Make A Plan (But Don’t Set It In Stone)
Perhaps the most important thing to understand about the offshore world, I explained in my opening remarks to the group convened in Panama City for last week’s Offshore Summit, 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…as well as the political situations, the values of local currencies, and the ease of coming and going from other parts of the world…all these things change all the time.
In the past year, for example, Colombia has increased the minimum amounts required to qualify for their various investment visas…Antigua has introduced a new economic citizenship program…and one of the institutions we’ve banked with for six years informed us it no longer wanted us as clients (because we’re Americans and this bank, like many banks around the world reacting to FATCA pressures, is kicking American clients to the curb). Looking into the near future, we expect Panama’s current very user-friendly Specific Countries visa to become history when current President Martinelli (who created the program with a surprise Executive Order last year) is out of office next year.
Any list of the World’s Top Offshore Havens is a moving target. How then can you make a plan and take action?
You’ve got to diversify.
Just as it’s smart to invest in different markets and to hold assets of different types in different currencies, so, too, are there advantages to spreading your life among different jurisdictions.
I didn’t invent this strategy. It’s written of often, as the “Five Flags” plan. It’s about organizing both your time and your money to your greatest advantage, spreading your life across multiple flags (that is, countries). And, in fact, when you consider the Five Flags approach in the context of your own life, you may find that you need more than five.
You could 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), hold a passport (and maybe 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. Again, 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.
Lief Simon
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