Kathleen Peddicord P.S. Peter and Lief's remarks and recommendations for where and how to bank offshore in our post-FATCA world were recorded and are being edited now, along with the recordings of every other presentation from last week's meetings in Belize City. Together, this timely bundle of resources will create our new Wealth Building and Diversification Kit. Right now and for the next 72 hours only you can reserve your copy of this everything-you-need-to-know-to-diversify-offshore program pre-release for 50% off the regular price. This discount expires at midnight on Nov. 2.
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"Until that point, Belize had been British Honduras, a colony of the Crown.
"The constitution for this new country was based on the Canadian constitution. What does this mean?" Peter asked the crowd.
"That means boring. Boring politics, boring everything. Not much to rock anybody's boat.
"As a result, in the nearly three decades since, Belize has managed to remain largely under the radar. Ambergris Caye drew some attention as the setting for TV's 'Temptation Island.' Otherwise, other than from global divers and sun-seekers, Belize has been really successful at attracting very little attention.
"I spent many of the first 27 years of my 30-year banking career in Europe," Peter continued, "working with Swiss banks, for example. We Swiss bankers back then would turn up our noses at the mention of 'Belize banking.' Bank in Belize? Who would give their money to a Belize banker, we wanted to know. Bankers in Belize can't count, can they?
"About four years ago, I retired from the Euro-bank where I'd been working. Retirement's not so much fun, I realized after about two days. When I thought about returning to work, I considered not the opportunities in Europe, but those on this side of the world, in the Americas.
"That's looking like a smart move right now. In the time since I moved from the banking industry in Europe to the one in Belize, the global banking industry has been turned on its head.
"Used to be, the mention of 'banking' brought places like Switzerland or Austria to mind. This paradigm has collapsed. Banking in Switzerland has collapsed.
"There are dozens of 'banking havens' around the world. The truth is, though, that very few of them deserve the description right now. Belize is an exception. Belize is a true banking haven.
"Why? Two reasons.
"First, bank secrecy. Belize maintains it. Anyone in the Belize banking industry who violates the country's bank secrecy laws goes to jail for a minimum of 18 months. Trust me. You don't want to spend 18 months in a Belize jail.
"How has Belize managed to maintain its bank secrecy position while other better-known jurisdictions have all but abandoned the idea?
"That's it, precisely. Belize is little-known. Remember, this country has kept its head down. No one pays it any attention, and Belize is keen to keep it that way.
"The second reason Belize stands out among the world's bank havens right now is liquidity.
"Used to be, when I started talking about bank liquidity at a conference like this one, I'd notice people begin to nod off. Some would even head for the door. Nobody had any interest in the idea.
"I notice, though, today, you all seem wide awake. Thanks to recent events, bank liquidity has become a hot, sexy topic.
"Current liquidity among banks around the world is less than 4% In fact, it's just about 3.1%. That's the average worldwide. What's the situation in Belize?
"Banks in this country maintain liquidity rates of 24%. This standard is mandated by the Belize government. A quarter out of every dollar in a Belize bank must be liquid. If a bank falls below this level of liquidity, the government can take the keys and close the bank.
"How did Belize bankers fare during the recent banking crisis? We sat back and smiled. We knew we didn't have anything to worry about, and, in fact, not a single Belize bank has failed.
"Belize banks maintain an extraordinarily high standard of liquidity, and they lend only 50% loan-to-value for mortgages. That's how Belize banks stay healthy.
"You can open a bank account at my bank in Belize with zero dollars. Why? Because we, like all Belize banks, are focused on attracting small- to medium-sized investors. We're not going after mega-clients. Mega-clients attract attention. Remember, Belize is a low-key jurisdiction, happy to stay off the world's radar.
"That's not to say we're ready to open an account for any shyster who comes along. The days of sewage banking are over. The banks that threw off a stench in places like Panama and Belize, are gone. No more numbered accounts. We need your name and your address (not a P.O. Box).
"And we're going to ask you how you made the money you're depositing. We need to know our clients. We need something to fill in the blank on the application form. This helps to protect fellow account-holders, as well as the bank.
"Remember, Belize speaks English. So your account manager is an English-speaker. And Belize is in Mountain Time. You don't have to get up at Midnight to have a conversation with your banker.
"Americans and Canadians can open either a personal account or what's called a structure account. This is the preferred option. It's an account formed for you by someone else that's not in your personal name but in the name of a structure--a trust, a company, or a foundation, for example.
"Once you're offshore, you want to do as little in your own name as possible. Put everything possible in the name of a structure.
"You don't have to come to Belize to open your account. In most jurisdictions, including Panama, you must appear in the bank in person to fill out the forms, sit through the interviews, and sign on the dotted line. Not so in Belize. You don't ever have to step foot in the country if you don't want to.
"But I'd suggest you come have a look. You'll find yourself in familiar company. This is where the Baby Boomers are headed. They're coming our way in growing numbers. Walk down the street on Ambergris Caye, and you hear the music of the Boomers all around--the Beatles, the Rolling Stones, Janis Joplin...
"These folks had a great time in the 1960s...then they became the most boring people on the planet. They made a lot of money...and now they're looking to reclaim their lives. They're finding their way, in retirement, to places like Belize...where they're listening to their music again, growing their hair long again, and spending their days stoned again...
"I'm joking about that last bit. But my point is that Belize has what a lot of people in North America are looking for at this point.
"It's also got the most appealing banking industry in the world right now."
Ann Kuffner Live and Invest in Belize Conference Insider
Editor's Note: We got Peter's complete address on tape, and it's featured along with all the other presentations from last week's conference in our all-new Live and Invest in Belize Home Conference Kit.
The audio recordings are being edited as I write. Meantime, you can purchase your copy of this important and very timely resource pre-publication and save a full 50%. Full details on the Live & Invest in Belize Home Conference Kit here.Continue Reading:
Image source: Tbachner
"About a year ago," Phil continued, "I'd driven from Belize to Cancun in a hurry. I was running behind schedule and raced across the border, happy that they didn't pull my truck aside for inspection.
"On my way back to Belize a few days later, though, I realized I had a problem. I'd managed to drive across the border from Belize without getting an exit stamp in my passport. No one stopped me on the way out, no one asked any questions, and I was in such a rush that I didn't think about it.
"Back at the border trying to get back into Belize, though, then I was stopped. 'Where is your exit stamp?' the guy wanted to know.
"'Somehow I neglected to get one,' I explained.
"'Do you understand that the fine for this is US$1,000?' he asked stoically.
"'Listen, though,' he continued, 'maybe it doesn't have to come to that. Why don't you take this away with you,' he said, indicating my passport, 'and then come back with something inside. We'll go from there.'
"I walked over to the side of the room and had one of those moments of truth. Should I pay the guy off...or take my chances on having to pay the US$1,000 fine...
"I put US$20 inside the passport and walked back over to the guy, placing my passport on the counter in front of him. He picked it up and looked inside.
"'I don't think you understand,' he said. 'It's Christmas time. And I'm going to have to share this with all the guys here. I think we're going to have to do better than US$20.'
"'Well, sir,' I began, 'this isn't really about the money. This is about the principle. It was an honest mistake. I just passed through quickly earlier in the week and forgot about the stamp. I come and go across this border all the time. I'm very actively invested in your country, with three different property development projects. I've been doing business in Belize for many years. So, again, this is about the principle here. It's not about the money.'
"'Right now,' my friend on the other side of the immigration counter replied, looking straight into my eyes, 'it's about the money.'
"How could I argue with that? I put another 20 dollar bill in the passport, and my new friend seemed happy.
"'Next time you come through, you look for me,' he told me. 'You'll have no problems from here on out...'"
We had no problems yesterday. Our lady immigration officer waved us through (after, yes, stamping our passports). Likewise, the lady customs inspector. She waved us through after asking but a couple of questions half-heartedly. She didn't seem overly interested in getting up from where she sat. It's hot in this part of the world, and the immigration and customs hall at the Mexico-Belize border isn't air conditioned.
From the border it's an hour-and-a-half to Belize City. Driving in to town just as the sun was setting last night, I felt nostalgic. I came to Belize City for the first time about 25 years ago. I've returned at least two-dozen times since. Belize City today looks exactly the same today as it did two-and-a-half decades ago. Nothing changes in this town. "The good news from Belize is no news from Belize," jokes a local friend.
Yep, Belize City was a dump 25 years ago, and it's a dump today. A remarkably down-at-the-heels place as desperately in need of a fresh coat of paint today as it was when I first set eyes on it all those years ago. Few other places in the world are as reliably or as appallingly shabby.
But that's Belize City. Belize City appearances aside, this little country is more appealing right now than ever before in its history.
Belize has been enjoying average growth rates of 6% per year for the past six years. Its economy is no longer supported entirely by timber, chicle (the stuff they use to make Chiclets...it comes from a tree), and bananas. Today it also includes revenues related to tourism, real estate, financial services, and oil.
The real reason, though, why Belize is so interesting today to the would-be expat and investor is because it has managed to remain well under the world's radar. As banker Peter Zipper explained to the group assembled in Belize City today for our Live and Invest in Belize Conference:
"In today's world, small is good. None of the world's bullies are paying any attention to Belize because there's just not enough here to get their attention. Bigger fish to fry elsewhere."
Meaning the good news from Belize remains: No news from Belize.
And everyone down here in Belize likes it that way just fine.
P.S. We're recording every presentation, every discussion, every question, and every expert response of this week's Live and Invest in Belize Conference. We'll package the entire collection of live recordings along with all other materials from the event to create our new Live and Invest in Belize Home Conference Kit...which we'll make available to you at a pre-publication discount starting later this week. Watch this space.Continuing Reading:
Strictly speaking, it means simply to do something in another country. For an American, going offshore means investing, banking, or doing business outside the United States. If you're British, going offshore means operating beyond the United Kingdom. Etc.
Nothing so scary about that.
The trouble starts when you consider specific "going offshore" strategies--setting up a trust in another jurisdiction, for example, or opening a foreign corporation to hold real estate holdings, say.
Just as I recommend you start small with your retire-overseas thinking and planning, so, too, should you start small and simple when it comes to moving your assets offshore.
You don't have to figure out an umbrella strategy of corporations and holding companies straightaway. The truth is, most of the complex structures many offshore attorneys promote aren't necessary for most people, not immediately and not long term.
In fact, maybe all your going-offshore plan will ever require is an overseas bank account. So start there.
Plant your first offshore flag by opening a bank account in a jurisdiction you're comfortable with.
Keep in mind that the country where you choose to do your banking need not be the country where you're living, where you're doing business, or where you hold citizenship. These are all separate agendas. All different flags to plant, perhaps, among different jurisdictions to your greatest advantage.
Big banking news in Panama in the past few months. By signing the Tax Information Exchange Agreement with the United States last November, this country effectively terminated its offshore banking haven status. Panama remains the world's top retirement haven and the best place in the world today to start and operate an international business. But this is a banking haven no longer.
The best current option in that regard is Belize, an under-the-radar jurisdiction that continues to respect its tradition of bank secrecy.
In addition, it's possible to open an account in Belize long distance, and, at at least one bank we prefer, you can open an account even without making an initial deposit. In other words, to make the point, this isn't a strategy for millionaires and jet-setters only.
I also personally like Andorra as an offshore banking jurisdiction. My preferred Andorran bank has a branch in Panama City.
My preferred international banks will be represented at our upcoming Emergency Offshore Summit. Also presenting will be top offshore banking experts and advisors, who can help you to formulate your own offshore banking strategy.
As I said, it doesn't have to be complicated. But it does need to make sense within the context of your activities, business agendas, and investment and asset objectives overall.
Full details of the program we're planning are here.
Kathleen PeddicordContinue Reading:
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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.
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