybe give me a little bit more understanding of what the Jones Act is and how it, you know, um makes more difficult uh you know importing products into into the US or you know what what are the restrictions associated with you I know you mentioned about the ships and the you know the flags and the crews and whatnot. Is there anything beyond beyond that that that is part of the Jones Act?
SPEAKER_01Uh no, that's the major thing. I mean, you know, so again, you know, if you're trying to get products to places where this is incorporated, it generally increases the cost of some of bringing stuff over. And so the example I use was like, say, with Puerto Rico, when there's a hurricane and they have a lot of products that are destroyed, a lot of stuff that's destroyed. The um what like so for instance if you needed like products shipped in from Mexico to go to Puerto Rico, they would f because they fall under the Jones Act, products that go to Puerto Rico need to be shipped to need to be shipped in from another US port. So those products, so say from Mexico, they'd have to go from Mexico to say New Orleans, a port in New Orleans, and then from New Orleans they could go to Puerto Rico. And so just by versus just say Mexico to Puerto Rico. And so what this does is it increases costs and it increases the um the amount of time that it takes for these places to receive their goods.
SPEAKER_02So if Me so to continue your example that you're you're you're illustrating here, if Mexico was selling goods directly to Puerto Rico and so they loaded all their goods up onto a Mexican ship at a Mexican port and went out into the Gulf of Mexico, what would happen if they just went directly to Puerto Rico? Would it get turned around by customs officials or would they have to pay a fee or or how does it work?
SPEAKER_01They would get turned around. Really? So basically you can't do it. From my understanding of that.
SPEAKER_02Wow, okay.
SPEAKER_01And the way this relates to uh the Northern Mariana Islands is that we don't fall under those customs territories. So the uh the Northern Mariana Islands has this unique status because they are outside of they have a unique agreement with the federal government. It's called the Covenant. And one of the big things in that covenant states that they are outside of US customs. And so that means that if you have a a ship, say that you had a disaster there, for example, and you needed generators to uh help supply the uh help supply power, instead of having to uh have uh these generators brought to this island via a a boat that had an American flag or an American with an American crew, you basically could get the same generators from a Chinese ship with a Chinese flag, from those generators from say mainland China to the CNMI directly instead of having to go through a lot of the complications that the Jones Act has.
SPEAKER_02Okay. That's interesting. I want to get into that a little bit more, but uh maybe we maybe you know we're kind of still early in our conversation here. Let's let's back up just a second, because I know um you're originally from kind of the area that I I I live in right now, which is the Charlotte area of North Carolina. Um I think you're from a different part of North Carolina originally. How did you end up way out in the middle of the Pacific Ocean?
SPEAKER_01Yeah, so the uh uh my my story is a little interesting. Uh I basically, this was around 2021. I was working, at this time I was working fully remote, and I I was just I was kind of, I guess for lack of a better, I was kind of bored. Uh, you know, because this we were still living during the COVID times, and I was just and there were some restrictions in place, and I think I just wanted to do something with my life. I kind of felt like I was really going nowhere. I had listened, but I had always had this interest in traveling abroad, and I had done lots of travel. Uh not not the long-term type where you hear stories of people going for two or three months, but I had done stuff more along the lines of like say a couple weeks, maybe a month. I think my longest travel experience up to that time was five weeks. And uh and I know that is a privilege compared to some other folks, uh, you know, who only get like a week or two off. And and I understand that. However, for me at the time, because I had I had been able to achieve fully re remote work status from my my job. And so I was just looking for something to do. And I had heard about I was listening, there was a podcast I'd listened to was a a podcast that did a talked a lot about travel, and there was one gentleman on there, he talked about living in the island of Saipan. And that's when I heard all about Saipan, it being a US territory, you were still under the federal government, the US federal government uh standard, so they you know they spoke English, they'd use US dollars, uh they all the departments that you're familiar with here in the mainland, uh, they have those there. And so it sounded really interesting to me. And they also had a very interesting uh group of, I guess you could call them cryptocurrency or bitcoiners there. And I was j I was just really curious about this whole place. And while there were a lot of countries that were still locked down, because it was part of the federal government, or because this territory was part of the US framework, I was allowed to go there. And so I decided to take a three-week trip to check it out. I went there, and um while it's while it's really different from what we would expect here in a major city like, say, Charlotte, I was I was just curious about uh what this place had to offer. And so I went there, I met some people, and I really I really I kind of felt like home. You know, there were a lot of people that had I met met there. They were really interesting, and we were having some good conversations, and I wasn't having too much of that locally in Charlotte. And so I said, you know, I'm just gonna I'm gonna take the dive. I want to do something interesting. So I I went there, checked it out for three weeks. I really enjoyed it. Then I started making plans for the next six months to eventually relocate from Charlotte, North Carolina to to Saipan and the Northern Marion Islands, and like you said, in the middle of the in kind of in the middle of nowhere. I think the closest, now we are pretty close to Guam, which is another U.S. territory that's about a half hour away. But as far as like a a country, like another country, it's not like the mainland US where Canada is to the north and Mexico is to the south. I mean, we're just surrounded by ocean. I'd say the closest country to the Northern Mariana Islands is going to be outside of Guam would be Japan at about three hours.
SPEAKER_02Okay, so that's that's the the travel route that you take is through Tokyo typically or you do they do have direct routes from in Saipan from Saipan to Tokyo, and it's yeah, it's about three hours.
SPEAKER_01Then we have another flight that goes to Seoul in South Korea, that's about four hours. And then there is another flight, I think it's a new flight that just opened up or reopened up. Uh that is to Hong Kong, and that's about five hours.
SPEAKER_02Okay. And so that's kind of starting to get into the lifestyle of what it's like living in Saipan. Would I guess I want to talk about that a little bit, but I also have a have the question of you know I I I want to learn both about your lifestyle and the cost of living in Saipan, but also about the you know how the the legal and the tax structure of the CNMI could benefit businesses that are currently operating in the continental or you know, in the the the the um I don't know what the word I'm looking for, but in the actual United States uh so I don't know. I mean honestly, whichever you prefer to talk about first, if you want to talk about your you know your lifestyle on the on the island and the cost of living, feel free to go with that direction. Or if you want to talk about you know more about the business opportunities and how that works, you know, whichever, whichever direction you want to go, feel free to pick up the ball and run with it.
SPEAKER_01Sure, yeah. So I can talk about the um so there, you know, be living on an island certainly has its pros and its cons. Uh I let me talk about the lifestyle stuff first. So one of the big things that uh that Saipan that really just kind of blew me away was the um the lack of options when it came in comparison to the mainland U.S. So, like on the mainland U.S., we have Target, we have Walmart, we have uh a number of grocery store chains like Publix, Harris Teeter, Kroger. Now, granted, I'm speaking mainly from the perspective of someone in the American South, Southeast. So there may be other grocery store chains out there. I don't know those. But the idea is that there's hundreds of options. There you go. Uh in the CNMI, you don't have too many options. In fact, they have one option, it's called Johten, which is would probably be considered a local franchise uh department slash grocery store. So they have a couple of those on Saipan. But outside of that, you're gonna find a lot of smaller mom and pop grocery stores that are generally operated by either Filipinos, since the Philippines is about four hours west or two, yeah, west of Saipan, as well as a lot of Chinese. And so you see a lot of Chinese and uh and Filipinos running grocery stores there, and you know, there's plenty of them. And you're but you're not gonna find a lot of American brands. You'll find a lot of brands from say Australia, New Zealand, China, Japan, Korea, and kind of going back to what I was saying with regards to the Jones Act, because these companies can just ship directly to the CNMI, well, we do have a lot of more international options for basically the same thing that would get in the U.S. And because of that, some items do come in a little cheaper than you would find here in the mainland, in part because of freight costs that really kind of keep things cheaper. As far as uh rent goes, I would put the rent on par uh actually I'd put it, I'd say right as of right now, it's a little lower than what I would expect in the American South. I was just talking with my brother uh not too long ago, and he lives about 45 minutes west of Asheville, North Carolina, and he was telling me he for like for a one-bedroom apartment he was paying about $750 a month. And in Saipan, something comparable could easily be about half that cost to where you're finding it for like $375 or $400. Uh they have studio apartments there for about $200. And and you know, these are you know, I'd say these are average size rooms to what I would expect here in North Carolina. Some are going to be a little smaller, because it is a small island. But uh you'll you'll also find plenty of other larger options too. Uh, you know, because it's a you know, because we are talking about an island, it's not like I can like rent a U-Haul and drive across state lines and then unpack my stuff. You know, a lot of the uh the people that live there and try to rent places out understand this. And so generally when you're looking at a little more costlier options, you are talking about uh pre furnished ro pre-furnished homes. So essentially you as soon as you walk in, they got couches, they got televisions, they got beds, they got silverware, etc. etc. So you can find many places that are already furnished. And as far as the living costs go, the rent typically goes about it can go between $500 to $1,500, depending on how elaborate you want, uh how what kind of place you want. But for a gener for generally speaking, you can find very good accommodations at prices that I'm kind of shocked to see are lower than they are in the South. Now, granted, uh pricing in general for rent has gone up dramatically since COVID. And so I think that this place has not been too impacted by that.
SPEAKER_03Okay.
SPEAKER_01So that's the lifestyle part.
SPEAKER_02What about uh well what about the um like uh connectivity? You know, what kind of what kind of internet do you have access to? I know you you work uh 100% remotely um in in Saipan, so I imagine you have to have a pretty decent internet connection.
SPEAKER_01Yeah, I'd say it's decent for the um for the most part. Uh, you know, so I work in advertising, so I'm not really and particularly the writing side of advertising. So I'm not dealing with a lot of major data downloads. The biggest thing that I'm working with is say a um yeah, I would say it's it's it's like Word doc, which is pretty low. Now there are uh now don't get me wrong, there are plenty of people who are downloading YouTube videos and all this other stuff there. Uh but I think the internet, as far I don't know the gigabyte speeds per se. We do have Starlink here, and there are some people that are leveraging Starlink to fly 400 megabytes a second. I I don't know if that's a lot or not, but I do know they don't really have any problems when it comes to uploading YouTube videos. There are there are some other challenges with the internet speeds. Obviously, they're not gonna be as fast as they would be on the US mainland. So if you're looking at playing or streaming the latest 4K uh FIFA team FIFA soccer game to your Twitch community, that could cause some challenges. But I'd say depending on the business, that's not gonna be a major issue. And interestingly enough, Google is actually expected to lay down fiber here within the next 12 months.
SPEAKER_02Wow in the CNMI. Yeah, I think you and I started talking about it.
SPEAKER_01That would be a major game changer. Yeah.
SPEAKER_02So Google is is doing uh a trans oceanic fiber cable, and so it's it's uh kind of one of the I don't know, transition points is is in the uh CNMI.
SPEAKER_01Yeah, as of right now, from what I recall seeing, Google has been laying fiber between California and Japan, and then that same fiber is going to go from Japan to Guam and uh the Northern Marion Islands.
SPEAKER_02Very cool.
SPEAKER_01So for anybody worried about speed, I'd say speed is right now good for the most part. I mean, people on island are able to watch Netflix in 4K. And when I spoke to people during the um during the lockdowns in 2020 and 2021 when everybody stayed home and just watched Netflix all day in 4K, there was a coming, there was some slowdown, but it wasn't really that bad.
SPEAKER_03Yeah.
SPEAKER_01And so, you know, I don't think I think for most people that are doing major uploads, I don't think it's gonna be a major problem. I think the concern is I particularly now as newer modems are coming out, as newer options are coming out. Uh a lot has a lot has been done, particularly with phone modems over the last five years. And so now connectivity is not really an issue for for money people. You know, the the strides have been made by Media Tech and Qualcomm in their phones has been pretty good. The modems that they get on Island are also very good. And so for most people, there's not really an issue when it comes to internet speed. So I wouldn't I'd say that this is not a major problem for a lot of people to consider. I do know one company, they were a little they complained a little bit about Starlink and how it wasn't fast enough for them. But they were also coming from Austin, where they were doing a lot of tech stuff anyway. And so I think it just depends on your expectations.
SPEAKER_02Yeah, I'm surprised to hear uh that um that person was saying that Starlink was slower than what they were used to, because I was uh my my wife is from Kenya and we were we were there in the first part of 2024 visiting family and kind of you know exploring the country a little bit and we went and spent a couple of days way up in like remote, remote northern Kenya, you know, where um the most remote part of the world I've ever been to. In order to get to the place we were staying at for a couple of days, we had to drive off-road for for three hours to get where we were going. So it was remote, remote. Um and the so we were visiting a family, uh a missionary family that's sponsored by my church, and uh you're kind of bringing them a uh you know a care package and things like that. But I he had Starlink internet, um, like I said, way out in the most remote part of the world that I've ever been to. Maybe not as remote as the the the Northern Mariana Islands, it's not surrounded by water um, you know, for a hundred miles in every direction, but uh, you know, it was three hours away from any asphalt road. Um, but anyways, it was by f it was I was shocked at how fast the internet was. At the same time, he m was probably the only person in that area pulling from Starlink, you know. So so whichever satellite he was pulling from, he might have been, you know, one of the the very few people to actually be pulling data from it. I don't know how that system works, but uh I uh I just I I remarked that that um Starlink was extremely fast. And I I mean I agree with you. I think um the competition that has been growing in the world of technology, uh especially you know, connectivity, um has been wonderful for for places that would otherwise be almost cons not exactly considered uninhabitable, but not uh wouldn't be considered you know a first choice for somebody going from you know a first world type lifestyle in the US or in Western Europe or something like that, in Japan or Korea, and wanting to go to a place like CNMI. But now with you know the ability to connect and um with the speed of of data transfer and whatnot, it's really opening up a whole big part of the world to to to settlement and development. So, anyways, that was just a thought I had. I don't really have a question out of that.
SPEAKER_01No, it makes sense. I mean, most of the folks that I've met in Saipan that use the um the internet that uses particularly Starlink there, they seem quite happy with it. So I don't I think a lot of the other stuff is really um I I think it's just this the um it's just too much, there's a little bit of a comparison that's going on, really, really high comparison. And so I think that's diluting some of the uh the ideas there between is this better? But you know, the question is is it it's like that old saying goes, if you if you and say you and me, Jared, we're running away from a black bear that's chasing us, I don't need to run faster than the bear, I just need to run faster than you. Right. And so I think a lot of people are just thinking that, oh, I need to be like going 50 miles an hour away from that bear. Uh but the reality is we can do a lot of stuff with without having the the latest and greatest. And particularly but but and but particularly because of you know we are dealing with technology, like you were saying, that I think that line is starting to get slowly blurred. It and really we're not we'll be able to do the same amount of work that we need without having to have the quote best.
SPEAKER_02Yeah, I think that's probably it might even be a good transition into talking about the the business opportunity because I think there's a similar you know analogy to be made there where you know say you're uh I don't know uh say you're uh an LED manufacturer in the United States and you're importing LED chips and drivers and then assembling them into a final product in the United States, you've got a lot of competition in the United States. I can I mean I we we buy directly from at least half a dozen different LED manufacturers, you know, uh at my the company I work for with South Point Solutions. So I know there's a a great deal of competition, and so perhaps a way for you know one of those companies to you know run away from the bear a little bit faster than one of their competitor companies would be to perhaps move their operations to the CNMI, eliminate some taxes, some tariff costs, and then you know, per per potentially be able to lower their costs. You know, we're seeing we're seeing uh basically every single uh product provider that we buy from, prices have been going up steadily, you know, starting in COVID years but continuing since then and then accelerating this year with with all the the tariffs that have been taking place. So um I guess you know, like I said, I think that's a good transition for us into starting to talk about you know what how say a business owner or you know, even an upper-level management person hears this and is curious about you know how would this actually work for us to take advantage of you know the covenant uh uh status that the CNMI has with the federal government in Washington, D.C. Maybe just kind of start going in that direction, if you would, and you know we'll interrupt with questions.
SPEAKER_01Yeah. So the big thing, so there are two ways we can look at this. Uh we can look at this from the physical product side and the digital side. Let me start with the physical products since I think that is the most relevant when it comes to tariffs. So as of right now, if you're a Chinese manufacturer, let's say that you uh you're a company and you sell shoes. We'll use shoes as the example. And you're pro and you're selling products, and so you have this manufacturer company that you get your shoes from in China, they make the shoes there. And then they ship the shoes via a shipping container to uh uh a port in, say, Washington State, like a port in Seattle. Let's use that for example. They'll have to pay a tariff for that for those shoes. And that tariff it was 30%. I think last I saw it was a hundred percent. And uh and so right now what we see is that the percentages go up and down left and right. And so there's a lot of uncertainty when it comes to that. But what the what the CNMI offers is kind of a escape from those tariffs. So the way that could work is that if you could take the raw goods of those sandals or shoes, for example, and ship them to the Northern Mariana Islands, and you can assemble them there with at least 30% of the total cost being done in the Northern Mariana Islands. After those sandals are assembled there, they can go back to that port from the CNMI, they can ship to that port in Washington State in Seattle. And not only would it be excluded from the Jones Act, so you could actually ship it on, say, a Chinese ship, for example, to Seattle, you'd also be able to avoid the tariffs. So you would not pay any extra in tariffs. So not only do you get that savings from, say, the raw goods and building the product in the CNMI, you can also escape the Jones Act problems, too. So you already get two savings right off the boat, uh, no pun intended, by going that route. And so that's really the the biggest, that's one of the biggest advantages that the CNI has offered any company that is creating products abroad and shipping them into the United States. And now there are some companies that are trying to get around this. I know that there were a lot of companies in China, they were trying to reroute their products through, say, Vietnam. And then from Vietnam, because Vietnam had only 20% tariffs compared to, say, China's 20 per uh 30% tariffs, they were gonna go from China to Vietnam, put it on a different shipping container, and then send it to the United States. Uh, the problem with that is that if they do get caught, uh, those tariffs go up majorly. And it also because uh it's also gonna cause governmental legal trouble for the party, so say in this example, Vietnam, Vietnamese government for doing this. But with the CMI, because it's permitted, because again, we are outside, because of that unique relation with the covenant, not only are we outside of the U.S. customs, what I just described to you of how you could take raw materials, send them to Saipan, build up the sandal or shoe, and then ship it to the mainland U.S., that is totally legal and allowed. And there's actually a history of this within the CNMI that was done mainly through the 80s up until around 2008, where a lot of clothing that was made, uh the the the CNMI was a major clothing hub for brands like Polo, Tommy Hilfigure, etc., to where products were made there, and then eventually they were shipped to the mainland.
SPEAKER_02And so Polo and Tommy Hilfiger, they were bringing in raw fabric from you know wherever probably China.
SPEAKER_01Yeah, they bring in raw fabric from China. We had warehouses in the CNMI where labor was made, where they would make the sh make the shirts, and then from there they would ship them to the mainland US.
SPEAKER_02Okay. So I guess that leads to the question of you know, what does the labor force look like in the CNMI? And you know, what uh what potential challenges might there be? Say there is a company in the US that's uh you know, again, interested in what you're saying and and what Saipan team uh is is proposing and wants to move their or at least you know take advantage of that and and you know put, like you said, 30% of their cost of production into the CNMI? There's obviously you can't just ship it into the CNMI and take it out of one box and put it into another box and then say that's 30% of our cost. Um so there has to be some kind of value add or actual assembly done in CNMI. Um so how would that work for for you know for a company that's say they need, I don't know, fifty fifty laborers to to do the work that they're talking about. Um you know, how what does that look like?
SPEAKER_01So being uh being a U.S. territory, we have a couple advantages. Uh the big three and when it comes to the labor force is so it's a U.S. territory, so Americans that are based in the mainland US, they can move there without a visa and without any extra paperworks or filings. I mean, so my story is uh the perfect example of this. I just grabbed my stuff, I well, I I grabbed as much as I could put in two uh two check bags and yeah, I just and I just got on a plane and went there. I I don't need to go into the nuances of a plane ride, but basically when I arrived, I had already been in touch with somebody with regards to renting out their home. And so when I got there, the home was already furnished, and I just dropped my stuff stuff off and I was good to go. I just needed to go rent a car until I actually got a car for myself. And that that's pretty uh that's a pretty um uh and that's pretty quick. You know, I didn't need to file paperwork with immigration, I didn't need to apply for a visa as a U.S. citizen because it's a U.S. territory, I just go there and that's that.
SPEAKER_02Do you have to go get a new uh do you have to go get a new CNMI driver's license?
SPEAKER_01Yeah, but I mean that's the same case for any other state from the state. If I move from North Carolina to Florida, if I'm over there, if I'm there for over thirty days, you need to get a a local license. Okay. And but that's pretty I say that's pretty standard within the US.
SPEAKER_02So it's essentially it's it's very similar to just moving from state to state within you know the the mainland US. Exactly.
SPEAKER_01Except without real ID there, so I mean it's all at this point it's all compliant with regards to that too.
SPEAKER_02Fascinating. So you're saying that that I guess you you said there were three aspects of the labor force question. So that's one aspect is that Americans can move there very easily.
SPEAKER_01Yeah. Okay. I mean, it's it's basically like you said, it's like moving to another state. Uh you just go there, uh, you got you drop off, and yeah, you you don't need to get anything, anything else. If you're going to be working for another manufacturer, you don't get any, you don't need anything else. You just go to go to work, and that manufacturer, you know, they take care of the paperwork. And but that's a little, we can we can talk more about that later. But as far as labor goes, you can bring in Americans. We have a special visa there that is that is exclusive to the Northern Mariana Islands called the CW1 visa. And what this allows is that if your company needs low-cost labor, we can have people in from the Philippines, Bangladesh, wherever we can get you laborers for your factory uh buildup. That and that generally takes about a month. And so within one month, we can have you 30, 40, 50 people. The the population of the island is pretty small, so it's about 45,000 people, give or take, and I'd say half of those people are working. And so you're looking at $20,000 to $20,000, uh $20,000, $20,000 people. So you could uh potentially pull from the current labor force that's there right now, or you could take advantage of this CW1 visa. And then the the final labor option is the H1B. Now, compared to the uh H1B standards that are in the federal government or on the mainland, where there's a cap, you can you don't tech you we don't have any caps for H1Bs in the CNMI. So if you say had operations for talking about LED lighting, say that you're say that depending on how specialized that is, if you needed people who are very skilled to come to the CNMI to do this work, all you would need to do was just is excuse me, all you need to do is just bring them over with an H1B, and you can have as many H1Bs stay as you need. And also, if you are an H1B in the Northern Mariana Islands, that does allow you to access the rest of the United States for travel purposes. So it'd say that you wanted to go on vacation with your family and you want to go to Disneyland in California, you could take a week off and fly to California, and they would they would and if they saw your H1B, you'd be totally fine.
SPEAKER_02Interesting. So those two visas, those would be for non-American uh people moving into the CNMI, you're saying?
SPEAKER_01Correct. Yeah, so the CW1 is a low-cost or is a low-skill labor visa. So if you need like so, like a lot of the people that poor concrete or do construction work, they would be part of that CW1. If you had something that was a little more technical, say like data analytics, uh, there was one gentleman I spoke with, he was in toy manufacturing, and you know, they had these special positions called action figure engineers, where they use 3D printing to create certain rivets or designs for for their action figures. That could be more of an H1B type of position there.
SPEAKER_02Okay.
SPEAKER_01Because it's a little more skilled.
SPEAKER_02Interesting. And as uh so you mentioned that you know back in the 80s with with Polo and Tommy Hill figure, there were warehouses and manufacturing facilities. So the it sounds like there's a lot of infrastructure kind of already in place, you know, ready ready to go.
SPEAKER_01There is some infrastructure there. Some of it has been torn down. So the manufacturing element of the Northern Mariana Islands happened between the 1980s and it ended around 2009. That's when the last factory shut down. Uh, from 2009 onward, they transitioned their economy from manufacturing to tourism. Uh, particularly uh at that time, they had three direct flights from China into the CMMI. So they were really leveraging the rising middle class that was happening in China at that time. And so they were getting tourists from Japan, South Korea, China, and and Hong Kong. Those were their major tourism markets. Uh but during that time, uh, some of those manufacturers were torn down, and some of them have just kind of stuck around. So if someone wanted to leverage those warehouses, they would need to be refurbished to some extent. And depending on what you do, uh, you know, uh, that would also ultimately depend on what your needs and desires would be for what you'd be manufacturing there.
SPEAKER_02So um I guess that leads to two questions for me. Um so is today uh is is the uh is the CNMI's um economy today still largely based around tourism?
SPEAKER_01Yes, yeah, that is still their main focus. Uh granted, tourism of what it is today is not the same as tourism what it was 10 years ago. So in 2015. So a lot of so a lot of changes have happened. So for instance, Japan's economy has not been very good. And so we've definitely had a major loss of Japanese tourism. And so South Korea, I believe, is their major there's their biggest tourism market. And uh South Korea has also tilted on having a kind of economy, you know, so some of it's up, some of it's down, and so that's not as good as it used to be. And because of the tensions between the United States and China, uh there are no direct flights into China anymore from the CNMI. So the major so like as I mentioned earlier, the major flight routes out of the CNMI is going to be South Korea, Japan, and Hong Kong.
SPEAKER_02Huh. So I guess is that what uh is is is Saipan and the CNMI is with with the Saipan team, are they trying are they they're recognizing that their uh their their revenue from tourism perhaps is declining? Are they trying to are they trying to transition back into more industrial is it more of an industrialized economy?
SPEAKER_01For sure, yeah. And that's what we're trying to help get the word out. The because, you know, the regular because yeah, you know, the regular tourism has not been very good for them, uh, particularly in the last five years, ever since COVID. So that has just been like a big shot to them. They are trying to re- trying to spread the word out with regards to being a industrial power, or not an industrial power, excuse me, to be an industrial option for for some companies. You know, and basically one of the things that helps this is the tariff. You know, and prior to uh the prior to the announcement of new tariffs from the Trump administration, the CNMI's biggest advantage were its local taxes. And we can talk more about that uh later. But now with the conversation of tariffs in the now with tariffs being talked about, because again, you know, we are outside the CNMI is outside of federal customs, and so we can offer companies, you know, you don't have to pay like a 30, 40, 100 percent tariff anymore if you want to sell your goods in the United States. We offer something at a much lower rate. And uh they also, if you work with the local government, one of the benefits of living in a community that's very small, you can make it's easy to make um, you know, it's easy to meet the local uh political figures like the governor, the local congressional folks, and make deals with them about what kind of tax advantages you can get if you set up your business there. Because ultimately it not only doesn't help that business, it helps the local population too. Because if you're creating jobs, say in LED manufacturing, they might you might be able to delegate some of this work to to locals there and giving them jobs.
SPEAKER_02Yeah. Um yeah, let's let's talk about the the tax the tax differences then, because obviously, you know, businesses um finding a workaround with all of these tariff costs is a big deal. Is there is there any benefit from kind of an individual standpoint for as far as like income taxes go, or is it the same structure uh that that you would find in the U.S. or is it different?
SPEAKER_01So the way it works is that if you live in a U.S. territory, I know that Puerto Rico and Guam are probably the best examples I can think of this. American Samoa is going to be a little different, and so is the U.S. Virgin Islands. But speaking specifically about the Northern Mariana Islands, if you live in the Northern Mariana Islands, you have to you do not have to pay a federal income tax. You pay one tax, and that is a local income tax. It's a CNMI tax. We we even have our own special tax form. It's called a 1040 CW, which is exclusively, or it's 1040 CM. I can't remember which one it was, but we have a special tax form. Here in the CNI, which is exclusive to the CNMI. And in the covenant, so let me back up a bit. So in places like Guam or Puerto Rico, even though you're only paying one tax, the tax structure, the percentages of what you would pay in taxes, is still a progressive income tax. And it's the same, and the same numbers that you would pay for the federal government are is the same rates as you'd pay in, say, if you lived in Puerto Rico or if you lived in Guam. For the C and MI, it's a little different. As per their covenant, the covenant grants the C and MI, even though they have to abide by the rules of the IRS, they are allowed to uh to restructure the tax rates differently. And so that's what they've done. They've basically done two things to incentivize business there. The first one is that your tax rate for an individual will cap out at 9% above $50,000. So for instance, if you made a six-figure salary in the Northern Maryland Islands, your tax rate would be at nine percent. Versus if you made a six-figure salary in, say, North Carolina, your tax rate would be twenty-two percent.
SPEAKER_03Yeah.
SPEAKER_01And so you're dealing, you're looking at a 13% difference there just for those figures. And now this is not including any write-offs or anything else. This is just strictly like straight-up taxes. So that's the first big tax thing that the CNMI offers. Then the second thing they offer is something called a rebate. And in that covenant, they are allowed to, the local government is allowed to apply a rebate to people to the locals, uh, to local residents there. And the rebate has three stages. So if you make less than $20,000 on your local income, you will get 90% of that back via a rebate after you pay taxes. If you make less than $100,000, you will get 70% of that back in a local rebate. 70% of your taxes that you pay back. Correct. Yeah. And so if you and if you pay more than $100,000, you will get 50% of that back as a local rebate. Now keep in mind this is all income. So let's say that you make 50% let's say that you make uh like a hundred like six figures, you would be paying the nine percent. However, that so let's say that you pay nine percent on 100k, because of that rebate, which would be 50% back, you your effective tack local income tax rebate for a resident of the CMMI would be 4.5%.
SPEAKER_02Wow, that's a lot better than what I'm paying currently.
SPEAKER_01And and just as an aside, if you set up a corporation here, the corporate tax here is going to be the same as the corporate tax on the mainland, because it again it follows that IRS structure. However, those rebates also apply to your corporation. So if your corporate tax is say $100,000, you'd pay, you could get 50% of that knocked off. So instead of paying a 21% tax, you end up only paying a 10.5% corporate tax, which is very competitive, by the way, when it compares to other places, like say, I know that Ireland, for example, was a very popular place for corporations to incorporate because they had low in corporate taxes. But with the CNMI, with getting that rebate back, that puts them very much on par or very close to what you'd pay in Ireland without having to deal with the other EU stuff. Because again, the CNMI is a part of the US. So you're still looking at you're not deal when you go to say when you go to a court of law in Ireland, you'd be dealing with a judge and a wig. In the Northern Mariana Islands, you're dealing with various uh I think it's like Supreme Court districts or certain judge districts, but basically it's all within the American framework.
SPEAKER_02Instead of in a wig, they're in a robe.
SPEAKER_01There you go. Something like that. But basically, it but it wouldn't be foreign to you as an American business owner.
SPEAKER_02Sure, it'd be the same same judicial system.
SPEAKER_01Same same same legal system. Exactly. Okay. Now obviously they're going to be local laws, just like every state or every town is going to have its own local laws. But the the primary spot is going to be from a US framework. And so and and again, you know, this is just for local individuals. So like let's say that you do a sole proprietorship or an LLC and you want to be taxed as an individual, like a pass-through, you'd only pay 9% on your income, and then you'd still get that rebate.
SPEAKER_02Yeah, so I guess that's the other aspect. Uh, because you we've been talking a lot about, you know, like companies moving there and creating physical products, but it sounds like there's also an opportunity for individuals to move there and just, you know, whether they have a startup that they're working on, or they're uh solely um their job is totally uh internet-based or they create digital products, things like that. So I you know, feel free. That's not really formed in the in the shape of a question, but um, I guess is that is that another aspect of what Saipan team is trying to promote?
SPEAKER_01Absolutely, yeah. So we have the physical aspect of companies moving over here. Now, granted, that is a big ass because there's a lot of moving parts with you know re-establishing a warehouse here. But for the digital side, if you own any kind of consulting business or if you make digital products, you know, I work in advertising. If you are a graphic designer, uh, you know, let's say that or you're an accountant or you're a lawyer that does a lot has a lot of clients that you talk with via digitally, the opportunity here uh that passes on to you. So you could easily do the same thing where your income tax is significantly lower, and you also, you know, so you get that benefit as well. So you have a lower income tax because you have the uh the rebates and they come back to you. And the infrastructure for that is like we were discussing earlier with regards to the internet. The internet is for the most part pretty solid. It'll tolerate a Zoom call, it will tolerate uh you can do uploads, you can do downloads. It's not going to be as fast as some spots in the uh in the on the mainland. But as far as getting the work done, you still get all those benefits.
SPEAKER_0212 months from now, when you guys have Google Fib, then there's another option that people can can look at for internet connection, um, which might improve things there. You know, not like you say, not that it's bad, but that you know that it might get closer to the level of what people are used to. Um and honestly, it sounds like in most cases, unless somebody is really trying to, you know, just use all the memory in their computer um at one that uh that the the internet on Saipan is more than adequate for for what you know 99% of people would need it to do.
SPEAKER_01Absolutely.
SPEAKER_02Tell me a little bit about um you know the the climate and the the geography and you know just what it looks like there.
SPEAKER_01Obviously it's it's a it's an island, but so with regards to the climate, the climate is because of the latitude that we live at, the climate is relatively the same. If you've ever been to places like, say, the Philippines or Southeast Asia or maybe even Central America, we're gonna have a similar climate to where it's kind of the um you still have uh you're gonna have a lot of humidity, and you're generally not gonna expect the temperatures to drop below a certain rate. Actually, uh the CNMI, particularly Saipan, has won over the last 10 years, they've won the most consistent weather in the world via the Guinness Book of World War. So the expectation is about 75 to 88 every day with a humidity of 60 to 80 percent. So I mean, if you go outside, you're gonna sweat. I mean, there's no doubt about that. The but the thing is, you know, you don't really have to expect it to drop, you know, you're not gonna expect these major drops in temperature. Now, if it rains, that normally does drop things, or if it gets a little windy, that normally does cool things down. But for the most part, uh, you know, wearing pants because you're cold is not going to be really a thing anymore.
SPEAKER_03Yeah.
SPEAKER_01And wearing shoes because you're cold or your toes are cold is not a thing gonna be a thing anymore.
SPEAKER_02Um and what uh does it rain a lot? Do you get hit with typhoons or things like that? What happened?
SPEAKER_01We do get hit with typhoons, which is kind of the equivalent of the hurricane year. Uh they do happen. Uh, there was a major one back in 2018 that knocked off or knocked out a pretty good chunk of the island. And so they were able to get power back within a few days, but generally speaking, the power was uh there were some parts of the island that didn't have electricity for months. And so that was that was pretty rough. I mean, I think even the governor at that time, he had sent uh he had requested help from FEMA and President Trump, uh Trump during his first term to get support, and they they got it. And so they were able to build build back. Uh, since then, a lot of people have wised up to the power of solar. And solar is a really popular item here on the scene.
SPEAKER_02Okay.
SPEAKER_01So solar is pretty, yeah. So for a lot of folks, they uh in fact, some people have just gone completely off grid. And they we have about 12 to 14 hours of sunshine a day. And like I had mentioned earlier, if we don't really, we only have two seasons, dry and wet. And so you're not gonna have the four seasons that you would expect in, say, North Carolina, but you are going to have a substantial amount of sunshine. And, you know, talking with some people that have set up solar for their homes, the way it works is that they'll get one of these solar ACs. They'll let the solar AC just cool off whatever area that AC is in in the house for like 10, 12 hours, and then the energy that the solar panels are able to collect, they store them in a battery, and they have other ACs that run off those that battery power for the nighttime, so they have AC running at night.
SPEAKER_02Fascinating. Uh so you say the the dry season and the rainy season, or I guess not rainy season, but wet season. Is is the wet season I mean, is is it would it be um would it be wrong to say that it that would be kind of like the rainy season? Does it rain a lot? Is there a lot of clouds during the the because I'm curious?
SPEAKER_01There was a time where I think I remember it rained because I because I had my dog with me and I was just trying to find the best time to take her out because she didn't want to go outside in the rain. But there were times where like it would rain for three or four days regularly.
SPEAKER_02And I wonder how much that affects that affects the solar the solar aspect.
SPEAKER_01That part I can't speak to because I don't have solar uh on the place that I stay. But I do know that what a lot of people do is they set up this kind of 70-30 connection. So where 70% of the electricity they have they generate themselves from solar, and then they're connected to the grid for 30%. That makes sense. So when the solar can't compensate, they do that. Now, another thing about the island that makes it a little more unique in its geographical location is that we get a decent amount of wind here. And the wind is pretty consistent. And they have, from what I understand, they've been pretty good strides with regards to wind turbines generating energy. And the cool thing about the wind turbines in certain areas of the island is that when the sun goes down, the wind picks up. And so if you have a turbine that's just running, it can gather some of the electricity to continue powering up the lithium batteries.
SPEAKER_02Yeah, I uh, you know, being someone who's been in this is kind of taking our conversation a totally different direction. So um Yeah, I guess I'll even skip that thought. You know, I was gonna start talking about the the pros and cons of solar and wind power, but I think that's a conversation for another day. Um I don't I guess just real quick is that uh you know I don't think it is viable for kind of like grid level power supply, but like individual power supply to make up for you know maybe power outages or you know, after a typhoon hits and not having access to power for days or even weeks at a time, um, or being, you know, like my my mother-in-law in Kenya, she lives in a place where the electrical grid doesn't exist, you know, so the only option she has for power is either a uh uh uh you know fossil fuel powered generator or solar power solar panels. And um yeah, there's bro pros and cons to both of those. But during the rainy season, they they definitely have a rainy season as opposed to a wet season in Kenya. It's very overcast. It rains almost every day, and the solar panel, the solar panels that she has on her roof don't produce nearly the same amount of power during the rainy season as it does during the you know dry season. Um anyways, um we're we're kind of getting to you know to an hour here, so I don't want to take it too much longer than that, but I do think that it's worth repeating and emphasizing the financial benefits that are just from you know our conversation today, seemingly enormous that lie within the CNMI. So being able to pay zero tariffs on anything imported from the CNMI to mainland US is amazing, especially in you know the climate that we're in in 2025. And then you know, just the the the corporate and individual tax rates of being you know four and a half percent as a as a top rate compared to you know a top rate in the in in the mainland, you know, if you get up into you know mid-six figures, you're paying close to 50%, if not 50% in taxes. So I mean I think uh I think it should be very eye-opening. I think it should be something that people investigate further and at least maybe reach out to Saipan team and ask some more questions. Um so I'll leave it to you. You know, feel feel free to wrap us up however you'd like. If there's any contact uh or websites or you know, other other sources of information that you would want to direct people to, or if there's any other um topic that we we didn't hit that that you think is pertinent to our conversation, you know, the the floor is yours.
SPEAKER_01Sure. Yeah, so yeah, so to reader for physical manufacturers, you have the benefit of no tariffs. You have low corporate rate, corporate tax rates. If you're just setting up something like an LLC, uh those rates obviously are very low. They cap out at 50% over 9,000 for the income. We do have rebates that people that companies and individuals can leverage too. And also something else I did not mention is that because the CNMI is a U.S. territory, if say that you're doing furniture manufacturing and you have a bunch of raw parts that are shipped to the CNMI, you could develop that furniture there, and then when it arrives on U.S. mainland shores, you can say with all honesty that the product and you can get the special label in for assembled in the United States. Now, obviously the product, the the products like the um the raw goods to make that furniture would be coming from, say, outside of the United States, but you can also get the benefit of saying it was assembled in the US too. And so with more and more, with the tariffs creating more opportunities for local businesses abroad to say made in the US, assembled in the US also would have a very high status compared to some other products with, say, like made in Indonesia or China or Mongolia, whatever. You know, the uh the status of being made in America, that's a status that you could leverage by having your products made there in that US territory. So for physical manufacturers, there's a lot there that's offered. Uh, there are some also some other local tax advantages. Now, this goes a little higher because you got to get permission from the local legislature and the governor to sign off on it, but they have some tax abatement programs to where you could pay essentially as low as 1% local income tax for 20 years. Wow. For your for your corporation. And so it really offers a lot of people who are looking at long-term things and the all and everything that's happening. I know there are some people that are talking with regards to the tariffs, saying that, oh, you know, this will be done once Trump's term is done. But what we're seeing already is that so China was one example is that China was trying to go through Mexico to avoid the tariffs, but even Mexico has decided to put on higher tariffs as much as 50% on Chinese goods. And so, you know, basically I think this conversation of tariffs is going to go on way longer than what we're seeing within this administration. I think it it's certainly uh going to it's going to be a topic of c discussion much later on. And with this being here to stay, I think it's important. And most businesses do this anyway. They look at like a five-year, 10-year forecast. And so for businesses that are looking at long-term, this should certainly be an option to consider. And that's for the physical side. The um the digital side, uh, for someone like myself, you know, there's not really a lot of setup here. The internet as is, as of October 20th, 2025, it's pretty good for most it'll handle your Zoom call. You can upload your Word documents, you can upload your videos, you can upload your graphics. I mean, this will cover all of those things. I mean, if you are a streamer, uh there is actually one company, it's a gaming company. They're trying to open up a gaming foundation here to where they can have people who play games like Madden or FIFA full-time to relocate here and to lower their own tax burden. And so that that'll be a much better option. I think you can do that now, uh, but by next year you'll be able to do it super fast.
unknownYeah.
SPEAKER_02Amazing.
SPEAKER_01But yeah, for the and so for the digital opportunities, uh, that that is also here. And I mean, that's something you could take advantage of right now. You just come here, you set up, you file your your business, and yeah, you're off to the races. And so uh what we do at Scipan team is we help these businesses set up. So if you got questions about setting up your LLC or your sole proprietorship or getting your business license here, we take care of all that for you. We also also offer other services. We can connect you with a realtor to find you a place to stay. We can connect you with people if you need to rent a car, if you want to buy a car. And we take care of a lot of the smaller stuff. So when you do decide to come here, uh we'll pick you up from the airport. Uh, we make the the landing here as smooth as possible. And y so by the time if you're a business and you want to get set up, we connect you with all the right connections to make this, yeah, to make this landing as smooth as possible.
SPEAKER_02Yeah, that's super cool. I mean, and even what you kind of uh it was almost kind of a surprise nugget there that you tossed in right at the end that you know, even though the the tax rates are what they're posted at, that if you're coming in with you know a business and you're planning on hiring, you know, say 20, 30 people or something like that, then there's room for negotiation even with like the local governor to say, hey, I'm doing this, what you know, can you do anything better for me? That's that's fascinating. I mean, um, it almost makes me want to uh you know get on a plane and and head over there and and figure out a way to take advantage of that myself. Um very fascinating. I hope people will reach out to you as a result of this uh this podcast. I've told you before, I don't get a ton of downloads, but it does um it does reach. And uh, you know, if you if you push it out to your um your network as well, then you know it it's uh we can see where it goes. Um absolutely.
SPEAKER_01And so if folks want to contact me, uh you know, the website is scipan.team. Uh Saipan is spelled S-A-I-P-A-N and then dot and team T-E-A-M. And they can find out a little more information. It's a very basic website. We do have a contact form, and you also have the option to contact uh you know me or my business partner uh where you can where you can schedule a Zoom call and we can get more into the specifics of what it is that how we can help your team if this is something that you're interested in doing. Because you know, right now we're hitting a lot of the surface of the stuff, but obviously companies are gonna have very specific questions, particularly if they're gonna make an investment like this. Or even people that work digitally might have an might have a lot of questions about this place and see if it's a good spot for them or their family. And we can take all those questions on call.
SPEAKER_02Fantastic. Yeah, I will link to um that website in the show notes of this uh episode, as well as anything else that you would want me to link to, William. Um but this has been a fascinating conversation. I really appreciate your time today. We've gone a little bit longer than than we normally do, but I think it was well worth well worth every minute. So um thank you, William. I appreciate your time today.
SPEAKER_01Oh, awesome talk. Thank you, Jared. I appreciate it.
SPEAKER_02All right. Thanks as always for tuning in. If you're anything like me, you probably didn't even know that there was a Commonwealth of the Northern Mariana Islands, much less that it's a territory of the United States with major tax and tariff advantages for entrepreneurs, manufacturers, and digital nomads. Definitely reach out to William and his SciPan team to learn more if your interest has at all been piqued by this conversation. Uh I'm still working on booking my next interview guest, but in the meantime, if you're trying to make your company more profitable, feel free to reach out to me to get some expert advice on the best ways to do that via both LED lighting and real time energy monitoring. Anyways, thank you again for listening, and until next time, keep observing best practices.