Quote of the Day:
“In my lifetime, 13 zeros have been knocked off my country’s currency. Most of the people in this room are Americans. You haven’t had to live through the experience of watching your currency be devalued like this.
“Yet.”
–Argentine economist Steve Rosberg addressing attendees at this week’s Offshore Summit
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 restrictions…as 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.
In 2008, Panama made wholesale changes to its residency permit requirements, increasing both the minimum required investment amounts for all categories and the income requirement for the pensionado visa.
Then, earlier this year, Panama created a whole new residency category that amounts to the easiest way anywhere in the world to establish foreign residency. It also provides for a work permit, something that is generally unheard-of. As our Panama legal eagle put it, “If you want to move to Panama, certainly if you’d like to have the option to work in Panama, you should jump on this. This unique opportunity will almost certainly disappear when the current administration is out of office.”
While we were living in the country, Ireland changed its constitution to eliminate automatic citizenship for anyone born on the island. They have also, at various times, changed the rules associated with becoming a citizen through ancestry.
France has changed how the country taxes rental income. Foreign property owners are now meant to pay any associated social charges (although this is technically illegal under EU law).
A few years ago, Costa Rica changed both the minimum requirements and the benefits associated with its pensionado program.
This year, Argentina has imposed stricter currency controls making it very difficult to get hard currency out of that country.
Belize recently passed foundation laws to be competitive with jurisdictions offering foundations as a structures option. Now, in Belize, you can choose a trust or a foundation for your long-term planning.
Etc.
Any list of the World’s Top Offshore Havens is a moving target. In the face of this, how can you make a plan and take action?
By making your plan as diversified as possible. This is the big-picture point of the discussions here in Panama City this week.
Do your banking in one country (where you can feel reasonably secure your deposits are safe), reside in another (where you pay no tax), run your business in a third (where entrepreneurs are respected and incentivized), maybe acquire a second passport elsewhere…
Have gold on deposit in one jurisdiction, keep a physical mailing address in another, and arrange for phone and fax services, again, someplace else…
No, not everyone needs this level of diversification. It depends on what you’re trying to accomplish. My point is that, to protect yourself and to maximize your opportunities, you need to remain open-minded and flexible.
Plant your flags based on your current circumstances and agendas. But don’t plant them in concrete. You might want to be able to move them around from time to time.
Kathleen Peddicord
