This story from Investors without borders seems appropriate for our Panama investor blog.
Things are getting uncomfortable for individuals and corporations looking to deposit their money in tax havens around the world.
Just recently, Congress introduced the so-called “Stop Tax Haven Abuse
Act,” which is designed to do away with the privacy afforded by doing
business or investing outside the U.S. and to eliminate or reduce tax
benefits available offshore. Simon Black and Fitzroy McLean, ex-CIA
operatives, investment pros, and globe-trotting editors of Casey
Research’s Without Borders, weigh in with their no-holds-barred opinion
on the topic…
We are patriots. We have proudly served in our country’s military, have
extended a helping hand to its public sector, and have plowed our
entrepreneurial enterprise into its once fertile soil. We love America,
but these days, America does not love us back. It takes without giving
and squelches free enterprise. These days, America is no longer the
land of the free, especially when it comes to the market.
Just look at the headlines, seemingly ripped from the pages of
Atlas Shrugged: Unconscionably large bank bailouts. Punishing
regulations and tax requirements. An arctic business climate.
Government money bombs. Riots and protests. Slowing trade.
Protectionist rhetoric. Demonized corporate executives. Even pirates
hijacking cargo ships. One can guess what will happen next.
We predict the next several years will usher in larger, more
obtrusive governments, resulting in a decline of personal liberty and
financial privacy. The world will become increasingly polarized between
two groups: those who consider government intervention a great idea,
and the rest of us who happen to be sane.
As such, you can bet your last falling dollar on some absolute
certainties: bank nationalization is a given, at least de facto if not
de jure; taxes are going up on those of us with any money left; the
Fed’s money blitzkriegs will spark a blaze of inflation; and financial
privacy will be a thing of the past in the United States.
The obvious and necessary solution is to position one’s finances
outside of the United States, and to do so now, while the narrow and
finite window of opportunity is still open.
To be clear, evading (or even avoiding) taxes at this point is not
a wise move, given the size and scope of the ever-growing IRS. But
there are significant advantages to expatriating your capital now:
For starters, you will actually have control of your own money. Yes, in
certain instances you’ll be obliged to tell the IRS exactly where it is
and what you’re doing with it, but no government agency will have the
authority to reach into your overseas pocket and freeze or expropriate
(read: steal) on a whim just so Team Obama can give it away to pay for
someone else’s McMansion. Plus, when exchange controls are implemented
and Americans are forbidden from wiring money overseas, your capital
will already be secured in another jurisdiction, where you will be free
to do what you want with it.
Secondly, you will no longer have to assume the risk of insolvent
banks or go through the hassle of petitioning the government to get
your FDIC insurance bailout. Many overseas banks are far better
capitalized than those in the United States, and some of them are in
jurisdictions with constitutionally protected banking privacy.
Lastly, and probably most importantly, moving money overseas gives
you a last chance at diversifying out of the dollar, which, in a very
short period of time, will barely be worth the paper on which it’s
printed.
Bank and Brokerage Accounts
Opening a foreign bank or brokerage account is easier said than done;
the United States government severely restricts where and under what
terms you can open a bank account, invest in a fund, or engage in other
economic activities that facilitate the protection of and access to
your assets. As the signatory on an overseas account, you are required
by law to inform the federal government on Treasury form TDF 90.22 by
the end of June each year. Ostensibly, this has been done in the name
of fighting money laundering, but it has the effect of severely
restricting your freedom of financial movement.
Many foreign banks simply won’t work with you… don’t worry, it’s
nothing personal. Uncle Sam has been beating them down since the Reagan
years, and between Qualified Intermediary rules, tax treaties, and the
USA PATRIOT Act, Sammy gives himself a lot of regulation to bury the
opposition with.
There are some jurisdictions that are still excellent banking
centers; Switzerland may have rolled over, but Panama, Uruguay,
Singapore, and the United Arab Emirates have thus far ignored the call
for “greater transparency” (read: government access to private finance).
Some individual banks, like Credicorp and Global Bank in Panama, or
Banco Itau in Uruguay will not work with U.S. citizens anymore, but
there is still opportunity with the hundreds of remaining banks in
these jurisdictions.
Similarly, opening a foreign brokerage account is a shrewd move,
not only to move your money overseas but also to have greater access to
financial markets. Remember when world markets tanked on Martin Luther
King Day 2008? If you were a U.S.-based investor and wanted to sell,
sell, sell, you had to wait a full 24 hours until the markets opened
after the holiday on Tuesday morning. If you had been invested with
global depository shares through a foreign brokerage, you could have
saved yourself several points and gotten out in time.
We would suggest looking at Saxo Bank in Denmark.
Bullion Storage
If you have gold, it would be highly beneficial to get it out of the
U.S. – stat. If you do keep it in the U.S., your only truly reliable
and private option is to store it yourself in a safe that you bury in
your backyard. Otherwise, move it out of the U.S. now before Team Obama
pulls an FDR and takes your gold from you.
At the moment, gold is not considered a monetary instrument by the
U.S. Customs and Border Patrol, so there is no legal requirement to
declare your bullion upon leaving the United States. Some countries,
like Taiwan and Uruguay, require you to declare gold in excess of a
certain value to customs officials upon entry.
Real Estate
It might sound counterintuitive after the subprime debacle, but real
estate is a sound option for moving money outside of the United States;
there are zero reporting requirements. It’s your business where you own
property, and (so far) no one else’s. You can purchase property in a
private way by setting up a corporate structure to hold the assets so
that they’re not in your name (Panama is an excellent jurisdiction to
set this up), and although there are many places with depressed real
estate markets, there are also many with good growth potential: in
Latin America, we would recommend Panama, Colombia, Uruguay, and Chile.
In Europe: Slovakia, Albania, and Poland. In the rest of the world:
Lebanon, Hainan Island (China), the Philippines, Cambodia, and New
Zealand.
Time is of the essence – start looking for your safe haven now.
About The Author
Without Borders is Casey Research’s monthly newsletter dedicated to
finding the best global investment opportunities and the most beautiful
places to live and do business.
If you are interested in specific strategies for moving money
overseas and diversifying out of the dollar –whether it’s overseas bank
accounts, real estate purchases, commodity currencies, or offshore
brokerages — Fitzroy and Simon tell you the safest and most robust
places to park your dollars while they’re still strong and widely
accepted… places that will keep your personal economy strong even as
the dollar and the U.S. economy suffer. They investigate outstanding
investment opportunities, companies, and stocks you won’t hear about on
CNBC as well as lucrative overseas deals that they themselves scope out
and test.
Being the number one issue of complaint is not because it is the first thing that must be done in order to take advantage of the benefits Panama has to offer. I receive more complaints about this one subject than all others combined, year after year. And they are usually the most passionate, because when it comes to having the right to reside where you have spent money, people naturally become feisty. I am sure this article will bring many such comments and they are welcome. This problem has gone on for years, but in the last few years delays in immigration have reached a point where many foreigners just give up and take a pass on Panama. Part of this problem is the fact that more people than ever are trying to get residency and the government is ill equipped to handle it. Millions of dollars of new facility and equipment that were purchased to alleviate the problem are still not operating, and with a new administration coming into office they will have to learn the ropes which will no doubt cause further delays. And it does not seem to matter if you are an investor with 20 million dollars or a Costa Rican who married a Panamanian trying to get residency, plan on a long wait to get that all important document. 
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