Tax Free Havens

Sept. 9, 2011

"You mentioned recently that, 'For non-Americans, Belize offers the opportunity for tax-free living.' So, being an American, they want to tax me in Belize?

"By the way I am really enjoying receiving your information. I have found it very informative and well written! Thanks."

-- Mark G., Panama

No, it's not that Belize will tax you as an American foreign resident. It's that Uncle Sam will tax you as an American no matter where you're resident.

The United States is one of only a few countries in the world that taxes its citizens on their worldwide income no matter where they live. That is to say, as an American abroad, you never lose your obligation to the U.S. Internal Revenue Service. When you take up residence elsewhere, therefore, you have two tax obligations (the one to the IRS that you never lose and a second to the new jurisdiction where you've become resident).

This is not to say that you pay double the taxes. It is very possible to organize your financial affairs as an American abroad to reduce your tax burden significantly, even to live tax-free. Belize is an excellent choice if your agenda is tax mitigation.

These are complicated issues, and you need good counsel. The best I know is Chris Rusch, an international tax attorney based in the States with many years' experience helping Americans abroad manage their tax obligations. He understands the related issues better than any other tax "expert" I've met in 25 years covering this beat.

These are the kinds of particulars we address in great detail together during every Live and Invest in Belize Conference. Our next one is scheduled for Nov. 14-16. Chris will be there to join us on stage to answer every tax-related question and to set up private appointments.

The Early Bird Discount for the event is currently in effect, as well as our new Belize Conference Payment Plan. Full details of the program are available here.

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"Kathleen, I've been receiving your Overseas Opportunity Letter for about a year now. My question may seem like a silly one, but what I'd like to know is, are there any overseas retirement destinations that have an affordable cost of living and that aren't hot?

"I may be in the minority, but places with climates like the climates in Central America and Southeast Asia would not be comfortable environments for me. Any advice?"

--Bess K., United States

Most Central American destinations, including Belize, Nicaragua, and Panama, for example, have mountain areas that can be much cooler and more temperate than coastal regions in these countries.

Uruguay is probably the best choice in South America for mild weather. Winters aren't too cold, though summers at the beach can get hot for a month or so. All in all, though, Uruguay has four mild seasons.

In Europe, you could consider southwestern France. Again, you'd have a month or two of hot summer weather but, overall, four mild seasons.

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