Live and Invest Overseas By Kathleen Peddicord

Why Panama Is The Best Place In The World To Base Your Business

May Day, 2013,Panama City, Panama: Panama offers many important advantages for the entrepreneur running an international or laptop-based business.

Dear Live and Invest Overseas Reader,

You make three decisions in life that matter. You choose what to do to support yourself. You choose who to come home to at night (or maybe you choose to come home to no one...fair enough). And you choose where to come home.

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Property Rush In Grenada Ahead Of New Invest For Citizenship Program

Aug. 16, 2013, Panama City, Panama: Grenada has bounced back from their position on the money-laundering blacklist, as a compliant, economically stable Caribbean investment destination.

Dear Live and Invest Overseas Reader,

Grenada's new government is expected to revive its "Citizenship By Investment" program before summer's end. The island is struggling with debt and hopes the program will create some much-needed cash flow. 

 

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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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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.

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Meeting With Panama President Varela On The Azuero Sunset Coast

Nov. 28, 2014, Azuero Sunset Coast, Panama: Panama President Varela’s administration is interested in developing the western coast of the Azuero peninsula.

Dear Live and Invest Overseas Reader,

Living overseas you never know who you might run into. Over the years, Kathleen has met the presidents of two countries—the president of Ireland when we were living there and President Bolanos of Nicaragua when we were managing a real estate development project in that country while he was in office.

This week, we both met recently elected President Varela here in Panama. While we live in the same building as the president in Panama City, it took an official presidential visit to the district of Mariato on the Azuero Sunset Coast where our Los Islotes development community is located for us to manage to meet the man.

The Panama government, under Varela, has taken an interest in the western coast of the Azuero Peninsula. Historically, all attention has been paid to Azuero's eastern coast. As far as we know, this week's state visit to Mariato was the first-ever to that part of this country. 

We've been working away in the background on our Los Islotes project for six years, minding our own business, following the rules, and doing our best. Now, it seems, we, and this region, are attracting attention.

Specifically, the Panamanian government is talking about implementing a road project that was commissioned and approved years ago. The previous president didn't pull the trigger for some reason. This new road, though, would be an enormous boom to the region and to Los Islotes in particular. At the moment, to get from the surf breaks at Los Islotes to the world-renowned, Billabong-endorsed surf breaks at Playa Venao, you have to drive back up to the Panamerican Highway, over to the other (eastern) side of the peninsula, and then back down. That drive takes about five hours. Connecting the two sides by road at the bottom of the peninsula would create a ring allowing tourists, surfers, and locals to make a continuous trip around the peninsula. It'd also mean that Los Islotes would be less than an hour from Venao, a nice advantage.

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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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