From The Scene In Scottsdale—Tax Reporting Requirements, Foreign Property Purchase Caveats, And The One Thing You Should Never Do In Panama
“I’ve been presenting to groups like this one for about 30 years,” friend and attorney Joel Nagel explained to the group assembled in Scottsdale this morning for this week’s Retire Overseas Conference.
“For a long time, when I’d speak about residency and citizenship options around the world, a few scruffy-looking fellows sitting in the back rows would perk up and lean forward. These characters were interested in those things…wanted to know about how to get a second passport, for example.
“Everyone else? Everyone else looked bored…looked off into space…wandered out of the room for a bathroom break. Who wanted to establish residency in another country? Why would anyone need a second passport?
“It’s a different world today,” Joel continued.
Our Residency and Citizenship Workshop this morning was fully attended and carefully followed by everyone in the room. Joel was joined on stage by Lief Simon, Lee Harrison, Mark Nestmann, and our local lawyer for a surprisingly spirited discussion about establishing foreign residency (as a retiree or otherwise) and obtaining second citizenship and a second passport.
The most user-friendly choices for establishing retiree residency today? Belize, Ecuador, Malaysia, Nicaragua, Panama, and Uruguay. Our panel walked attendees through the requirements, the process, and the associated costs in each case, sharing personal anecdotes based on their own experiences establishing legal foreign residency in these and many other places over the years.
“You can find the details for how to obtain a residency visa in Ecuador on the Internet,” Lee Harrison explained. “When I was moving to Cuenca, I did, on a government-published website. I tried to follow the steps as outlined there. But what I found was that the process on the ground was nothing like what was described online. The reality of how things played out in person was completely different…”
Then Mark Nestmann, one of the world’s leading experts in acquiring second citizenship and a second passport, detailed the best current choices if this is an objective–St. Kitts, Dominica, and the Dominican Republic.
“Residency and Citizenship” was the second of seven Big Issue workshops we conceived as part of this week’s program. Each of these seven topics (from preparing your retire overseas budget to establishing foreign residency…from how to rent or buy a new home to how to manage your tax burdens and obligations as a retiree overseas…from choosing health insurance to dealing with the administrative challenges of establishing yourself in a new country and finding a way to supplement your retirement income overseas) is being addressed by a panel of hand-selected friends and experts with long firsthand experience.
The “Property Questions” workshop panel included the three top global property experts I know–Lief Simon, Lee Harrison, and Paul Reynolds.
“When Paul reviewed the PowerPoint I’d put together for this presentation,” Lief remarked, “he called to ask me to explain something to him. I was so proud of him,” Lief continued with a grin in Paul’s direction, “because he’d never heard of a ‘net commission.’
“A ‘net commission,'” Lief continued, “is when an owner asks a real estate agent to sell his piece of land or his house for him. The guy tells the agent how much he wants out of the sale. The agent then adds some additional amount on top of that, maybe 20%, maybe 50%, maybe 100% more than the figure indicated by the owner. The agent makes the sale and then pockets the difference.”
We concluded the morning by discussing the least fun topic of all: Taxes. Lief, Joel Nagel, and Mark Nestmann made up the panel for this workshop. They spent a lot of time talking about forms and filings. Horribly dry and boring stuff that has become the bane of every American abroad’s existence.
The name of the game with the U.S. IRS these days seems to be tax death by filings. It’s a whole lot easier to prove that you didn’t meet some filing requirement than that you didn’t pay some amount of tax you may or may not have owed. Why argue over the tax due, I guess they figure, when we can get ’em for a filing foul-up? The fines and penalties for missing a filing deadline and for not reporting some asset or some offshore bank account you’re meant to report, according to the fast-changing tax code, are severe.
As I write, I’m sitting in the back of the room for the Panama Country Workshop. Up on stage, our Panama attorney, Panama entrepreneur Robert Kroesen, and Lief are entertaining the group with photos and stories of their lives and experiences in Panama.
“Don’t mess with Carnaval!” Robert is advising the group.
“Yes, we Panamanians like our parties,” our attorney adds as she flips the projector to show a colorful Las Tablas Carnaval parade…
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