How FATCA Has Changed The World Of Offshore Banking

Global Banking In Our Post-FATCA World

Oct. 31, 2014, Belize City, Belize: FATCA regulations are playing out, and banks around the world are scrambling to become compliant.

Dear Live and Invest Overseas Reader,

"'Knock three times and ask for Roscoe.'

"That's what offshore banking used to be," Peter Zipper, an offshore banker with more than three decades of experience, explained to the crowd in attendance at last week's Global Asset Protection and Wealth Summit in Belize.

"But those days are over," Peter continued.

"In 1999, there was a global banking conference, which I attended, during which the world of offshore banking was changed dramatically. One specific outcome of that convention, for example, was the end of the numbered account. Ever since, if you want to bank with Roscoe, you've got to reference your account name," Peter assured the group.

The offshore banking industry is right now experiencing another dramatic upending, this time not in the interest of cleaning up banking dumps but with the clear and straightforward agenda to track the movement of money around the world more tightly and to tax every possible dollar along the way.

July of this year was the deadline for banks around the world to begin complying with IRS FATCA regulations or risk U.S. dollar transfers to their bank having 30% withheld by the sending bank. Come July, however, neither the IRS nor the global banking industry was in a position to meet FATCA administration requirements, so the compliance regulations have been loosened to allow everybody more time to continue working through the associated red tape. Banks have been signing up for their Global Intermediary Identification Numbers (GIIN); many have received them but not all. During this time of transition, compliant banks are to maintain the IRS-required information to do with money transfers and account holders, but they don't have to begin sending this information to the IRS until next year.

"Which banks won't comply?" Lief Simon asked the audience at the conference.

"That is," Lief continued, "maybe you're thinking that you'd like to identify those banks that don't intend to comply with IRS regs and do business with them alone?

"That's not a practical strategy," Lief explained. "A noncompliant bank will have that 30% withholding yoke on it, meaning it's going to be really expensive to do business with a noncompliant bank. In other words, any bank that wants to deal in U.S. dollars will be compliant. I'm not sure which banks that fact leaves out, but I'm guessing you aren't going to be able to conduct whatever business you want to conduct through them.

"One way for a bank to comply with FATCA rules," Lief said, "is to have no U.S. account-holders. A number of banks around the world are going this route, but not all, of course, and the American looking to diversify his banking offshore still has good options."

Read more...

Corozal In Northern Belize Is A Top Affordable Caribbean...

Affordable Caribbean

Oct. 30, 2014, Corozal, Belize: Corozal in Northern Belize is a top option for an affordable lifestyle on the Caribbean coast.

Dear Live and Invest Overseas Reader,

If you've been reading these dispatches for any time, you know we're big fans of little Belize. I've been recommending Ambergris Caye, Belize's Caribbean face, for years and, more recently, the country's Cayo District for its back-to-basics self-resilient lifestyle.

Another part of this country is worth a look, too. Northern Belize is a remote region of tropical rivers, hardwood forests, traditional farms, sleepy rural villages, and breezy Caribbean seashores. This is a refreshingly off-the-radar place where residents embrace a simple, friendly, by-the-sea lifestyle.

It is also the best value destination in Belize and one of the most affordable options for retirement in the Caribbean.

Northern Belize is an area of about 2,500 square miles and the point where the Caribbean and Central America meet. As that geographic juxtaposition suggests, the population is diverse, and it is becoming more so as North American retirees are beginning to recognize what this overlooked part of Belize has to offer and settling here in growing numbers.

Northern Belize's remoteness is part of its appeal, but remote living has its disadvantages, especially in retirement. This is why the proximity of this part of Belize to Chetumal, Mexico, just across the border, is so important. The town of Corozal in Northern Belize is a gateway town to Chetumal and from there to Merida and Cancun beyond. In Northern Belize, you could enjoy a bargain Caribbean lifestyle with easy access to shopping, city distractions, and, very important, medical care in Chetumal.

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How To Choose Where To Base Your Business Offshore

How To Take Your Business Offshore (The Tax Breaks And Other Perks Can Be Big)

Oct. 29, 2014, Panama City, Panama: Panama is one of the best places in the world to base a virtual business.

Dear Live and Invest Overseas Reader,

Kathleen and I have set up and operated businesses of one form or another in eight different countries. Why have we done what we've done in each place where we've chosen to do it?

That is, if you want to launch a new business or move a current business overseas, where should you go?

It depends on what kind of business you're talking about.

If you have a bricks-and-mortar business in the United States, you'd probably find it difficult and maybe impossible to move that business offshore altogether, but you might be able to benefit by relocating some aspects of it. Customer service, for example, or some processing that happens before your goods come in to the States could be handled in another country where those functions come at a lesser cost, say.

If your idea is to start a bricks-and-mortar business in another country, the best choice for where, again, depends on the specific what. Unless, that is, you have a specific where in mind already. If you know that you want to move to Belize or Argentina or Thailand or the Philippines or wherever, then your challenge isn't where to locate your new bricks-and-mortar business but what kind of bricks-and-mortar business would make most sense in the place where you want to live.

For our purposes here, let's assume that the business, not the lifestyle, is the driving agenda. In that case, the question, again, is what kind of bricks-and-mortar operation do you want to invest in—retail, wholesale, franchise, or import-export? Some of these are better suited to some countries than to others, and some kinds of bricks-and-mortar businesses wouldn't make any sense in some parts of the world. If your plan is to open a retail shop or a franchise, you need population.

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Reasons To Establish An Offshore Corporation

Who Needs An Offshore Corporation?

Oct. 28, 2014, Belize City, Belize: One of the most common reasons to establish an offshore corporation is to hold foreign property.

Dear Live and Invest Overseas Reader,

"The question I get more than any other?" Lief Simon asked the audience at his Global Asset Protection and Wealth Summit in Belize last week.

"That'd be: 'What structure should I use?'"

"Right," added attorney and fellow panelist Joel Nagel. "That's probably my most frequently asked question, too.

"People make an appointment to see me, and then they show up at my office with a file folder in their hands," Joel continued.

"'I just came back from a vacation in the Cayman Islands,' they tell me. They're smiling. They've got nice suntans. And they've got these file folders...

"'While I was there,' they continue, 'I set up this corporation. Now I'm wondering,' they say, 'what should I do with it?'

"I give them the only answer I can, which is: I have no idea.

"In almost every one of these cases, the client set up the structure because he thought it was a cool thing to do or somebody told him it was something he ought to do. His golf buddy at the country club has an offshore corporation, and he thinks he needs one, too."

"Right," Lief interjected, "when in fact, this should work the other way around. You should start with a purpose. Have a goal in mind first, then go out and find the structure and the jurisdiction that serve that purpose."

Which gets to the real question:

Why would anyone want an offshore corporation?

One of the most common reasons to establish a foreign corporation is because you're buying a piece of property overseas. A foreign corporation can be the best way to take title.

"I've bought real estate in maybe 25 countries at this point," Lief explained, "and I own property right now in more than a dozen. Each purchase has been handled differently. Sometimes I've taken title in my own name, sometimes I've formed an entity to take title. Sometimes I use the same entity to hold a second or third piece of property, sometimes when making a new purchase I form a new entity.

Read more...

Property, Agricultural, Stock, And Bond Investments In Paraguay

South America's Rising Star?

Oct. 27, 2014, Asuncion, Paraguay: Paraguay qualifies as a blue ocean market, offering interesting property, agricultural, stock, and bond investment opportunities.

Dear Live and Invest Overseas Reader,

"Paraguay is the world's 10th-largest exporter of wheat.

"It's also the world's eighth-largest beef exporter, seventh-largest exporter of corn, sixth-largest producer of soy, fifth-largest exporter of chia and soy flour, and fourth-largest exporter of yucca flour and soy oil.

"The country has the third-largest barge fleet in the world (after the United States and China) and is the third-biggest exporter worldwide of yerba mate.

"Paraguay is the second-biggest stevia producer and exporter in the world and the world's #1 exporter of organic sugar.

"Paraguay is also a competitive and tax-friendly investment hub. You pay no tax on yields earned from an investment in the Asuncion stock exchange, and both the value-added (or sales) tax and the rate of corporate tax are 10%. This corporate tax rate compares nicely with those in Argentina (35%), Colombia and Brazil (34%), and Peru (30%).

"At about 400,000 square kilometers, Paraguay is the size of California. It has a total population of 7 million (70% of which is younger than 30 years old), a working population of 3.1 million, and a GDP of US$26 billion. The guarani is the official currency; the current rate of exchange between the guarani and the U.S. dollar is about 4,600 to 1.

Read 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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