Maybe the attorney this client is working with in Colombia was trying for a few extra bucks from the translation gig or maybe, to give him the benefit of the doubt, he didn't understand what's really required. Impossible to say. This is why, unless I have recent firsthand experience doing the thing I'm about to do again, I try to get at least two sources when it comes to process details. Returning to structures, my overriding recommendation is to keep things as simple as possible. While the client who came in to speak with me yesterday could have set up a Panama corporation that his LLC could own (with the Panama corp holding the property), that is more structure than he needs. Putting the property straight into the LLC is sufficient in his case, under his circumstances, and considering his objectives. That gives him asset protection in Panama, which is the real point. It also reduces his carrying costs, perhaps, this time, to the disappointment of his Panamanian attorney. Attorneys make money both setting up corporations and acting as resident agents for those entities. If my first advice regarding structures is to keep things simple, my second is to have a plan. As much as possible, have some idea where you expect to invest and in what. This can help save you investing in structures, translations, or other costs you don't need. An attendee at a conference last year asked me what I thought she should do with her Panamanian corporation. "Well, why did you set it up in the first place?" I asked. "All my friends told me I needed a Panamanian corporation," she replied. So, on her first trip to Panama years ago, she set up a corporation. She had no intended use for it and no understanding, really, of what it might eventually, possibly ever be used for. Not surprisingly, therefore, in the several years she'd held it, she'd never done anything with it. This after paying to set it up and then paying the annual fees to maintain it. After talking with this conference-goer about her plans and goals as an offshore investor, my advice was that she walk away from the Panamanian corporation. Just stop paying the annual fees. If she found herself needing a Panamanian corporation sometime down the line, the cost of setting up a new one is only about two years' worth of annual fees. Fortunately, the wasted investment amount in this case wasn't great. I've known people over the years who've had similar stories to do with complicated trusts, which can cost tens of thousands of dollars to set up. For many people, a trust is overkill. With the help of several attorney colleagues from different jurisdictions, I'll be covering structures in one of the workshops at my Global Asset Protection and Wealth Summit in Belize next month. Avoiding the cost of setting up an unnecessary structure will pay for the cost of being in the room with us in Belize City, but I'd say you'll get a lot more out of the event than that. Who should join me and my team of experts in Belize? Anyone considering options for banking, establishing residency, obtaining second citizenship, investing, or doing business offshore. We'll spend time discussing taxes, too, as well as the big-picture objectives and strategies for diversifying your life, your portfolio, your assets, and your business interests offshore. If any of those topics interest you, I'll look forward to meeting you there. Lief Simon
"Kathleen, how about doing an update on Dominican Republic?" --Paul O., United States Funny you should ask... My Associate Publisher Harry Kalashian and my Managing Editor Kaitlin Yent departed Panama City early yesterday morning for a scouting expedition in, you guessed it, the Dominican Republic. We are more interested in this Caribbean destination than ever. Here are Harry and Kaitlin's first-day impressions of Las Terranas, Samana, where they're based for this trip, emailed to me overnight: "The new two-lane toll highway from the airport to Samana is great. It and the turnoff onto the peninsula are in perfect condition. Zero potholes, lines painted, etc. Once I figure out what they know that the Panamanians don't, I'll let you know...though it probably has something to do with the fact that this highway is managed by a private company—in every regard. There are no cops patrolling it, only private security. "Anyway, apparently the former president and his party are in love with the Samana peninsula. He stopped running after multiple terms, his protégé is the president now, and his wife is VP, a new position just created for her. Their collective dream is to make Samana the next St. Tropez. The new highway was built to encourage development. It makes it an easy two-hour drive from the airport now, compared with four to six hours previously. "Before the highway, businesses were importing from the capital at a 15% markup and pilots were making multiple daily stops between the local airport and the capital. That's died down now, but people are still content to save several hours and pay a markup on certain goods available only in the capital. Not sure what those goods are yet, but apparently the capital is a lot like Panama City, with luxury malls selling Coach, Tiffany's, etc., and plenty of Porsche Cayennes. "The people are friendly, and litter is not a problem. There's really no indigenous blood left, so everyone is of African or European descent. Everyone gets around by moped or motorcycle. It's poor but not menacingly so. "I'd say that Las Terranas is light years ahead of other Caribbean destinations I know, in terms of infrastructure, litter, maintenance, and just how things work. That is, things work here. It helps that the town was settled decades ago by French, who were followed by Italians, followed by locals and then other Europeans and North Americans. There are second- and third-generation French and Italian families here, important influences behind ongoing development. "Las Terranas is a small beach town with a one-way figure-8 road winding through it. Driving through the point of the road, you're reminded of Belize City, except there's foliage everywhere, everything is cleaner, and people are smiling. The beach is ever-present and a few steps away, and the way the coast is rippled with points allows for multiple bays. When on the beach it's nice to have the peripheral views of beaches and palm trees, rather than just a straight and flat horizon of ocean. "Food so far is great. A ton of French influence. The de facto town center is a small two-story thatch-roofed outdoor mall with about 30 stores. All signs are in French, Spanish, and English. There's a tabac, a large wine store, a number of cafes, and a boulangerie. People we passed were having convos in French, and the street signs for the walkways within the outdoor mall are replicas of those in Paris. "More tomorrow..."
The utilities figure for each of our 21 budgets is straightforward; groceries and entertainment, much less so. If you shop at local markets and stick to a basic, local diet, your monthly groceries bill could be US$150. If you shop at U.S.-like grocery stores (which exist in every place on my list below) and want to eat like you ate back home (prime rib, Entenmann's, and French wine), your monthly food bill could be two, three, or four times US$150. Likewise, entertainment. Our Index budgets include amounts for eating out once a week and going to the movies a couple of times a month, say, or perhaps taking one in-country trip per month to explore your new home. You could, if you wanted and your budget allowed, eat out four nights a week and take international vacations twice a year. On top of the overall cost of living wherever you decide to retire you'll have the cost of housing. I recommend renting first, to give yourself a chance to get to know your new home and determine if it is, in fact, the right place for you. For each of the 21 top retirement havens on our Index list, therefore, we indicate an average cost for renting a one-bedroom, one-bath residence in a neighborhood that would be appealing and appropriate for a retiree. After you've been in residence for a while, you may decide you like the place well enough to commit long term with an investment in a home of your own. Buying a piece of real estate in another country can also offer the potential for return, from capital appreciation over time and from cash flow if you decide to rent the place out when you're not using it yourself. Therefore, for each of the 21 destinations on our Retire Overseas Index list, we also figured an average cost per square meter for the purchase of property. This is the best way to consider this. In fact, breaking down a location's property market to an average cost per square meter for a particular kind of property is the only reliable way to compare that location's property market with the property market anywhere else, the only apples-to-apples strategy. In Nashville this week for our annual Retire Overseas Conference, we'll be sharing the results of this year's Retire Overseas Index, including the monthly budgets, the rental costs, and the average per-square-meter cost to purchase real estate for all 21 destinations featured...and a few others, to boot. Here's a sneak preview for some of the destinations being featured... In the Americas: Ambergris Caye, Belize Monthly budget: US$2,055 Rent per month: US$1,000 Purchase per square meter to purchase: US$2,000 City Beaches, Panama Monthly budget: US$2,440 Rent per month: US$1,200 Price per square meter to purchase: US$1,900 Cuenca, Ecuador Monthly budget: US$1,010 Rent per month: US$300 Price per square meter to purchase: US$1,100 Granada, Nicaragua Monthly budget: US$1,040 Rent per month: US$500 Price per square meter to purchase: US$1,500 Medellin, Colombia Monthly budget: US$1,530 Rent per month: US$650 Price per square meter to purchase: US$1,050 Puerto Vallarta, Mexico Monthly budget: US$1,910 Rent per month: US$850 Price per square meter to purchase: US$2,490 In Europe: Algarve, Portugal Monthly budget: US$1,500 Rent per month: US$615 Price per square meter to purchase: US$1,960 Barcelona, Spain Monthly budget: US$1,725 Rent per month: US$1,085 Price per square meter to purchase: US$5,500 Pau, France Monthly budget: US$1,930 Rent per month: US$1,285 Price per square meter to purchase: US$2,300 In Asia: Chiang Mai, Thailand Monthly budget: US$920 Rent per month: US$400 Price per square meter to purchase: US$1,100 (note that foreign ownership of real estate is restricted in Thailand) Dumaguete, Philippines Monthly budget: US$910 Rent per month: US$350 Price per square meter to purchase: US$1,200 Nha Trang, Vietnam Monthly budget: US$660 Rent per month: US$300 Price per square meter to purchase: Foreigners can't own property Kathleen Peddicord P.S. What brings us to Nashville this week? Our annual Retire Overseas Conference! For years, friends have encouraged me to visit Music City. Finally, I was able to engineer a good reason. We arrived yesterday, and I can tell you that my friends' reports did not embellish or overstate. This is a fun town. Live music everywhere. It's not too late to make plans to join us here for what is going to be the biggest retire-overseas event of the year, this Friday through Sunday at the Lowes Vanderbilt Hotel. In addition to the three-day Retire Overseas Conference Aug. 29–31, we're also hosting a first-ever Retire Overseas Expo the day before (Thursday, Aug. 28), from noon until 7 p.m. This half-day special event is open to the public, an ideal way to dip a toe in the retire-overseas waters, and, best of all, absolutely free for Live and Invest Overseas readers. Regular admission is US$25. However, simply confirm at the door on the day that you're a Live and Invest Overseas reader, and you'll be granted full access at no cost. One way or another, therefore, I say: Get thee to Nashville. Dozens of correspondents and expats from around the world will be convening here today through Thursday so they can be on stage with us throughout the weekend to help showcase the world's top retirement havens for the nearly 300 registered attendees. Come on down and join the fun. Details of the Retire Overseas Expo taking place Thursday, Aug. 28, are here. Details of the Retire Overseas Conference taking place Friday, Aug. 29, through Sunday, Aug. 31, are here. See you soon.
Another friend may learn this lesson soon. He's planted thousands of coconut trees in Panama because coconuts have become a hot commodity for both their oil and their water. He made the investment in the plantings, though, before he had pinned down a sales outlet, and now he's scrambling to find a buyer. Probably he'll be able to sell his crops locally, but the local price won't get him the profits he projected based on international market values. I'm in the process of planting timber and fruit trees on 10 acres I own in Belize. My first question to the agriculture guy who's going to manage the work was, What can we sell easily locally? I know that the volume of production from the mixed trees I plant on my relatively small piece of land won't be enough to sell for export. Therefore, I want to grow things that the locals need and buy. The guy I'm working with recommended a couple of hardwood trees that few outside Belize have heard of but that are sought-after for local home building and wood working. It will be 15 to 25 years before these trees are ready for harvest, though, so I've got to bet that current demand won't shift over the next couple of decades. If it does, the trees still will have value as hardwoods, but the returns will be less than we're projecting now. For the fruit trees, again I'm going with what can be easily sold locally—avocados, bread fruit, bananas, and a few others. Once you're sure you have an outlet for where to sell your produce, then, unless you're interested in doing the farming yourself, you need an "operator," as one colleague with many agricultural undertakings calls the guys who do the work on the ground. Finding an operator can be easy enough in countries with an agricultural base. When this is the case, you'll find many companies in the business of running farms for people. Your challenge will be to identify one who has experience with your planned crop who you can also trust. My 10 acres in Belize won't throw off the same annual yields as a focused farm, but that's not the point with this land. This is more a personal experiment than a serious investment, and we intend to build a house here, too. Still, I'd say that planting trees is a good idea under any circumstances. As a friend who shares this perspective likes to say, if you need the income in 10 or 15 years, you'll be happy you planted the trees...and if you don't ever need the income, you'll be happy you planted the trees. Meanwhile, I'm researching pecans. Lief Simon
In fact, our chef is our new neighbor. He and his partner also have invested at Maya Spring Estates. They've already begun tilling their 3-acre parcel, preparing the earth for planting. James is a Cordon Bleu-trained chef with decades of experience, his partner a world-class baker. The pair has made their way to this spot in Belize to open a boutique restaurant. They'll prepare meals using ingredients grown on the property, one set menu each day. Last night Chef James' menu was cheeseburgers prepared over an open fire. Delicious. Another neighbor has begun construction of his guesthouse on his 5-acre parcel. This will be followed by gardens and then, later, the main house. Lief and I also plan to build a guesthouse and a farmhouse on our plot at Maya Spring. First, though, we're interested in getting some trees growing. The Maya Spring community barbecue last night was a chance for us to formulate a plan with resident horticulturist Con (the one with the flat tire). We have 9 acres to work with. About 1.5 acres will be given over to the farmhouse, guesthouse, and kitchen gardens. The remainder of the land we want to treat as a mini-plantation. Our idea is to plant timber intercropped with specialty plants prized by florists. Lief and Con considered different Belizean hardwoods—mahogany, cabbage wood, cedar, rosewood—and Con suggested two varieties of palms whose fronds are in great demand and saleable for relatively large sums even locally in Belize. "Let's start by planting 100 neem trees along the far perimeter," Lief suggested. "That'll create a wall for privacy and also help control pests." "No problem," Con replied. "Can you get 100 neem trees?" I asked. "No, I don't think so," Con admitted. "People here, they grow a few trees and sell them. You don't find anyone with large stocks of inventory. But I can work with a grower to produce 100 neem trees and everything else you guys want." "What about the harvests?" I continued. "We want to keep this experiment as simple and low-key as possible. We're working with a small piece of land. We won't be growing enough to make exporting the harvests worthwhile. Would we be able to sell the timber we're thinking of producing in Belize?" "Definitely," Con said. "The timber and also the palms. I've been working with a hotel out on Ambergris, for example, that wants hundreds of the specialty palm fronds I'm suggesting you plant per month, but they can't source them." Lief and I know next-to-nothing about farming. But we have an interest, based mostly on a natural curiosity and an affinity for growing things. We're not doom-and-gloomers, but we do also like the idea of learning how to be more self-sufficient. Our 9 acres at Maya Spring Estates is our first focused effort at this. We feel lucky to have connected with Con, the friend of a friend, who shares our passion for planting and backs it up with experience, know-how, and local connections. "Make it so!" Lief proclaimed to Con with uncharacteristic enthusiasm after we three had agreed a plan. Maybe he'd had one too many One Barrel rums. The Cayo sky was fully dark by now. Above us a bright moon and a blanket of stars...in the distance, beyond the hills, the lights of nearby San Ignacio. "Time to head out," I said to Lief and Jack. "Couldn't I stay here?" Jack asked. "I could sleep in one of these hammocks. Just cover me with bug spray and come back for me in the morning..." Kathleen Peddicord P.S. Whether you're after a place by the beach...or in the interior Cayo region (with its Mayan ruins, caves, rivers, waterfalls, and rain forest)... you'll find many options in this safe, welcoming, English-speaking haven. Registration for our Live and Invest in Belize Conference opens soon. To get on the Hot List—for VIP perks and to be notified of the best discounts—go here now.
"About a year," she replied with a big smile. "I have to ask," I continued, not wanting to insult but trying to understand, "are you busy? I mean, this isn't a typical Cayo restaurant... and you're not charging typical Cayo prices." The US$2 happy-hour mojito special aside, prices at Fuego are real-world. Main courses are US$8 to US$16, which isn't super expensive but, again, not what you might expect to pay in a restaurant in this part of the world. "I don't mean to imply your prices are expensive," I added quickly, seeing the manager's face fall in response to my question. "I want you to stay open, that's all. I'm wondering if you're finding steady clientele." "Yes, yes," the nice young lady replied, her big smile returning. "We're doing very well. Tourists are finding us, but the locals, too, are eating here. We're the most popular date-night restaurant in all Cayo." San Ignacio also now boasts a pedestrianized thoroughfare lined with boutiques, souvenir shops, tour companies, and real estate agencies. I observe the advent of prominent town-center real estate agencies here with ambivalence. Nice, of course, for would-be buyers to have ready support. On the other hand, the arrival on the scene of foreigner-focused agents indicates the market has moved beyond the nobody's-paying-any-attention point. Still, prices can be absolute bargains, as little as US$1,000 per acre. Young Jackson saw a listing for 16.5 acres on the Belize River for US$22,000 that got his attention. "Do you think Dad would lend me the money to buy that?" he asked. "That's the kind of place I'd like to live..." In other news from Belize, Skype is no longer outlawed. The local phone monopoly, BTL, used to interfere with Skype access. No more. Last year, the Belize government lifted all restrictions on all VOIP services, including Skype. And Internet and cellphone access throughout the Cayo continues to improve. At the jungle resort where we're staying, we are enjoying reliable wireless in the restaurant and bar areas (that supported video chatting with my mom on her birthday) but, alas, no access in the guest cabanas. "We're working on it," the property manager told us when he checked us in. Kathleen Peddicord Editor's Note: Belize is one of the top places in the world right now for an affordable retirement at the center of adventure. But, with the market moving, you need to check it out sooner rather than later. We're opening registration for the Live and Invest in Belize Conference in a few weeks. But today you can get your name on the event's Hot List for special discounts and VIP perks. Do that here now.
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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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