Articles Related to Offshore banking

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 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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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, 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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To understand why diversifying in this way is so important given the world we live in, consider Argentina. Over the last century, Argentina's economy has been a roller coaster, with wild ups and downs to do with inflation, currency restrictions, price freezes, and other economic woes and complications. A friend, an Argentine, helped to put Argentina's situation into perspective when he told me once, "In my lifetime, 13 zeros have been knocked off my country's currency.

"You are an American," he continued. "You haven't had to live through the experience of watching your currency be devalued like this.


Thanks to this long experience with economic and political instability, any Argentine with any excess cash sends that cash to another country. He takes it offshore.

Holding at least some of your cash in a bank in another country is a more and more sensible idea all the time no matter who you are or what country's passport you carry. Argentines have this understanding bred into them. Cypriots acquired it the hard way last year. Most Americans think this is a lesson they don't need to learn. Americans tend to take for granted that the government will continue to bail out banks to keep the U.S. economy from collapsing. 

For some reason, the U.S. government thinks that it's okay to continue to increase its debt as long as the output of the country is growing faster than that debt. Maybe I missed that in my Econ101 class as a strategy for long-term stability.

Recognizing the reality of the current fiscal state of the U.S. government, where would the money come from to bail out U.S. banks from another crisis? More to the point, why would you, as an investor, as a citizen, choose to sit around to find out the answer to that question?

Whether you believe it's possible the U.S. government could implement a "one-time tax" as they did in Cyprus or not...whether you think the liquidity ratio of your banking system is adequate or not (it likely isn't)...whether you're worried about currency controls or should have some of your money, at least part of your nest egg, sitting in another jurisdiction.

That is to say, the first, easiest, and most pragmatic step everyone should take for going offshore is to open a bank account.

For us Americans, thanks to FATCA and the related new IRS rules for foreign banks to comply with FATCA, it is getting harder and harder to take this simple step. The unfortunate reality right now is that many banks around the world won't open an account for a U.S. citizen. Some will, and I suspect that more will accept U.S. clients again after they have had a chance to sift through the FATCA mess.

Meantime, again, despite everything that is going on right now, it is not illegal for an American to have a bank account offshore. 

However, as an American with a bank account offshore, you end up with reporting requirements. At a minimum, you have to indicate on Schedule B of your Form 1040 that you have an account offshore. If you have more than US$10,000 in aggregate in financial accounts offshore, you'll also have to complete the Foreign Bank Account Report. If you live in the United States and have more than US$50,000 (US$100,000 if you file a joint return) in foreign financial assets (which includes bank accounts), then you'll also have to complete Form 8938.

That all may seem complicated, but it isn't. It's not difficult. It's paperwork. And, as intimidating as it can seem at first, I beg you:

If you're an American, don't let the growing compliance concerns and expanding restrictions scare you away from opening the offshore bank account you probably should have. The downside risk is too great and growing. Whether it's the U.S. economy, the collapse of the dollar, another U.S. banking crisis, or some other right-now-maybe-unnamable calamity, you need to diversify. It is the only way to take control of your future and to protect yourself and your family long term.

A bank account is the first step, but there are others you can consider. 

Lief Simon

Editor's Note: Lief and over a dozen of his most trusted asset protection and wealth management experts are on the scene at Lief Simon's Global Asset Protection and Wealth Summit this week in Belize. We'll continue our live coverage over the coming few days, including more from Lief on how you can get started on your own global diversification plan.

Meantime, we're recording every presentation at the event. That includes all five of the comprehensive Getting Started Education Workshops, as well as over two dozen individual sessions. Altogether, the entire library of recordings will be bundled to create our new 2014 Wealth Building and Diversification Kit. Watch this space tomorrow for more information on how to reserve your copy for over 50% off. 


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First, what does it mean, “go offshore”?

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.

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 the Offshore Summit we’re planning for November. Also presenting will be top offshore banking experts and advisors, who can help you to formulate your own offshore banking strategy.

As I said, “going offshore” 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.

We aren’t yet ready to take registrations for this final Offshore Summit of 2013 taking place at the Veneto Hotel in Panama City. However, you can register your interest and be on the list to take advantage of special discounts and VIP attendee benefits here.

Kathleen Peddicord


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April 22, 2013:

"Kathleen, to whom should the two original credit reference letters with original ink signatures, necessary for obtaining a pensionado visa in Panama, be addressed? To the Panamanian government? To a bank? To "To Whom It May Concern"?

"I'm having to jump through more than a few hoops as my banks don't write originals or sign with ink!

"Should both letters be notarized in my current state of residence? The FBI report as well?"

--Libby H., United States, Panama Letter Subscriber

Panama Letter Editor David Sexton replies:

"To Whom It May Concern" should be fine, and getting these documents notarized is a good idea.

Also, remember, you must have your FBI report authenticated at a Panamanian consulate.

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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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