The Benefits Of Living, Investing, And Planting Flags Overseas

Why Not Just Stay Put?

Sept. 29, 2014, Panama City, Panama: The big benefit of living and investing overseas is diversification, both of your assets and also of your life.

Dear Live and Invest Overseas Reader,

I was "onshore" in Nashville recently for our once-a-year Retire Overseas Conference. We arrived in the States on a Sunday afternoon. Once we'd cleared U.S. immigration in Houston, where my wife was singled out as she is now every time she crosses the U.S. border, for reasons no one with U.S. immigration seems to be able to explain, the experience of making our way to downtown Nashville was painless.

The truth is, the United States is one of the easiest places in the world to live and travel. You might begin to wonder: Why do anything offshore in the first place? Easier, surely, just to stay put.

Overregulation and poor government stewardship of the people's money are two reasons to consider voting with your feet and your finances and relocating yourself and your assets somewhere else.

However, I'd say that going offshore is better approached as an opportunity rather than an escape. Or, put another way, this isn't a political decision. It's a practical one.

In that context, what's the real advantage of the Five Flags ideas I report on?

Diversification. It's the key to success in all things, from personal happiness to a healthy portfolio. And you don't have to go physically offshore, not immediately and maybe not ever, to reap the benefits.

That said, having a residency permit that allows you to stay in another country indefinitely should you decide you'd like to can be a good idea even if you right now have no intention of moving yourself anywhere. A backup residency, as I think of it, keeps your options open down the line. Many countries allow you to obtain legal residency without having to be resident full-time or even most of the time to maintain your residency status.

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Giving Back To The Local Community

Community Connections

Sept. 28, 2014
Panama City, Panama

Dear Live and Invest Overseas Reader,

In Nicaragua a couple of weeks ago, Lief and I set out early Saturday morning to visit a development community we invested in several years ago, to see what had been accomplished since we were last in the area. We made the short drive from Granada to Vistalagos, overlooking Laguna d'Apoyo, and were happy to find several houses built and a couple of owners in residence.

One house in particular caught my attention, and I asked Lief to stop the car.

"They have such a nice garden," I said. "I'd like to have a closer look."

"But they could be home!" Lief replied. "Don't go creeping around some stranger's house."

"No, no, I don't think anyone is here," I said. "I'll just run around back. I'd like to see the garden up close and the view of the lake from their patio."

As I was making my way around the side of the house toward the lake, I heard someone call out and Lief respond. Uh, oh, I thought. Busted.

Indeed, it was the homeowner, Brian Davis we soon were to learn, who had spied us out his window and come to the door to ask Lief...well, I'm not sure what he asked Lief. Fortunately, he didn't seem too bothered by two people appearing on his property unannounced on a Saturday morning.

"Would you like to come inside?" Brian asked after we'd all introduced ourselves. "You're welcome to have a look if you'd like."

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Price Increase Imminent For Mango Plantation Investment In...

Last Chance To Get In On My Favorite Agro-Investment Pre-Price Hike

Sept. 26, 2014, Panama City, Panama: Invest in my favorite agro-opportunity in Panama before the price increases.

Dear Live and Invest Overseas Reader,

For some time now I have been writing about a mango plantation here in Panama that projects a 16.52% annualized return over 15 years (the returns go beyond 15 years, but it's difficult to project returns any further out than that with any confidence).

The 16.52% annualized is a conservative estimate. By year five, when the mango trees reach maturity, a 30% annual yield could be achieved. Furthermore, while returns have been projected over a 15-year time span, mango trees have a 60- to 80-year productive lifespan, meaning your investment could continue to generate cash flow for generations, making it a legacy investment you could hand down to your children or grandchildren.

Since I first mentioned this opportunity in February, the developer has been busy. Some 200 hectares of land have been cleared, 40 hectares have been planted with mango trees, and the developer continues to push ahead to clear and plant the remainder of his current 750-hectare plantation.

Now that this group is well into implementation of the project, it's time for a price increase. The current price of US$33,500 per hectare will be raised to US$36,500. While the projected annualized returns will remain excellent at the new price, they won't be as good as the current 16.52%.

You may never have considered mangos as an investment, but they are one of the best agro-opportunities available. Mangos are the second most consumed fruit in the world, in high and growing demand. In Latin America, they are part of the daily diet. The fruit can be consumed fresh, dehydrated, or as juice. The seeds are used to produce mango butter and a range of pharmaceutical and cosmetic products. Even the skin has value, for dietary extract and animal feed.

Panama's climate is perfect for growing mangos. The variety of mango being planted at the plantation I've identified is unlike any other—meatier and sweeter and with a skin thick enough to prevent insects from eating their way inside. Thanks to this, the developer is able to forego the use of chemical pesticides, keeping the project 100% organic. This has allowed him to apply for organic labelling, which in turn means these mangos will fetch a better price on the global market.

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Understanding Offshore Corporations, Trusts, IBCs, And Other...

Offshore Structures—What Do You Need, How Much Is Too Much?

Sept. 25, 2014, Panama City, Panama: When deciding what offshore corporations, trusts, IBCs, or other structures you need, less is more and simpler is better.

Dear Live and Invest Overseas Reader,

A consulting client came into our office yesterday to ask me some questions about how to structure property investments he's making in Panama and Colombia. This client has been working with attorneys in both of these countries as well as in the country where he set up his LLC, but he wanted to make sure he's fitting all the pieces together as advantageously as possible in the context of his big-picture goals.

"In the context of his big-picture goals" is the critical phrase here. No single entity or set of entities fits every situation. What you find, though, is that whatever advisor you work with has his or her individual experiences and advises based on what he or she is familiar with.

Most Panamanian attorneys, for example, will advise you to put any property purchase into a corporation. Because that's what they do in Panama, both locals and foreigners. Historically, this has been to avoid capital gains tax, which is not imposed on the sale of company shares. You could set up a single-purpose corporation to hold a piece of property, then, when you wanted to sell that piece of property, you were in fact selling the company that owns it...meaning no capital gains tax issue.

Panama changed the relevant tax rule years ago, but people in this country still put real estate they buy into Panama corporations. There are other reasons why using a Panama corporation to hold your Panama real estate can be a good idea, but you should understand them before taking a Panamanian attorney's blind recommendation. Don't let custom dictate how you organize your affairs. Question the reasons why you're being advised to do whatever you're being advised to do, in Panama or anywhere.

The client who came in to meet with me yesterday had been advised by his Colombian attorney that, if he wants to have the title for the property he's investing in in that country issued in the name of his offshore LLC, he'll need to have the LLC documents officially translated and apostilled. That is mostly accurate. I confirmed with my attorney in Colombia that, yes, the LLC documentation must be officially translated but only the certificate of formation...not all 20 pages of the articles of formation. That difference saves money and time on the translation.

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How To Find The Best Options For Diversifying Your Life And...

Give Up Chasing Your "Best" Options Overseas...That's Not The Point


Sept. 24, 2014, Panama City, Panama: Here’s how to make a plan for diversifying your life and your assets offshore.

Dear Live and Invest Overseas Reader,

A friend is pursuing multiple residency options concurrently. He's in different stages of trying to establish residency in several different countries with an eye to eventually obtaining citizenship in each one, as well. He figures that at least one of the applications won't work out. Plus, each comes with different timelines and requirements, and these things are always changing, so he has decided that the best strategy is to cast a wide net.

Setting up legal residency in several places at once takes time and a bit of money. The attorney and government fees add up. However, my friend has decided that, for him, the peace of mind that he'll have with the options he's putting in place for himself will be well worth the cost.

I see another plus in this unconventional approach: It has saved my friend from having to worry about making a single "best" choice. He's pursuing various good options at once.

Waiting for the "best" choice has slowed down and fouled up many people I've known over the years, and not only when it comes to deciding where to establish residency. I met a real estate investor at a conference about eight years ago, for example, who started the conversation by telling me he'd been looking at making a real estate investment in Costa Rica for a few years. At the time, Costa Rica was off my radar, so I asked him what he'd found...what had he invested in or what was he thinking of buying?

He told me that, although he'd been looking for four years, he hadn't bought a single property. He had come across good deals, but, in each case, he wasn't sure that what was before him was the "best" deal, so he passed...and kept looking. Eventually, he'd decided that all the "best" deals were gone...he'd missed them. So he'd moved on to the Dominican Republic, which is where I met him.

At the time I made this gentleman's acquaintance, he had been shopping in the DR for a couple of years already...but he hadn't bought anything in that country either.

The irony of the situation was that, had the guy invested in anything—I mean any piece of property he'd come across when he'd landed in the country two years earlier—he would have realized a gain of at least 25% by the time I met him, probably more.

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Kathleen Peddicord

Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 25 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring, and investing overseas in her free e-letter.

Her book, How To Retire Overseas—Everything You Need To Know To Live Well Abroad For Less, was recently released by Penguin Books.

Read more here.

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