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Lief offered six recommendations for good offshore banks that are still accepting U.S. clients. Then he offered a non-recommendation for one bank that we'd formerly done business with personally. This bank sent us the dreaded "We're closing your account" letter last year. They provided no explanation for why they were throwing us out and closing our account and gave us but 30 days to move the money.

"The worst part," Lief explained, "was that this was the one instance where I hadn't taken my own advice. I didn't have a second, backup account for this corporation, so I had to scramble. I spent a good number of the 30 days I'd been allowed knocking on the doors of banker-friends, trying to find one who'd open a new account for me before the deadline. I finally found one (it's one of the banks on my top six list)."

One symptom of the shake-up (shake-down?) taking place in the offshore banking world right now is rising fees. Banks are passing along the costs of complying with FATCA rules to clients.

"One bank in Panama," Lief explained, "is now charging a fee of any foreigner interested in opening an account with them. This fee is payable up front, before any other discussion takes place. If, after reviewing your paperwork, the bank decides it will not open an account for you, the fee is not refundable."

Lief closed his offshore banking remarks to the group with three pieces of advice:
  • Create redundancies. For every foreign bank account you have, you need a second, backup account...
  • When you have the opportunity to open an offshore account...open it. "You're here in Belize this week," Lief said. "I suggest you take advantage of this opportunity to start the process of opening an account. Two Belize banks are represented here at the event. All you have to do is stop by their tables in the exhibit hall..."
  • Don't close any foreign account you have if you don't have to—even if you have no immediate need for it. You never know when or if you'd be able to replace it in the future...

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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Belizeans are known for their hospitality. Plus, they all speak English, so new friendships are quickly and easily made. Corozal is home to an established and growing expat community, but this group is well integrated with the local Belizean community. Living here, how would you fill your days? Sailing around Sarteneja, horseback riding at Chan Chich, kayaking at Orchid Bay, fishing at Bacalar Chico, or bird watching at Crooked Tree Lodge, and you wouldn't ever lack for company, Belizean or expat, if you wanted it.

While some expat retirees are prepared to be pioneers and carve a homestead out of the jungle or maybe plant a farm, most prefer to settle in a town (the three most appealing for expat retirees are Sarteneja, Corozal, and Orange Walk) or in one of the expat pockets developing in places like 4 Mile Lagoon and Gringo Lane. In recent years, planned communities have developed specifically with the foreign retiree in mind.

Property taxes are miniscule in Belize. This is a plus on one hand, but it means that municipal services are thin on the ground. There just aren't funds to support them, thus the appeal of the organized and private communities that are evolving. These are places where you can enjoy a laid-back, bargain Caribbean lifestyle in Northern Belize while maintaining a North American standard of living.

Retirees settling in this part of Belize are launching all manner of businesses, from restaurants, bars, and B&Bs to construction services and farming. Others are well and truly retired, choosing to spend their days deciding which book to read next or which restaurant to boat over to for lunch.

Corozal (which is both a town and a district) maintains a Friendship List so expats can stay in touch and know what's going on. Every Wednesday, foreign retirees and residents meet at Jam Rock Restaurant for darts. One Thursday per month is the Corozal Women's Forum. Fridays are for Happy Hour and potluck dinners in expats' homes. The third Saturday of each month is Art in the Park, when local artists set up tables to display and sell their work. There's a local chapter of the Rotary Club, a Sailing Club, and Full Moon concerts in front of the Corozal House of Culture.

Despite the growing expat influence and excluding most waterfront property, real estate in this part of the country is still priced for the Belizean market. This is unusual and likely won't continue much longer. The presence of foreign buyers eventually translates to pricing for foreign buyers. This hasn't happened yet, though, meaning a window of opportunity.

As anywhere in the world, waterfront land is the highest priced and much more expensive than inland property. Still, the cost of waterfront in Northern Belize is a bargain compared with prices out on Ambergris and Belize's other cayes and an even greater bargain compared with values elsewhere in the Caribbean.

It's possible to buy a sea-view lot for as little as US$30,000 or a small but turn-key casita in some of the development communities in the region for less than US$200,000. Also recently on the market was a seafront house in Sarteneja built to U.S. standards on 1 acre of land and listed for US$299,000.

Inland you can find larger properties suitable for farming. If this idea interests you and you're willing to dig deep and talk to the locals, you can find land for as little as US$1,000 per acre.

Belize Correspondents Phil Hahn and Jim Hardesty are working on a complete guide to living, retiring, and owning property in Northern Belize to be featured in the December issue of my Overseas Retirement Letter.

Stay tuned.

Kathleen Peddicord

P.S. Phil and Jim will also be joining us for our Live and Invest in Belize events in January 2015. Details are here.

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Maybe you've noticed that there are no foreign franchises, including no fast-food franchises, operating here in Belize City. That's a remarkable thing in today's world...until you remember that historically Belize City just hasn't been home to enough population to support a lot of trade. I understand that McDonald's is finally planning to open its first restaurant here. I wish them luck.

Some countries restrict foreign investment in retail activities. A non-Panamanian can't open a shop in Panama, for example, where retail is "protected." Professions such as doctors and lawyers are also restricted to Panamanian citizens.

One way to choose where to locate your business would be based on incentives. Many countries have free trade zones, for example, where you can bring stuff in, process it, and then export it tax-free. Panama has the Colon Free Trade Zone. Belize has several established zones but also allows you to set up your own free trade zone if you want. If you wanted to start some business that needed to be in a particular part of Belize (because of localized supply of materials or labor, for example), you could apply to establish your own free trade zone in that spot. Same in Nicaragua. In fact, if your interest is export—that is, an operation where you're not selling locally but would be creating jobs—you'll find that most countries offer benefits to help.

Another business incentive to consider is residency. Many countries offer residency visas to anyone interested in starting a business, thereby creating jobs, in the country. Colombia, for example, has an attractive and affordable start-a-business, get-a-visa program. The minimum investment requirement is only US$33,300. Panama has a business investor visa, too, but it, by comparison, requires you to invest at least US$160,000 and to employ at least three Panamanians.

Tourism-based businesses are often incentivized, and many countries have government agencies that are specifically focused on developing foreign investment in tourist-related activities—hotels, dive shops, whatever. In Nicaragua, for example, the group is ProNicaragua. The incentives are typically to do with taxes—a ten-year tax exemption, say, giving you a nice window during which you can reinvest proceeds in growing your business without having to skim anything off the top to pay your tax bill.

Kathleen and I left the States years ago to start a business in Waterford, Ireland. Why Waterford? Because that was one of three markets the Irish Development Agency (IDA) was focused on developing. By agreeing to base our business in Waterford, we qualified for both a reduced rate of corporate tax and cash incentives for every Irish employee we hired up to 15.

Those were nice perks, and definitely they were the reasons we chose Waterford. However, we had targeted Ireland based on bigger-picture agendas. We wanted to be in Europe, for personal reasons, and we identified Ireland as a low-cost place to operate the kind of business we intended to operate. Our first years running our publishing business in Ireland, our labor cost was less than half what it would have been in the States.

The easiest kind of business to operate offshore is a one-man (or -woman) virtual show. A consultant or a writer, for example, can run his business from the beach in Panama, the mountains of Argentina, or a country village in France.

If you intend a virtual business that requires staff, then, as with a bricks-and-mortar operation, some places make more sense than others and some places don't make sense at all. We don't recommend starting or basing a business in France, period, unless you just really want to live in France. As a doing-business choice, this country belongs at the bottom of any list (thanks to the cost of doing business, the labor laws, the bureaucracy, and the taxes).

Panama is perhaps the best place in the world to base a virtual business that requires staff. That's why we're in Panama City right now. When we decided to launch the Live and Invest Overseas business seven years ago, we knew we'd have to move from France. We chose to relocate to Panama because of its affordable English-speaking labor force, its business infrastructure (banking, Internet, etc.), and its jurisdictional approach to taxation. Organize your operation correctly, and you can run a business in Panama tax-free.

Once you've decided where to base your offshore business, your next challenge is to develop the infrastructure it will require. Where will you bank? How will you move money around to where it needs to be? How will you process orders? How will you and your staff get paid? The answers to these questions differ depending on what kind of business you want to operate and in what country you decide to base it.

Again, we chose Panama in part because we knew it provides the kind of infrastructure we'd need. Open up a Panama corporation, and you'll be able to open a Panama bank account to support without much trouble.

One key piece of the infrastructure we require for our business in Panama is a merchant account. When we launched the business, we weren't able to get one; however, after a couple of years and a track record, we were finally approved.

What did we do in the meantime? We used PayPal. We worried initially that this might limit our ability to sell. Would our customers find it odd that the only way they could purchase from us was through PayPal? Maybe it reduced our trade some; we'll never know. But it meant we were able to be in business and to build the track record, again, that we needed to be approved eventually for a merchant account.

The other big-picture item you need to address is employees. If I had to name just one reason why we chose to build our business in Panama rather than Europe, it'd be employees. Labor laws around the world favor the employee over the employer much more so than they do in the United States, and nowhere is this truer than in France. In the United States, you can operate on a hire-at-will, fire-at-will basis. As one U.S. attorney we used to work with put it, "You can fire someone because you don't like the color of his tie."

Try that in France. You can't fire a guy in France even if you've got video footage of him stealing from you.

Things are a little better for the employer in Panama. We've had to fire several people over the past six years, and, in each case, we were able to do it with minimal wear and tear. Bottom line, you pay them off.

The other thing to know about employees in some countries is that you pay them for 13 months of work every year. In Panama, for example, everybody gets one month of vacation each year...and a "13th-month" bonus equal to one month's pay. You just factor it into your cost of doing business...

Lief Simon

P.S. Today's essay is excerpted from Lief Simon's "Doing Business Offshore" presentation at last week's Global Asset Protection and Wealth Summit, in Belize City.

The complete audio recording of this talk, as well as every other presentation from the two-and-a-half days of this special event, are being edited and bundled to create our new Wealth Building and Diversification Kit.

You can reserve your copy of this everything-you-need-to-know-to-go-offshore bundle here now pre-release for 50% off the regular price. This discount remains in effect through Sunday, Nov. 2 only.

Continue reading: How To Qualify For Residency In Belize

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The rentals market in Cayo is thin. You can shop for weeks or longer and not find a place to rent that'd qualify as comfortable by North American standards. All the would-be retirees interested in trying Cayo on for size are competing for a relative handful of suitable rental properties. The demand for quality rentals is heating up.

At this week's Global Asset Protection and Wealth Summit in Belize City, developer Phil Hahn, with more than a decade of experience building in this country, presented a new investment offer that addresses this growing need. Phil has launched a phase of his riverside Carmelita Gardens community where he is building a cluster of turn-key rental units to be known as "The River Club."

Carmelita Gardens is a planned sustainable development where every house will be self-sufficient through the use of alternative energy and rainwater catchment systems. This is the first master-planned off-grid development in Belize, and it's not just the off-grid element that makes the community sustainable. Carmelita Gardens has been planned to include communal gardens and orchards so that every homeowner can grow his own food if he'd like. You could farm and garden all day every day if you wanted and live completely off the land...or you could be a "weekend gardener," growing some fresh vegetables to complement your weekly visit to the grocery store. It's up to you.

Having a mile of river frontage gives residents at Carmelita Gardens access to water activities, as well as a nice breeze to help cool things off on hot days. Now, along the river, on one of the river village lots, Phil has decided to build a group of 15 cottages intended specifically to serve as rentals.

These one-bedroom, one-bath River Club homes will help meet the need for rentals both in Carmelita Gardens and the greater Cayo region. Many owners at Carmelita Gardens are starting construction of their houses and need places to stay when they visit to check on progress. Some would prefer to live on the property full time while their houses are under construction. Right now, only one of the handful of finished houses at Carmelita is available for rent, and it's full much of the time.

Elsewhere, options for accommodation are mostly US$250-a-night jungle resorts and lower-end hotels and hostels. The new eco-rentals at Carmelita Gardens will fill the gap and offer an upscale, comfortable place to stay for a reasonable cost.

In theory, you could live in one of these 512-square-foot River Club cottages; however, they have been designed as rentals and with the investor in mind. They will be built using the same sustainable technology as all other structures at Carmelita Gardens, including solar electricity, treated catchment water systems, and eco-friendly septic. Each unit will come fully furnished and with appliances installed, ready to rent.

Of the 15 units available at River Club, 7 have been reserved. The remaining units start at US$76,500. Property management will be in place, and projections are for cash flow to begin within 18 months.

Based on current and expected demand and assuming a reasonable nightly rate, the projected annual yield from these units is 10%. Plus, owning one of these River Club units would give you a ready place to spend time in one of the world's most appealing get-away-from-it-all destinations.

If that's something that appeals to you...and you're in the market for a good rental investment opportunity...I'd recommend following up on this quickly. As I said, inventory is limited.

For more information on Carmelita Gardens and The River Club, you can get in touch here.

Kathleen Peddicord

P.S. We've been recording every presentation of this week's Global Asset Protection and Wealth Summit, including Phil's on his new River Club investment opportunity. Even if you couldn't join the group in Belize, you don't have to miss out on all the intelligence, recommendations, advice, and strategies being shared.

These audio recordings will be edited and bundled to create our first-everWealth Building and Diversification Kit available pre-release for 50% off the regular price through Sunday, Nov. 2 only. Details are here

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That was the starting point for Lief Simon's opening remarks Wednesday morning. These meetings in Belize City this week are not about woe are we. These meetings are about solutions, strategies, and opportunities.

How can you survive the ups and downs of today and tomorrow, of markets, economies, currencies, and political regimes, when you can't predict them and you sure can't control them?

Spread yourself around so that you're not at the mercy of any one of them, so that no particular down is fatal for you. It is the only sensible course of action, elegant in its simplicity but intimidating, too, when you're standing at the starting line.

You've read about this idea before, I'm sure. It's often referred to as the "Five Flags" strategy. In fact, it can translate as six or seven flags or maybe only two or three.

I couldn't tell you what level of diversification you require. That depends on your circumstances and your agendas. Big picture, the objective is to disperse your assets, your investments, your business, and your lifestyle across borders so that they're all as insulated as possible from outside threats. How far and wide should you spread? That depends on how much you've got and what you ultimately want to do with it.

That said, Lief made one universal recommendation yesterday morning out of the gate:

"The easiest and best way to get started at this," he told the crowd in Belize City, "can be to open a bank account in a different country. This is a low-key, no-risk first step that will allow you to begin to get your bearings in the offshore arena and that will facilitate further steps toward realizing your ultimate diversification strategy, whatever that evolves to be."

Lief then, with the help of one of our favorite offshore bankers, a professional with more than 30 years' experience managing and directing banks in Europe, the Caribbean, and the Americas, walked the group through the thinking that should go into choosing where to take this first step.

That is, where should you think about opening a bank account offshore?

It depends on why you want the account.

If you're planning to relocate to a new country, then you need a personal operating account in that country, this to facilitate paying local expenses. Likewise, if you make an investment in rental property in another country, you'll want an operating account in that jurisdiction. Otherwise, you'll be reduced to withdrawing money from the ATM and then going with cash to the electric company to pay your bill each month.

If you're forming a corporation or starting a business overseas, you'll need a bank account to support it, again, in the country where the corporation is operating.

The other kind of account you might want offshore is an investment account. This can be a place to park capital, an opportunity to earn dividends, and a means to investing more globally than may be possible through your U.S. investment account.

If you're opening a bank account offshore for practical purposes (because you're planning to live, own property, or run a business in that place), then the "where" is straightforward. Not so if you're interested in opening an investment account offshore. In this case, the where is dictated by the bank's minimum investment requirement, fee structure, and customer service, as well as by things like whether the bank makes it possible for you to send an international wire transfer without visiting a branch in person and whether it provides debit and credit cards for the kind of account you're thinking of opening.

In this case, the where can also come down to: Which bank will open an account for you?

In this post-FATCA age, it is harder than ever and harder all the time to open an offshore bank account, especially if you're an American. Lief and his colleagues made specific recommendations for banks that are still interested, FATCA notwithstanding, in working with Americans, then detailed the requirements and the processes for opening accounts with them.

This week's program has been built around a series of panel discussions conceived on the Five Flags strategy and intended to help those assembled think through their own global diversification plans with the help of pros with many, many years of experience at this.

First flag, banking...next flag, residency...

More from the scene tomorrow.

Kathleen Peddicord

P.S. Of course, we're recording every presentation, including the series of Five Flags panel discussions so that, even if you couldn't join the group in Belize, you don't have to miss out entirely on all the intelligence, recommendations, advice, and strategies being shared.

These audio recordings will be edited and bundled to create our first-ever Wealth Building and Diversification Kit.

While Lief Simon's Global Asset Protection and Wealth Summit continues in Belize, we're making this new program available pre-release for 50% off the regular price. Details are here
 

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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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