Seasteads: Self-Isolation For The Ultra Wealthy
Seasteading communities are gaining traction with Silicon Valley's elite, but their viability remains questionable.
In a palm-fringed, sunny bay in Panama, a revolution is taking place. This is the location of the first SeaPod manufacturing facility, where around 30 single family SeaPods are being pieced together from 3D-printed molds and lifted onto their foundations just over a kilometre from the shoreline.
The plan is that these will be self-sufficient homes that power themselves, produce their own hydroponic food and electricity, handle their own wastewater treatment, and even be fitted with an underwater coral nursery to support marine life. Air and water drones will courier trash, recycling, packages, food delivery and emergency medical support like defibrillators and medicine.
This is not science-fiction. If all goes ahead, by late Fall this year, Linton Bay Marina in Panama will house the first residential seasteading community in the world.
Seasteading, the concept of creating permanent dwellings at sea outside the territory claimed by any government, is not new, but some examples more credible than others. For instance, in the 1960's the founder of The Church of Scientology based much of the group's executive leadership on seasteads, before moving them back to land in the 1970's. In his 1992 book The Millennial Project; Colonizing the Galaxy in Eight Easy Steps, Marshall Savage discussed building tethered artificial islands.
But recently the concept has gained traction with a more serious school of thought. In April 2019, the concept of floating cities as a way to cope with rising oceans was included in a presentation by the United Nations program UN-Habitat. In addition, a Dutch pro-choice non-profit named Women on Waves uses seasteading as a way to circumnavigate abortion laws, using a commissioned ship that contains a specially constructed mobile clinic, the A-Portable. When WoW visits a country, women make appointments for an abortion or other reproductive health service, and are taken on board the ship. The ship then sails out approximately 12 miles to international waters where Dutch laws are in effect on board ships registered in the Netherlands.
This particular seastead in Panama is the brainchild of Ocean Builders, a company co-founded by Silicon Valley bitcoin entrepreneur Chad Elwartowski, former Navy aeronautical engineer Rüdiger Koch and software developer Grant Romundt. This is not the first attempt at creating a long-term residential community. It came close, last year, when Elwartowski and his partner Supranee Thepdet moved into the first floating, octagonal seastead 12 miles off the coast of Phuket, Thailand.
They lived there for around two months, but after a video of them drinking champagne and inviting others to "join their ocean community" was published online, the Royal Thai Navy sent out a crew to remove their seastead as "a threat to Thai sovereignty". Elwartowski and his partner had already fled after a tip-off from a friend.
Two years prior, a floating island building company called Blue Frontiers, had signed a memorandum of understanding with French Polynesia to create the first semi-autonomous "seazone" for a prototype in 2017, not least on the grounds of fast-rising sea-levels as a potential life-line to hedge against global warming. But the project was later shelved indefinitely after local protests.
This time, in Panama, they have the full support of the government, says Ocean Builders CEO Grant Romundt, over a Zoom call. "We will be working closely with Panama to identify any legal matters related to our floating homes. We wish to pursue a flagging system so that owners of the homes can hold a title and claim ownership of their new home fully backed by the legal system of Panama."
An advertisement on the Ocean Builders website is recruiting people to join the growing community, “entrepreneurs, aquapreneurs, technology enthusiasts, electronics hackers, marine biologists and other people that are passionate about developing new products and services that a city on the ocean would need.”
The 3D printer they are using to create the molds for the homes is huge, 20 feet by 16 feet, to build details down to the millimeter. The current pod design is engineered for 5 meter waves as the pods float about 2.5 meters above the waves, similar to an oil rig. The design for the SeaPods came from Dutch architect Koen Olthuis of Water Studio, an established designer of floating homes.
"We really don't feel waves like a normal boat would which is floating in the turbulent surface of the water, and when we go further out to sea we can scale our designs to withstand larger waves," says Romundt. Ocean Builders is working towards 3D printing the entire floating home which may take years of research and development. In the meantime, SeaPods are molded from 3D printed molds in a combination of plastic and foam and then covered with fiberglass. The Pods have an outer shell made of a white gel coat. On the interior, owners can choose between gel coat or a Corian artificial stone surface from Dupont.
During the first phase of sales, according to Romundt, the primary focus will be on tourism and businesses, through 'SeaBnBs', time shares and rentals. "We want as many people to experience our new homes as possible," he adds.
Every land-based country has their own rules on how long they consider a person needs to be in their country to be deemed a resident of their country, either for legal, tax, health insurance or other purposes. But seasteading countries would be free of that obligation, said Romundt. "There is no requirement for how long someone would need to live on a seastead to be deemed a resident of that community."
To be considered as a country, a seasteading community would likely fly a maritime flag of a country similar to how boats are flagged under a country. This would give them some legal protections as they would theoretically be seen as a part of the country they are flagged under, explained Romundt. To be completely outside of a governments' jurisdiction a seasteading community would need to be 200 miles from land.
According to the non-profit think tank, the Seasteading Institute, many seasteading proponents are fed up with their country's outdated laws and welcome the idea to rewrite the rulebook for the 21st Century.
"The challenge with old governments is that obsolete laws don’t go away as fast as new laws are created. For instance, a law that all horses on the highway must wear sleigh bells was not repealed in New Jersey until 2017," said President of the Seasteading Institute, Joe Quirk.
"We need legal systems to evolve as rapidly as the cultures and technologies they govern, and Seasteading is a technology to accelerate the process by which smart laws are developed and dumb laws are deleted. Special Economic Zones are areas within existing countries that are given unique regulatory systems to increase prosperity. Think of them as legal islands created on land. There are more than 4000 around the world, including more than 250 in the US," he added.
Tom W. Bell, a professor of law at Chapman University, wrote a book proposing a new kind of Special Economic Zone known as a SeaZone, which will take the lessons learned from land-based zones and apply them in a floating zone. He said in the book, "Governments across the globe have begun evolving from lumbering bureaucracies into smaller, more agile special jurisdictions - common-interest developments, special economic zones, and proprietary cites. Private providers increasingly deliver services that political authorities formerly monopolized, inspiring greater competition and efficiency, to the satisfaction of citizens-qua-consumers. These trends suggest that new networks of special jurisdictions will soon surpass nation states in the same way that networked computers replaced mainframes."
While this is all good in an ideal, libertarian world, argues Emma Lindsay, a New York-based partner at international law firm Withers, escaping the nation state is difficult, even on the high seas, and in fact the laws of several countries could apply.
She adds: "Individuals are subject to the laws of their state(s) of nationality no matter where they are. While not all of a state’s laws apply outside its territory, many do. The laws of the flag state of the seastead also apply. All seagoing vessels are registered or licensed in a flag state which is deemed the nationality of the vessel. Panama is the world’s largest flag state by far. Seasteaders also could be subject to the laws of any state that is harmed by their activities at sea, such as by pollution of surrounding waters. The current negotiation of a new UN treaty on conservation and sustainable use of the high seas has increased attention globally on this issue."
Withers is advising High Seas Alliance in its advocacy with states and other stakeholders negotiating the new treaty in New York.
Life In A Tax Haven
The homes in Panama will be located in an anchorage close to a marina in calm, protected waters, as part of a trial run for a community further away in future. This allows for getting accustomed to living on the water while still being able to travel on land having easy access to groceries, supplies and the airport. Each home will be fitted with solar panels, a water filtration system and hydroponic farming to aim for as much self-sufficiency as possible.
One reason for trialling the concept in Panama is that it is a pure tax haven, meaning that it imposes no income, corporate, capital gains, or estate taxes on offshore entities that only engage in business outside of the jurisdiction. It also has strict banking secrecy laws designed to protect the privacy of account holders. So the seastead in Panama, whilst not being its own country, will function as a close approximation for how life on a fully-fledged seastead would be.
Panama's association with avoiding tax and disclosures is practically synonymous after the Panama Papers scandal which erupted in 2016, revealing the data of millions of private records from Mossack Fonseca, a Panamian law firm and corporate service provider. The papers raised questions as to where politicians got the millions of dollars they deposited in offshore accounts, and whether account holders were evading taxes.
But seasteads are not just aimed at tax evaders, says Tom W. Bell in an emailed interview. Rather, he sees it as a new stream of real estate development. High income individuals can already escape income taxes by living aboard a yacht flagged in the Bahamas, the Cayman Islands, or Vanuatu, all of which offer open registries (meaning you do not have to be a citizen to flag your vessel there) and none of which impose personal or corporate income taxes, he points out.
"Seasteading as yet offers nothing more, legally speaking, though when up and running it will offer lower costs," he explains. "Because they sail around risking collisions, yachts have to have lots of expensive equipment and trained operators. A seastead, because it sits in one place, can do without those costly features. Indeed, in some waters, a seastead might take the form of a simple barge offering a flat surface for modular housing. This offers the prospect of billionaire-grade income protection with a middle class price tag," he adds.
"Seasteading is not so much as an exciting new way for UHNW to escape taxes, as an exciting new way to make money. Imagine the profits to be had by creating new ocean front 'sea estate' (an upgrade on static 'real estate') than escapes income taxes and can move from paradise to paradise! Regardless of whether old school billionaires get on board, new ones will result."
Seasteading has indeed become popular amongst a group of wealthy entrepreneurs, one such being PayPal billionaire Peter Thiel, who co-founded the Seasteading Institute with the first donation, 12 years ago. The Seasteading Institute's other founder was former Google executive, Patri Friedman. He recently published a book about Seasteading with author Joe Quirk, called Seasteading: How Floating Nations Will Restore the Environment, Enrich the Poor, Cure the Sick, and Liberate Humanity from Politicians.
Quirk at The Seasteading Institute said that "several 'seasteaders' are interested in buying SeaPods. One, in fact, committed to buying one for an underwater floating restaurant." Peter Thiel however, has not bought a SeaPod, according to Romundt, because "they are not quite up to billionaire standards," although he remains a loyal advocate for seasteading.
Peter Thiel gave his thoughts about seasteads recently in an interview with the Rubin Report: “They told me they had free speech on everything, but one thing you were not allowed to speak about was seasteading or starting new countries," he said. "And the reason you were not allowed to speak about them was that if you started, people wouldn’t want to speak about anything else.”
Thiel added that he was particularly excited about the biomedical opportunities through seasteading. “The specific thing that I would hope would come out of it would be more scientific and technological progress that’s too heavily regulated by the heavy hand of our existing state.”
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