Articles Related to Joel nagel

"Why make it so complicated? In fact, my objective is to simplify. However, I'm balancing simple against two other overriding agendas—mitigating taxes and planning for probate.

"The piece of property we own in Croatia, for example," Lief continued, "is held in our own name. This is for tax purposes. You have no capital gains tax liability in Croatia when you sell real estate you've owned for three years or longer, as long as the property has been held in your name. If it's been held in a corporation, you are liable for capital gains tax whenever you sell.

"In other cases, holding a piece of property in a corporation is the best choice for local asset protection or local probate," Lief told the group. "Again, it just depends. There's no one-size fits-all structure strategy."

"Yes, exactly," Joel interjected. "Moreover, not only is there generally more than one right way to structure your holdings, but there are also, in every case, many, many wrong ways.

"In any conversation on this topic, there are competing agendas. The real estate agent you're working with for a property purchase, for example, his agenda is straightforward. He just wants to close the deal. So he'll recommend the quickest-possible way to take title. That won't necessarily be the best way for you. What makes sense for you, as Lief suggested, is the strategy that balances tax liabilities with estate-planning and asset-protection benefits."

"Here's the place to start this thinking," Lief picked up.

"Start by assuming that maybe you don't need a structure at all.

"I have a great story for this," Lief said, "that I've been writing about for a couple of years. The woman whose story it is got in touch recently to say that she was going to start charging me a royalty every time I retold her story.

"She was kidding, I think, so here goes...

"Years ago, this woman made a trip to Panama because her friends told she should check it out. Her friends also told her that she needed a Panama corporation...that she 'had to have' a Panama corporation. So, when she traveled to Panama for vacation, she set up a Panama corporation.

"I met her three or four years later at a conference. Her first question to me was, 'What should I do with this Panama corporation I set up four years ago?'

"'Dump it,' I told her after talking through her current situation. She had no need for a Panama corporation and never had. Why pay the annual fees to keep it current? There was no point.

"Which is why, again, I say: Start with the goal. Have an objective in mind and then set out to find the structure and the jurisdiction that meet it. Don't put the cart before the horse.

"I started doing this 17 years ago," Lief continued. "I didn't know a lot 17 years ago. I've learned by doing, which means I've made mistakes. I've got some structures I don't need and some others that aren't optimized. I've been working for the past few years to clean things simplify.

"If I could go back 17 years and give myself one piece of advice, it would be this:

"Try to think long term. It's hard when you're starting out, and harder, too, the younger you are. With decades of living and investing ahead of you, how can you predict objectives or challenges? You can't really, so you have to stick with the very big picture.

"Start by having a conversation with yourself, your spouse if you have one, and your attorney. Talk through what you're most concerned about, what you're trying to avoid, and what you're trying to build. Are your heirs a priority? Or is your priority a concern over someone slipping on the stairs in one of your rental properties and suing you for everything they can get their hands on?

"Try to think as much of this through as you can from the starting line, especially when forming entities to hold property you're purchasing overseas. It's possible to retitle a piece of property, into the name of another or a new entity, but retitling comes at a cost. Transfer fees can range from 1% to 10%. It's not as simple to retitle property overseas as it can be in the United States. And it definitely can get expensive..."

Kathleen Peddicord

P.S. Together, Lief Simon and Joel Nagel walked attendees at last week's Global Asset Protection and Wealth Summit through the details and particulars, pluses and minuses of offshore structures. Should you form a LLC...a foundation...a trust? How do you choose which structure suits you best and which jurisdiction connects with your situation and objectives?

Lief and Joel made specific recommendations walking through sample cases. If you weren't able to join them in the room in Belize last week, don't worry. You can still access the intelligence, recommendations, advice, and strategies that were shared.

The audio recordings from this special event, including Lief and Joel's complete discussion on "Choosing The Offshore Structure That's Right For You," are being edited and bundled to create our new Wealth Building and Diversification Kit, which I'm happy to be able to make available to you pre-release for 50% off the regular price through Sunday, Nov. 2.

Continue reading: Living In Waterford City Versus County Kilkenny Or Galway, Ireland


Over three days last week in Panama City, Lief Simon led discussions with the world's leading offshore tax, banking, asset protection, investment, and business experts to help attendees at our Offshore Summit understand how to navigate and prepare for what lies ahead. What's coming down the tracks.

In fact, though, the truth is, what's coming is already upon us.

Saturday morning, Lief and I traveled with a group of 18 from the conference out to Los Islotes, Lief's development-in-the-making on Panama's Pacific coast. We had a great time showing our new friends around (I'll tell you more about our adventures out on the Azuero Sunset Coast tomorrow). When we returned to Panama City late this afternoon, I downloaded e-mails and found the one I reference above from a friend.

"How do I find out if my bank in Colombia is going to comply with the coming regulations?" asked an attendee at last week's conference.

"What transactions will be subject to the 30% withholding? ATM withdrawals?" wondered another.

The unfortunate reality is that no one knows the answers to these questions. What we do know is that the global banking and financial landscapes are changing. For all of us. I wouldn't say for the better. More restrictions. More hassle. More cost. Fewer options. What can you do?

First, understand what's coming and the potential implications. Joel Nagel, one of the best-schooled attorneys in the world on these issues, tax attorney Chris Bauer, tax advisor Tom Rowley, and Lief Simon spent a lot of time this past week talking through the facts, the consequences, and the strategies for positioning yourself to prevail in the face of them.

Second, diversify. That's the key. It's a necessity of the world we're living in.

But...diversify? What? Where? How?

Those were the big-picture topics of discussion this week in Panama City. As you know, we recorded every one of them—every presentation, every panel discussion, and every question-and-answer session. Our team is editing these recordings now. While that work is in process, you can purchase a pre-release copy of this new Offshore Self-Preservation Kit for more than 50% off the retail price. More details are here.

Kathleen Peddicord

P.S. It's the tail end of the rainy season here in Panama, but we enjoyed a day of glorious sunshine out at Los Islotes yesterday. The hills and mountains all around were a blanket of green, thanks to the rains of the past several months, and the Pacific Ocean offshore from them was blue, glistening, and crashing. Our son Jackson and friend Alexandra played in the surf while we grown-ups walked the beach, planning, imagining... As soon as this rainy season concludes, we're ready to start moving dirt. More tomorrow..

P.S. What else this week?

  • I'm reviewing and clarifying my ideas related to the Five Flags theory of diversification in preparation for my opening remarks tomorrow at this week's Offshore Summit in Panama City. If you're new to the idea, the "Five Flags" are to do with residency, citizenship, banking, assets, and business. Not everyone needs all five flags planted in different jurisdictions, but the goal should be to plant whichever ones you do need in different jurisdictions. Moving to another country and taking all your cash, investments, and business activities with you to that new country doesn't achieve the real goal of going offshore.

Fortunately, different countries shine for different reasons. Some are better for banking, others for investing, some for residency, and yet others as places to incorporate your business. No country gets A ratings on all fronts. Panama is one country that gets close...

  • As promised, at 8 a.m. Wednesday morning, Lief Simon took center stage in the meeting rooms of Panama City's Veneto Hotel to begin leading discussions that will continue over the coming three days. The topic?

Options and opportunities for diversifying your life, your assets, and your future.

"You understand the realities we're facing right now," Lief began, "thanks to the so-called Patriot Act, the HIRE Act, FATCA, and the coming 30% withholding that's going to be imposed on any U.S. person trying to transfer money to what the IRS deems a 'non-compliant bank.'

"There was even, recently, legislation proposed that would have made it possible for the IRS to take away the passport of any U.S. person it accused of owing US$50,000 or more in back taxes. The IRS wouldn't have to prove the accusation...just make it. And the American in question would find himself without a passport..."

  • This week's Offshore Summit has been organized around a series of panel discussions, one for each of the Five Flags being considered.

Yesterday morning, Mark Nestmann, one of the world's leading experts in offshore residency and second citizenship, led a panel discussion related to choosing where you might want to establish foreign residency or obtain a second passport and the particulars for how to go about it. Mark detailed nine criteria to consider when shopping for a place to establish a second, "back-up" residence and discussed the top choices today for second citizenship (by ancestry, residency, or investment).

Then, yesterday afternoon, five gentlemen took the stage--Joel Nagel, Tom Rowley, Chris Braun, Mark Nestmann, and Lief Simon--with, among them, nearly a century-and-a-half of experience helping Americans abroad address, manage, and mitigate their global tax obligations. These five guys are the heaviest hitters you'll find in this arena. Having them on stage, together, to answer attendee questions for an hour, was, alone, worth the price of admission...

  • Perhaps the most important thing to understand about the offshore world, as the speakers at this week's Offshore Summit in Panama City are reminding those assembled again and again, is that it's forever changing.

Tax laws and treaties, residency visa requirements, opportunities for obtaining second citizenship, documentation required to open a bank account, currency controls and exchange well as the political and the economic landscapes jurisdiction to jurisdiction...all these things change all the time.

Unibank, a Panama City bank that we've been recommending as a good choice for foreigners looking to open accounts in Panama, decided two months ago that it would no longer accept foreign clients who haven't been resident in Panama for at least two years...

I just got back from the beach, and I wish I could turn my car around and go back to where I just came from. Coronado, only about an hour outside Panama City, is what I'd consider the most turn-key, most expat-ready ocean-front lifestyle available in Panama. Foreign retirees living in Coronado have already paved the way, leaving you little to do for yourself to create a familiar, comfortable, English-speaking atmosphere.

It's fear of the unknown that keeps many people from making the move overseas. In Coronado you can rest assured you'll find like-minded folks, all living out their dream retirements on the beach, ready to mingle and welcome new neighbors.

I arrived in Coronado on a quiet Friday afternoon. Residents of the area were out at lunch, busy shopping in the new El Machetazo (the closest thing to a Walmart here in Panama), or lounging by the beach. The sun was shining, not yet allowing the dark, rainy season clouds to push their way into town. Four vendors had set up shop at the entrance to the community, selling everything from bunches of assorted flowers to plantains, tomatoes, pineapples, and garlic. Trucks were loaded with fruits and vegetables.

I'd hoped for a weekend like this, calm and quiet. Holiday weekends can see loads of families from Panama City flocking to their vacation homes on the beach, crowding the grocery store parking lots and filling up the restaurants. For many years, that was Coronado's main purpose, to serve as the vacation getaway and weekend home for those who could afford a retreat outside the capital. Over the past few years, though, as Panama City has grown busier, dirtier, noisier, and generally harder for many retirees to take day-to-day, Coronado has transformed into a full-time retirement community...


"Capital moves where it's treated best. For a long time, capital has been treated pretty well in the United States. And lots of foreign investors have taken positions as a result. Now they're taking their money and going elsewhere.

"Americans, like those of us in this room today, who are paying attention...they're moving their money, too. They...that is, we are looking for places to take our capital where it will be treated better.

"The FATCA legislation was signed into law by President Obama in March 2010 at 12:01 a.m. No Rose Garden ceremony. No signing celebration. No one realized what was going on until it was too late.

"And, still, today, 2 ½ years later, no one has taken credit for drafting Section V of the HIRE Act, where the FATCA legislation is to be found. No one knows who wrote this language, but my guess is that it was not written by any congressman. Sections of this law are too sophisticated, too smart to have been written by your typical politician. This law was drafted by someone who knows how the offshore world works.

"Playing the thing out, you realize that it is no longer going to be possible for any financial institution anywhere in the world to work with Americans in the dollar world without becoming compliant according to the new IRS requirements. Banks have three choices.

"They can refuse to comply and stop dealing in the dollar world.

"They can refuse to comply and stop working with Americans.

"Or they can comply.

"Some banks are already making their decision. Every week, more banks around the world are deciding that the way out for them is to kick out all their existing American clients and not to allow any new ones.

"However, I predict that, over the next five years, most all banks worldwide will decide to comply. I don't see any other practical outcome.

"If we could believe that this FATCA legislation were the end, well, then, ok, we could figure out how to navigate the new global fiscal landscape...and move on with our lives.

"But I don't think there's any reason to think this is the end. I believe this is the start. The start of capital and exchange controls in the United States that are going to have an enormously negative effect on that country's future..."

Joel was followed by another tax expert, Mark Nestmann, who took the podium, faced the audience, and explained, simply:

"The United States is waging an offshore tax vendetta.

"You think you're compliant in your reporting to the IRS? Wait two months. Chances are, if you are compliant now, you won't be then.

"I believe this is intentional. The IRS is working consciously to create fear among Americans, to scare them into thinking that offshore activities are wrong...bad...illegal.

"I'm here, along with all my fellow speakers and presenters over these three days, to assure you that they are not.

"Investing offshore, banking offshore, incorporating a business offshore...these things are all completely legal.

"All these things, though, now come with ever-expanding reporting requirements. I can imagine straightforward offshore structures that require six, seven, eight annual filings to the IRS. This is the price we Americans must now pay for the 'privilege' of investing offshore.

"It's hard to believe that this is anything but by design.

"Take out some Kleenex," Mark continued, "and I'll walk you through what you need to know to be compliant today.

"If you're an American, you want to be moving what you've got offshore. But you want to do it in full compliance with IRS follows..."

Kathleen Peddicord

P.S. "Who is that speaking right now?" Jackson came up behind me to whisper in my ear while Joel Nagel was up on stage addressing the group.

Young Jackson is here at the Emergency Offshore Summit with us this week. We've put him to work helping out some of our exhibitors.

"Everyone must be really interested in what he has to say," Jack observed. "The Exhibit Hall is empty. Everybody's in here..."

If you weren't able to join us to hear Joel, Mark, and our other expert speakers this week, don't worry. We're recording every speaker and every presentation, every question and every response over the three days of the event. While the conference continues, you can purchase the complete collection of recordings, which will be bundled to create our all-new Emergency Offshore Self-Preservation Kit, for a specially discounted pre-publication price.

When the final speaker leaves the stage Wednesday evening, this discount will be off the table. Meantime, you can take advantage of it here now. Continue Reading:


"Section 1474 refers to 'withholdable payments' to Foreign Financial Institutions that don't meet U.S. standards for information sharing. The law requires that any financial institution (U.S. or foreign) remitting any foreign payment to a bank in such a country withhold 30% of the amount of such payment and remit that percentage to the Internal Revenue Service (IRS) as a tax.

"A withholdable payment is defined as any payment of interest, dividends, rents, salaries, wages, premiums, annuities, compensation, enumerations, emoluments, and other fixed or determinable annual or periodical gains, profits and income, if such payment is from sources within the United States.

"On its surface, the withholdable payment is designed to ensure that pre-tax monies are not sent abroad without applicable U.S. federal taxes being paid. Looking a little deeper, however, the law does two things that go beyond the responsibility of each taxpayer to pay what he owes to the IRS.

"First, under Section 1474 of the bill, the law makes banks, as a third party, responsible for the enforcement of government tax policy. The banks are liable for the customer's tax obligation on transferred funds if they don't withhold the required 30% to cover any possible tax liability. The banks essentially become the tax police, working for the government as hammers to bring about individual compliance.

"Second, the same provision holds the banks harmless and indemnifies them if they improperly withhold the 30% tax when it is not due.

"So, if banks are third-party tax enforcers on one hand, and completely indemnified from improper tax withholding on the other, it is clear what banks will do. It would be difficult in any case for banks to determine the difference between a pre-tax remittance versus a post-tax payment. They will be inclined, therefore, to withhold 30% tax on all foreign payments to banks and countries that do not have what are considered 'information-sharing agreements' with the United States.

"The net effect of this provision will be to greatly discourage any financial transactions between U.S. banks and foreign banks not entering into information-sharing agreements with the U.S. government.

"To wire transfer US$100,000 to Panama, for example, to purchase a piece of real estate, one would have to agree to send US$142,000 so that a net US$100,000 would reach its destination. Who would be inclined or willing to pay 30% more in a global transaction to satisfy these requirements? Almost nobody.

"International payments beginning Jan. 1, 2013, will be subject to these new withholding requirements. The delay of more than two years is designed to force foreign governments (especially those in tax havens) to enter into agreements with the United States, as Panama is in the process of doing now.

"In addition, the law will put extreme pressure on individual foreign banks to enter into private-sector agreements with the IRS to disclose all U.S. account holders or risk having all U.S. transactions to or through their individual bank subject to 30% tax withholding.

"In addition to those intended effects, I believe the new law will have two unintended consequences, as well. First, both U.S. and non-U.S. persons fearing how the implementation of the new law will impact them after Jan. 1, 2013, may be inclined to move assets outside the United States before the effective date, meaning we could see significant capital flight from the United States in the next six months.

"Foreign financial institutions may drop U.S. clients as one way to avoid being subject to the 30% withholding requirement, as well as avoiding the U.S. regulatory compliance costs (again, probably an intended consequence of the law). These compliance costs to worldwide bankers have been estimated by the Swiss Banking Association to total nearly US$40 billion annually, while the measure is projected to generate only around US$8 billion to the U.S. Treasury in increased taxes.

"Additionally, foreign financial institutions and foreign private-sector interests may simply stop conducting their business in dollars. A dollar-denominated transaction will ultimately pass through a U.S. Federal Reserve Bank and potentially subject the transaction to the risk of a U.S. bank levying a 30% withholding tax on any payment.

"One method for foreigners to ensure that this would not happen would be to designate the contract in a currency other than U.S. dollars. So if a German businessman, for example, contracts with his Japanese counterpart to do a deal to sell equipment in China, the best way to ensure that the transaction would not be subject to U.S. withholding tax would be to designate the contract in euro, yen, won, or any other currency than dollars. Those currencies would not pass through a U.S. Federal Reserve Bank and therefore would not be subject to the backup tax regime.

"Russia and China have already announced that they will no longer be doing trade transactions in U.S. dollars but rather in their own currencies. The two countries indicated that there was too much risk in using the dollar for their trade.

"As more global transactions (especially oil, gold, and other commodities) are done in non-dollar currencies, the global demand for the U.S. dollar will decrease. If you follow this thinking through, you see how it is very likely that the U.S. dollar eventually, perhaps sooner than later, will no longer be the world's reserve currency. As demand decreases, the value of the dollar will surely fall as well. So while exchange and private capital controls may well have been envisioned in the HIRE Act, additional unintended consequences of immediate capital flight and long-term devaluing of our currency through simple supply-and-demand manipulations were probably less well-considered.

"It is unlikely that even a new President in January 2013 will undo the effects of this damaging legislation. For individuals, there exists just less than six months to plan for the new law and to take steps to avoid the consequences, both intended and unintended."

Kathleen Peddicord

P.S. Joel Nagel will be joining us in Panama City in August for our Emergency Offshore Summit, during which he and the more than two-dozen other offshore experts we've invited to join us for this important and timely event will detail the best options and opportunities for taking your assets, your business, your investments, and yourself offshore.

As Joel explains, you have six months remaining to get your financial house in order for the changes that are coming.

As of this writing, a handful of VIP places remain available for our Offshore Summit. And the Early Bird Discount is still in effect (it expires July 6).

Full details of the program we've planned are here.Continuing Reading:

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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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