How To Start A Business Overseas

Mobile And Global

June 12, 2011: Jobs are harder and harder to come by in the United States, but opportunities abound for the entrepreneur overseas.

Also This Week: No Hype--You Can Retire Overseas This Year No Matter What Your Life Looks Like Right Now...How To Retire Overseas Questionnaire...La Belle Et La Bete Three Years On...Corruption Free?...

Dear Overseas Opportunity Letter Reader,

You know all those millions of jobs lost in 2008, 2009, and 2010? Many of them didn't disappear. They're resurfacing today...online.

You can find them if you know how to look...and you can fill them anywhere on earth you can get an Internet connection.

I know publishing. Starting 26 years ago, I made a business of the old-fashioned kind of publishing, with envelopes and stamps. Today my business is virtual.

Today, publishing companies (like mine) may need the services of a copywriter or a particular editor only once or twice a month. They don't want, therefore, to be liable for a full-time salary and the associated employer taxes, health benefits, vacation time, work space, etc. Easier and cheaper to find a freelance worker with the required skills.

This is one small example. The reality today is that there are opportunities like these awaiting entrepreneurs almost everywhere in the world. You can turn a hobby into an income and become part of the new mobile, global workforce. You can approach this low-key, with nothing more than a laptop, or more ambitiously, with the idea that you want to build a business, with a base and staff, to generate the income you need to live the life you want.

I had a friend in Poland years ago who learned that Burger King was going to open up shop there and needed warehouse space for its supplies. My friend bought a warehouse. Burger King became his client. In time, he expanded his storage business to include other clients and other products...and he made a nice living for himself.

Another friend noticed how few coffee shops existed in Warsaw. (This was 15 years ago, before Starbucks came to this town.) My friend found a local roaster to roast the coffee beans and then packaged them himself. He set up a combination retail and wholesale operation that was bought by another larger one. That company is still going strong.

Some of the best overseas businesses start like these two--organically. You show up, discover a market niche, and find a way to fill it.

Others can be more pre-planned.

About four years ago, I took early retirement from the company where I'd worked for nearly 23 years. Six months later, I realized that retirement didn't suit me. I liked being in business.

For me, the question wasn't, what business might make sense? (I enjoyed the business I'd already spent 23 years learning how to practice.) For me, the question was, where best should I base the business I want to launch? (Panama stood out as the obvious choice.)

What could you do?

• A laptop-based business (consulting, copywriting, travel writing, photography, programming, even bookkeeping, for example) is the easiest to launch overseas and allows you to work from almost anywhere in the world...

• Online publishing...

• A franchise can be an easy way to hit the ground running with a business model, strategy, branding, marketing, and support already in place...

• A tourism-based business--a bed and breakfast, a dive shop, a bar, restaurant, ice cream shop, wine store, souvenir stand, etc....

• An expat-based business anywhere there is a decent-sized expat community gives you a chance to provide a product or service you (and your fellow expats) miss from back home...

• A niche store...because one of the big advantages of being someone from the developed world looking to start a business in the undeveloped world is that lots of unfilled niches will occur to you quickly...

• Real estate is the business that many expat entrepreneurs gravitate toward. You bring an understanding of the efficient real estate market to places where the real estate markets are typically anything but...

• Import/export...

• A business geared toward the locals...like my friend who started the coffee business in Warsaw. He translated a developed world idea to a developing marketplace full of virgin consumers...

• Farming or wining...

Three-plus years on with my own overseas start-up, I can tell you that it's not easy. But I don't regret a single day of it. In fact, my only regret is that I didn't start sooner.

We've had the time of our lives building what today is a well-established, fast-growing operation with an eclectic international staff and a big upside.

In the current climate, as jobs are harder and harder to come by back in the States, where downsizing has become a cliché and new graduates wonder what in the world they're going to do with their new degrees...

I offer that the question isn't, what in the world are you going to do to support yourself and the life you want...

But where in the world.

Kathleen Peddicord

P.S. We've included a special Workshop focused on starting a business overseas as part of our Retire Overseas Conference taking place in Orlando in October. Details of that program are here.

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Panama Without The Sugar Coating

No marketing hype, no rose-colored glasses.

That's the promise of the Panama Letter.

Panama is right now the world's top retirement, investment, offshore, and doing business haven. To get the most out of this little country with such an abundance of upside right now, and to determine which opportunities might be right for you, you need to know the full story. You need to understand all the facts, straight, complete, and current.

This is Panama without the sugar coating. From a team of expats, investors, and businesspeople with, together, many decades of experience spending time and making money in the Hub of the Americas.

Go Here Now For The Full Details.

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P.S. What else this week?

• You can reinvent your life...start over...enjoy the lifestyle or the retirement you've been dreaming about...this year...no matter what your life looks like right now.

No matter how big (or small) your budget...

No matter your age (you're neither too young nor too old...I promise)...

No matter what else is going on in your life right now (there is no "right" time)...

No matter if you need to continue to earn a living (you can)...

No matter your family circumstances (whether you have school-aged children or parents you're responsible for)...or what your kinfolk think (let them call you crazy)...

No matter your concerns, your fears, your uncertainties...

For years, I day-dreamed about what life might be like in some exotic, foreign clime. From the age of 21, I travelled regularly, all over the world...but, for 14 years, I returned home and rationalized a reason to stay there.

We all need a little push, something to get us started. Once you take the first step, the second is easier, the third easier yet, and soon you have that glorious thing called momentum helping to pull you along.

In my case, the little push came from my employer at the time. The international publishing company I'd been working for nearly 13 years wanted to open an office in Ireland, to take advantage of the business and tax incentives that the Irish government was offering back then. The opportunity presented itself...and, finally, I found the courage to jump.

Today I recognize that one reason I was able to leap when I did was because I had no idea what I was getting myself into. I'd been researching and writing about living overseas for years, yes, but research isn't the same as reality. When my husband and I packed ourselves, our daughter, and our eight oversized suitcases into the SUV that day in Baltimore and made our way to the airport for our overnight flight to Shannon, Ireland, we didn't know what we didn't know. And that was probably a good thing.

In the 13 years since, we've reinvented our lives from Baltimore, Maryland, to Waterford, Ireland...from there to Paris...and then, most recently, we re-launched ourselves again in Panama City, where we've living now. Along the way, we've started businesses, made homes, and raised our children (one of whom was born in Ireland)...

Frankly, we've probably done just about everything you could imagine doing as part of your new life overseas. We've bought, built, renovated, decorated, and sold houses. We've bought, flipped, and developed land. We've shipped personal belongings, antique furniture, and pets. We've qualified for residency, opened bank accounts, even acquired second passports in Ireland...

Did we ever imagine way back then that, 13 years later, we'd have travelled from Waterford, Ireland, to Paris, France, and then on to Panama City, Panama, where we'd be living, running a business, and sending our 11-year-old son to school?

No way. We had no idea when we took that first step down our own adventures-overseas path where it would lead.

And I can't tell you now where your adventures overseas will lead you. But I can say with confidence that the only thing you'll regret about them is that you didn't find the courage to launch them sooner.

I can also tell you that no matter what your reservations...they can be addressed and overcome. This idea is infinitely customizable.

Here in our Panama City office this week we are finalizing the plan for the Retire Overseas Conference we're holding in Orlando, Florida, Oct. 14-16. Putting together the details of this program, I'm getting very excited.

Over these three days in Orlando, I'm going to prove to you, with the help of over 30 friends, expats, experts, and colleagues convening from all across the globe, that you really can reinvent your life to be whatever you want it to be...no matter what it looks like right now.

This Retire Overseas Conference isn't about hype. This is about where and how.

Where and how to...

• Before you can begin to consider where best you might relocate overseas, you've got to get to know yourself better. What's important to you? What things would you miss from your current life if they weren't part of your new one?

What services, amenities, niceties, and distractions could you not live without? What hassles, hurdles, frustrations, and difficulties would you find intolerable?

For example...

• After living in Spain, close to Barcelona, for seven years, we (my husband, two children, and I) decided it was time to try out a different country...to make a change...to shake things up a little," writes Euro-Editor Lucy Culpepper in the Forward to her new 'Live and Invest In France' manual.

"So we set off on a home-seeking tour of Mexico, Panama, Costa Rica, and the United States. We were in search of a country that would check as many boxes as possible on our long wish list.

"After almost eight months of travel and change, we decided that some but not enough boxes had been checked off by each country we'd spent time in. Furthermore, thanks to our travels in Central America, we came to a slightly unexplainable realization: We wanted to return to Europe.

"But where in Europe? Not the UK (too easy; that's where I'm from), not Scandinavia (too cold and dark), not Italy, nearly Croatia...but, finally, France..."

• A reader wrote last week to ask about corruption in countries we report on, wondering why we don't cover this subject more often and more directly. He referenced Transparency International's Corruption Perceptions report (you can read it here), in which more than 75% of the countries score lower than 5, indicating a "serious corruption problem."

The reader in question is looking for a "comfortable, corruption-free life" and wants to know where we'd recommend he go to find it.

I can understand basing your choice for where to relocate overseas on the weather. Or the cost of living. Or even (though I don't recommend it) the local approach to taxation.

But making your big-picture decision for where to live based on the perceived level of local corruption? Focusing your search this way might lead you somewhere you don't really want to be.

That aside, to address the issue the reader raises...

Also This Week...from Resident Global Real Estate Investing Expert Lief Simon:

You likely recognize that buying real estate overseas is a smart part of any asset-protection and diversification plan right now. Unfortunately, though, a big part of your retirement funds and net worth may be tied up in some kind of retirement account, a 401k or an IRA, for example.

Most custodians of these kinds of accounts don't allow for "non-traditional" types of investments such as foreign real estate.

The important thing to understand is that it's not that you can't use your IRA funds to invest in real estate. It can be, though, that your custodian doesn't want you to...either because he doesn't want (or understand how) to deal with the required paperwork or, more often, because he makes more money if you invest in one of his preferred investment products.

To buy real estate--foreign or local--with your retirement funds, you can set up what's called a "self-directed IRA" or "self-directed 401k." In theory, this means you're in a position to "direct" the investment of your account funds. However, you still must go through the custodian, asking him to make the investment for you. He can refuse.

The best (in some cases, depending on what you want to do, the only) way, therefore, to take control of your IRA funds is to establish what I refer to as a "Checkbook" IRA.

To do this, you set up an account with a self-directed IRA custodian. Then you create an LLC (I'd recommend an offshore LLC if your intention is to purchase foreign real estate), in which your IRA invests all its funds. Then you, as the president/manager of that LLC, invest the funds of your IRA as you like.

This structure allows you to eliminate the paperwork (and the review process) otherwise required each time you invest in something "alternative." You simply write a check from the LLC's bank account to make the buy.

This structure is the most straightforward I know for using retirement funds to invest in real estate overseas. I've seen many people get far into the buying process and then hit a wall with their planned purchase when it comes time to title the property in the name of their IRA account, as is required for IRA investments. Most countries' legal systems don't know what an IRA account is, and they have no idea or no way to title a property in the name of such an account.

One thing to remember when investing with a self-directed IRA is the self-dealing rules. For example, and broadly speaking, you can't have your IRA buy real estate from you directly. You can't have your IRA invest in any business you own or operate. And you can't have your IRA buy a property and rent it out to your business.

In addition, and importantly, note that you can't use your IRA self-directed funds to buy real estate for personal use; the property must be an investment. You can't buy a vacation home with IRA funds, for example, and then spend three months a year using it.

However, you could buy a piece of real estate with the plan to rent it out until you retire. Then, once you do retire, you could take the property as a distribution from your IRA and move in...and live in it.

The concept is straightforward, but getting the structure set up requires some work. Basically, as I said, you move your IRA to a custodian that allows "non-traditional" investments. The IRA funds go into an account with this custodian. Then you set up an LLC (and a bank account for that LLC), into which your IRA invests its funds.

You are appointed the manager of the LLC and, as such, you direct the investments of the LLC. You're able simply to write a check for any investment you want to make.

The LLC makes the direct investments, not the IRA, so you don't have to fill out the forms and get approval from the custodian for every piece of property you want to buy with your IRA funds.

Also, it's easier to get a piece of foreign property titled into the name of an LLC than it is into the name of an IRA account. An LLC is a legal entity that can be recognized on a property title in most any country.

I'm going through this process myself right now. In my case, the primary motivation is a desire to diversify all assets and capital out of the United States. To this end, I'm converting my IRA to a Checkbook IRA with the intention of then using those funds to purchase a rental investment property in Medellin.

We've been getting so many inquires about how to do this that our preferred international tax attorney Chris Rusch has put together a service to help people set up the program properly. Chris can walk you through the process step-by-step and help you figure out what offshore structures you might need in conjunction with the Checkbook IRA.

Just as he's been doing for me these past couple of weeks.

You can find out more here.

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Panama Without The Sugar Coating

No marketing hype, no rose-colored glasses.

That's the promise of the Panama Letter.

Panama is right now the world's top retirement, investment, offshore, and doing business haven. To get the most out of this little country with such an abundance of upside right now, and to determine which opportunities might be right for you, you need to know the full story. You need to understand all the facts, straight, complete, and current.

This is Panama without the sugar coating. From a team of expats, investors, and businesspeople with, together, many decades of experience spending time and making money in the Hub of the Americas.

Go Here Now For The Full Details.

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