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Banking And Doing Business In Belize

April 10, 2012

“Lief, thanks for sharing the information about Caye Bank in Belize. I’ve been eyeing Belize since reading about it in your and Kathleen’s newsletters (and I bought your Belize report just over a year ago).

“I’m paying off a few more things, and then I want to travel to Belize to see if I can see myself living there. I’m only 36, but, once I’m out of debt, I’m thinking I’d much rather invest abroad than slave away here in California to maybe own a house in 30 years after all that work.

“I fired off an inquiry to Caye Bank, but then I thought I should ask you if that’s the right step to take. Based off what I’ve read, I’m thinking I could set up my web consulting business there, which is work I can do remotely. Can you recommend resources I should read or contact for setting up my business in Belize?

“Thanks, in advance, for your help!”

–Sam Y., United States

Sounds like a great plan.

If the plan, in fact, is to live in Belize while running a web business, probably the best thing would be to incorporate in another jurisdiction and keep the business out of Belize. This would keep you from paying taxes in that country.

One resource I’d recommend would be Joel Nagel, a U.S. attorney with decades of experience both helping Americans set up businesses and corporations abroad and, as well, specifically, decades of experience doing business in Belize.

Joel will be joining us as a key presenter for our Retire Overseas Conference taking place in Scottsdale, Arizona, later this month, along with other key Belize contacts (including the president of Caye Bank). As you’re in California, maybe you could pop over to join us. Would be an ideal opportunity to talk through your plan in person.

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“Kathleen, Lief said to forget France because of tax changes. Why do you now promote it?”

–Matthew M., United States

It’s important to keep things in context. Lief reported recently that France is not an appealing choice for second citizenship, because the country is contemplating taxing its citizens on their worldwide income whether they live in France or not. Currently, France taxes residents on worldwide income whether they are citizens or not. However, currently, a citizen of France living outside the country has no France tax obligation. Again, current discussions have this changing…which would put France on the list of countries you don’t want to be a citizen of.

All that is true and important to understand. But it has nothing to do with living in France, especially as a retiree, as a double-taxation treaty exists between the United States and France (meaning retirement income is taxed in its source country, not in France). In other words, for an American, retiring to France is a tax-neutral event.

And, taking another step back, none of that has anything to do with the experience of being in France…of living in Paris or of launching a new life in retirement in a centuries-old French country town.

Quality of life (which I’d argue is higher in France than anywhere else in the world) has nothing to do with tax strategies or second citizenship. Taxes, residency, citizenship…these things are pieces of a much bigger puzzle that anyone considering living or retiring in another country must put together for himself. I strongly recommend that, as you work to do that, you keep things in perspective. Don’t choose a country for retirement because of its approach to taxation or the benefits of holding a second passport there. Choose a country for retirement because it is a place where you can afford to enjoy the kind of retirement life you want to live.

That decision made–where you can afford to enjoy the life you want–then you address the other questions…to do with things like taxation. Almost any tax obstacle can be overcome with a little imagination and flexibility.{module Issues Ad 10}Continuing Reading:

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