Mike Adams in Ecuador grows his own food and is demonstrating a unique water pump that runs on compressed air.
Wednesday, May 13, 2009
GEITHNER ON SOCIAL SECURITY/MEDICARE
All Baby Bommers - This is very important to read and understand. The US government's assessment of the solvency of the social security and medicare systems. We Baby Boomer's cannot afford to place our future in the hands of the government. Sec. Geithner states that medicare will be insolvent by 2017..Social security by 2037!!
We all need to find alternatives to retiring in the US. There are many great options. We continue to preview and discuss these in this blog.
This is not intended as "the sky is falling" hype. . This short video provides more useful information based on real data provided by the US Government. It affects us all and should be used to help plan and assess every Baby Boomer's future...
We all need to find alternatives to retiring in the US. There are many great options. We continue to preview and discuss these in this blog.
This is not intended as "the sky is falling" hype. . This short video provides more useful information based on real data provided by the US Government. It affects us all and should be used to help plan and assess every Baby Boomer's future...
Friday, May 8, 2009
How one couple found golden opportunities in Ecuador that changed their lives forever Author: Suzan Haskins
If it weren’t for Gary and Merri Scott I might be in a different place. In fact, I could still be living in Omaha, Nebraska, braving the miserable winters. Still writing annual reports and ad copy and only dreaming about what might be.
For more than 40 years, Gary has been writing a newsletter about international investing. He has been a contributing editor of International Living since its founding. He and Merri don’t just talk the talk. They’ve lived in Hong Kong and London, the Dominican Republic and Ecuador. Their curiosity has taken them around the world many times over. They’ve given countless seminars, spoken at myriad conferences, and written many columns and articles (and even a few books).
When Gary first started exploring and writing about Ecuador in 1995, International Living readers were among the first in the world to discover the opportunities this little South American country offers the foreign expat.
“When we started taking groups to Ecuador for seminars on real estate, business, and investing, we figured we would help people make money while at the same time helping the country,” Gary says. “We didn’t even begin to imagine the benefits we would gain beyond this, though. Our experiences in Ecuador have changed our entire way of life.”
Gary’s writing and Merri’s enthusiasm for Ecuador have affected many lives…including my husband’s and mine. We read those early articles Gary wrote…and in late 2001 we found ourselves living in Quito, Ecuador, as part of the International Living team.
Since then, we’ve gotten to know Gary and Merri well and we now count them among our closest friends. Their passion for the things that interest them can’t be ignored. In fact, I believe that if you visit Ecuador—and especially if you are lucky enough to spend time there with the Scotts—you, too, will fall under its spell.
Gary and Merri have a unique outlook on the world. They believe in socially responsible investing. They study Ayurvedic principles of thought and medicine and believe in the healing powers of Amazon shamans and supplements derived from jungle plants. Above all, they believe in instinct and destiny, and that when you follow your passions in life everything else falls into place.
It was this self-confidence that led them to Ecuador in the first place.
As part of his interest in investing in global currencies, Gary had been watching fluctuations of the sucre, which was then Ecuador’s official currency. (In 2000, the sucre was abandoned in favor of the U.S. dollar.) He saw opportunities emerging in Ecuador because of the country’s economic struggles.
As he did more research, though, he became more enamored with Ecuador. Just a four-hour flight from the U.S., he learned that because of its location on the equator and its geologic DNA, the country is environmentally rich. The towering Andean mountain range runs spine-like from north to south, dropping sharply to the Pacific coast on the west and the Amazon basin to the east, sheltering every imaginable climate and micro-system.
“It’s the closest country to the U.S. where you can find direct sunlight 365 days a year,” Gary says. “The opportunities for tourism and agriculture are practically unlimited. When I first started writing about Ecuador, the country was in the midst of an economic crisis. Real estate prices were rock bottom.”
Gary and Merri took their first trip to Ecuador in early 1995. They liked what they saw, and soon they were leading tours there, introducing others to the opportunities they found.
“We knew that 65% of Ecuador’s population are indigenous people,” Gary says. “And after several trips there, we learned that the spiritual leaders of the indigenous people lived in the Andes. We heard so many wonderful things about these philosophers and healers that we felt compelled to take a special trip to meet them.”
On their next trip, the Scotts and some friends found their way to a small mountain village where many of the Taita Yatchak (“father of fathers” in the Quichua dialect) shamans and their apprentices live. Often third- or fourth-generation healers, they begin their studies at an early age and travel around South and Central America (and elsewhere) to train with the greatest healers in each of these places.
A few months later the Scotts found themselves on yet another journey. This one would change their lives profoundly and forever link them with Ecuador.
“We were incredibly honored to be invited to go with the Taita Yatchaks into a hidden valley in the Andes,” Merri explains. “They told us no foreigners or outsiders had ever been there before. Only later did we find out that this valley is considered a spiritual center and that during colonial times, the Spanish thought it contained the fountain of youth.”
Since learning of the Scotts’ story I’ve done some research on this valley. Called the Llanganatis Valley, many of the indigenous people refuse to call it by name, believing that doing so brings the curse of immediate death. It is also rumored that the Incas hid an incredible treasure of gold, silver, and gemstones there centuries ago.
This legend seems to be based on some truth. A Spanish historian, writing soon after the conquest, says that when Pizarro captured the Inca chief Atahualpa in 1532, the two leaders made a deal. Pizarro would release his captive for a huge ransom of gold, silver, and emeralds. The treasure began pouring in and soon filled a large stateroom in Atahualpa’s palace.
In a dastardly double cross, Pizarro killed Atahualpa. Atahualpa’s half-brother, Rumi˜aui, then had the treasure spirited away and buried in the Llanganatis Valley. Many explorers and treasure seekers over the years have attempted to find it, including one named Juan de Valverde who left behind documents that supposedly map the way to its location. In the late 1800s and into recent times, many adventurers have sought and failed to find the treasure. And many have met with an early demise, fueling the legend.
Thankfully, no misadventure came to the Scotts on their expedition into the mysterious valley. In fact, says Gary, “None of us had ever had so much fun. On the first day we were more tired than I can describe. We were bone weary from our heavy packs, every muscle aching from fighting the altitude-thinned air and the sucking mud, which regularly pulled off our boots.
“We stayed in a floorless, leaky thatch hut, sleeping on dirt, no heat except the cooking fire and no running water. To our surprise, the next day we all felt wonderful. We explored the valley, which is perpetually wrapped in mist and fog. We swam in small icy, deep blue lagoons and did ancient exercises while the Taita Yatchak talked with us about longevity and health.”
Certain now that Ecuador was the place for them, Gary and Merri bought a 962-acre plantation in a valley in Ecuador called Rosapamba. (They also own a 250-acre farm near Lansing, North Carolina, where they spend the summer months.) Only accessible by horseback or a four-wheel-drive vehicle, Rosapamba was the perfect place for them to relax, meditate, and study further with the shamans.
With friends, they also founded Land of the Sun (www.landofthesun.org), a public charitable foundation, to help reduce global poverty. Concentrating their efforts in Ecuador, the group bought Hotel El Meson de las Flores in Cotacachi, a small village high in the Andes about two hours north of Quito by car.
Hotel El Meson is a comfortable and welcoming place for travelers, and it’s becoming the expat meeting place in Cotacachi. There’s a large free-lending library, where you’ll often hear children laughing and chattering. Volunteers give free English lessons there.
The local indigenous people who work in the hotel have received training in business development and tourism and want the experience of working in the hospitality industry.
Dressed in their colorful traditional clothes, they take much pride in their work, evident by all the special little details.
They happily keep the courtyard filled with fresh flowers, and hold back some to tuck on the pillow of your bed. They painstakingly carve tiny flowers from radishes and other vegetables to add a touch of whimsy to the generous portions of food served in the hotel restaurant.
The hotel’s Quinoa Café is one of the best restaurants in town. It serves reasonably priced, healthy meals made from local organic fruits and vegetables, fresh fish, and other products from local markets.
Every day, the restaurant prepares more than enough food…Merri has made it her goal to see that no one in town goes hungry. You’ll often see the town’s poorest people standing quietly outside with plastic containers, waiting patiently for the food that is warmly shared.
Land of the Sun has also been involved in reforestation and water projects, and supports many community efforts in Cotacachi. (If you go there looking for something to do, you won’t be disappointed.)
The library at Hotel El Meson is used for many of the courses and seminars Gary and Merri offer in Ecuador, like International Business Made EZ seminars and Lozanov-system Spanish-language learning retreats. El Meson is also the launching point for the shamanic tours, Import and Export expeditions, and real estate tours they offer.
Gary and Merri walk the walk with Ecuador real estate, too. “Real estate prices are still very low in Ecuador,” Gary says, “On our recent tours, we’ve seen new condos selling for less than $50,000 in the mountains and less than $80,000 on the beach. We’ve found 20-acres farms for $50,000 and custom-made hacienda-style homes for less than $100,000.”
In addition to Rosapamba, Gary and Merri have bought several condos and a casita in Cotacachi and are hard at work renovating a building around the corner from El Meson into a four-unit apartment building. Near the town of San Clemente on Ecuador’s Pacific Coast, they’ve just finished the construction and furnishing of an oceanfront penthouse condo.
Summers in North Carolina, winters in Ecuador…constantly incubating the next idea and working on the next project…will they ever slow down, I asked them recently?
No way, Gary says. “The mantra we have used in our business courses for over 20 years is to turn your passion into profit. And we do this. We do what we love and love whomever and whatever we write about. To us it is a privilege to be able to share what we experience. Truthfully, we feel like we’re just getting started. Each day we rise with anticipation with what we get to do. It’s better than golf or fishing to us, and we have no plans to stop. We feel the longer we do this the more experience we have and the better we get.”
Learn more about Gary Scott’s international investing ideas at: www.garyascott.com. To read more about Gary’s newsletter about multi-currency investing, see: www.internationalliving.com/multicurrency. To learn more about the Scott’s experience in Ecuador, see: www.ecuadorliving.com.
Monday, May 4, 2009
Welcome To Margarita Island! |
 |
| ||||||
|
| |||||
FREEDOM
Sterling Hayden (actor and adventurer) had this to say about freedom in his novel “Voyage”. (written in 1976)
“In the worship of security we fling our lives beneath the wheels of routine...we are brainwashed by our economic system until we end up in a tomb beneath a pyramid of time payments, mortgages, preposterous gadgetry and playthings that divert our attention from the sheer idiocy of the charade. The years thunder by. The dreams of youth grow dim where they lie caked on the shelves of patience. Before we know it the tomb is sealed...When you consider the beauty there is in the world, the rapture that can be known, the honest relationships, the excitement and exaltation there is for the taking...the real things to look at and feel and read...Where, then, lies the answer? In choice.
“In the worship of security we fling our lives beneath the wheels of routine...we are brainwashed by our economic system until we end up in a tomb beneath a pyramid of time payments, mortgages, preposterous gadgetry and playthings that divert our attention from the sheer idiocy of the charade. The years thunder by. The dreams of youth grow dim where they lie caked on the shelves of patience. Before we know it the tomb is sealed...When you consider the beauty there is in the world, the rapture that can be known, the honest relationships, the excitement and exaltation there is for the taking...the real things to look at and feel and read...Where, then, lies the answer? In choice.
Sunday, April 26, 2009
Moving to Ecuador Helped to Preserve My Freedom
DAVID BEYER’S STORY
By Linda McFarlin
Moving to Ecuador was a natural progression for David Beyer, a 36-year-old North American raised in Florida. A veteran traveler with more than twenty countries stamped in his passport, he has lived in the Dominican Republic and Costa Rica and visited Nicaragua, Mexico, Columbia, Ecuador and Peru.Now living in Quito, he comments on his reason for moving to Ecuador and choosing to live outside the U.S. (other than having married a lovely Ecuadorian woman): “Like a lot of expats, I just don’t feel like living in the United States anymore. I don’t like the direction the country is taking. I want to preserve my freedom and I experience more freedom when I am in other countries.”
When I asked him why he feels more at liberty in other countries, he replied, “The United States has too many laws. Here in Ecuador, you never know what will happen. Life every day is free-flowing, while in the U.S. it's all the same.”
A Lifetime in Pursuit of Twin Passions
Two of David’s passions are computers and law. It’s hard to imagine that at his current age of 36, he already has 30 years’ experience in computer programming. He began working at the wee age of 6, writing store demos for Radio Shack in Melbourne, Florida. He started selling for the store when he was ten and before long was selling more than the older salesmen.
“The store manager called me into his office and said, ‘If you’re gonna sell computers, you’ve gotta dress up. Wear a suit and tie.’ So I did. I would answer all the customer’s questions and then send them to the checkout counter. I wasn’t exactly legal, but I was cute. The store would buy me lunch when I sold something.”
David’s other love, law, led him to study law in college for two years and then applying law to his various businesses over the years. “I am very analytical and I enjoy problem-solving, “ he told me. “Law is gray, not black and white, so I can apply creativity to working things out.”
Motorcycle Accident Interrupts Travel
While spending lots of time in Central America and in Columbia, he had read good things about Ecuador and decided that moving to Ecuador was the best choice for him. During a visit to Ecuador in early 2007, David met his Ecuadorian/Columbian wife in a Quito disco. Moving to Ecuador in September ’07, he told her, “I’d be back in one month.” Instead, he was gone 4 months.
On September 18, 2007, a motorcycle accident in Florida resulted in 4 months’ recovery in the U.S. and titanium parts to repair damage to his leg and arm. Finally, he made his way back to Ecuador and his wife-to-be and they were married in April of 2008.
The newly-weds intend to build a house on their land in Mindo, where they conduct tours in one of Ecuador’s most diverse biological ecosystems.
Multiple Talents Lead to Several Ecuador Business Opportunities
Utilizing his numerous entrepreneurial talents has led to more than one Ecuador business opportunity for David. He now operates two businesses in Quito and one in the United States:
1. Mindo Express, an Ecuador business offering tours of Mindo
Same address as above
Telephone: (02) 222-5464 (Espanol)
08 294-6663 (English)
Mindo Express mainly targets backpackers, nature lovers and bird watchers. They employ a bilingual tour guide and a chauffeur. There is a two-person minimum for tours.
2. Asesoria Legal, an Ecuador business operated with Ecuadorian attorney partner Leonardo Viveros to assist newcomers with all their Ecuador visa, legal and residency issues.
His partner Leonardo helped him obtain his residency. The process worked so smoothly that David decided to partner with Leonardo to assist others.
David and Leonardo’s legal services are available by phone, internet or in-person consultation. They specialize in immigration issues and can also help with obtaining an Ecuador visa and with land and car purchases. For those moving to Ecuador, his services are indispensible.
David, while not an attorney, has studied business law for two years. He holds certification in Business Administration as well as being a business major and is pursuing a Master’s in Business Administration.
David will provide answers to immigration questions at no cost. He keeps up-to-date on legal issues in Ecuador, visa requirements and changes in the laws and can also do English translations of documents. Although not fully bilingual himself, his staff is bilingual.
The PDF file below provides David with all the information needed by his attorney to begin the residency process for you. Clients may either edit the file, fill the form out online and return, or they may print it out, fill in the blanks and bring it with them when they meet with David or his staff.
Click here for David's "Legal Services Application"
3. Softworks International, Inc., a Florida corporation which operates under the name BeyerSoft Ecuador S.A. in Ecuador. This company is a phone dating business, his primary business, which sells programs so that anyone can establish a phone dating program anywhere in the world, with voicemail, chats, etc.
David’s phone for English/Spanish:
877 653 2823 toll free from U. S. or Canada
08 294 6663 from inside Ecuador
Leonardo’s cell phone for Spanish only: 09 0630451
The address of David's office is:
Robles E7-46 y 6 de Diciembre (next to Banco Pichincha)
If moving to Ecuador is in your future, contact David for all your Ecuador visa, immigration or legal needs. Please tell David you heard about him on Pro-Ecuador.com.
Saturday, April 18, 2009
Ecuador Avocado Farm for Sale - By Gary Scott
by Gary Scott
Our last real estate tour looked at a number of new properties including an Ecuador Avocado farm.
Studies of avocados suggests that people of the Valdivia, an ancient. Ecuadorian culture, probably brought avocado to Ecuador and neighboring northern Peru where they grew well.
In fact Ecuador avocados played some role in the development of California’s avocado industry from the 1920s. An interesting report from the 1920s entitled AVOCADOS OF THE CHOTA VALLEY, ECUADOR was written by WILSON POPENOE, an Agricultural Explorer for the United States Department of Agriculture.
The introduction of that report said:
Synchronously with the increased demand for hardy avocados of good commercial
quality, which has arisen in California since the cold weather of January 1922, comes the discovery of a hitherto unknown avocado region, in the remote Andes of northern Ecuador, which seems likely to supply such varieties. I refer to the Chota valley, home of an unusual series of large-fruited avocados of the Mexican race, some of which have been introduced into the United States by the Office of Foreign Seed and Plant Introduction, United States Department of Agriculture, and which will soon be sent to California and Florida for testing.
I have put a link to that report at the bottom here if you wish to read it for fun. The point though is that this is the area where avocados have been grown for at least a century… maybe much longer.
This appeared to me (but I am not a farmer) to be a really well organized 12 acre avocado farm just on the outskirts of Ibarra. The owner has returned to Loja.
The land feels isolated though it is only about 15 minutes from Ibarra.
To get to the farm you take a long winding road…
past a dairy.
The land looks rich.
Here is the entrance to the avocado farm.
the main house.
inside living room and…
kitchen.
with many cabinets.
The house is a modest two bedroom, one bathroom affair appearing in very good order
plus there is a helper’s house.
We did not go in the helper’s house as it is occupied.
There are very well kept gardens.
Here are both houses from the rear and…
the back garden.
Here, in front of the houses, is the fruit… the cash generator.
The avocados are flowering for their first crop.
Some more shots…
We are told they will offer a $50,000 a year income after two years… $25,000 potential this year. (Be sure to check this out as we are not avocado farmers so cannot discern the truth.)
Here are the early buds.
Behind the houses, I walked up the hill where they have an irrigation system collecting water for several holding ponds.
Along this system there are Naranjilla trees growing as a secondary crop.
This is the naranjilla.
Another secondary crop here is the chirimoya.
Chirimoya, is also called the cherimoya or custard apple. This is a rare exotic high priced fruit used to make sweets and desserts.
They are grown a lot in Spain but originate in subtropical zones such as Ecuador, Peru and Colombia.
Asking price with these two houses, land and crops is $260,000. I am not a farmer… do not know how to sell avocados, naranjilla or chirimoya and have written everything I know about the property here, so please if this property interests you, do your due diligence and contact the broker.. not me with your questions.
The broker on this is Paola Mena. Her telephone is 593 09804479
web site: www.bienesraicesimbabura.com
email: paolamena14@yahoo.es
I have had complaints that she does not answer her email often, so be persistent. The best bet is to get a Spanish speaking person to call her.
Since we are on the subject of avocados and naranjilla, here is a great recipe for avocado and naranjilla muffins.
The Avocado Naranjilla Muffin (substitute limes or sour orange if you cannot get naranjlla).
Cream:
* 2 sticks butter
* sweeten to taste
* 1 Cup wheat flour
* 1 Cup quinoa flour
* 4 Eggs
Blend (stiring clockwise).
* 2 avocados
* 1 tablespoon of Naranjilla juice
Stir avocado mash and the zest of the narnajilla into the creamed mixture.
Pour into a muffin tin and bake at 350 for 30 min.
Avocado Frosting
* 1 avocado
* 1 cup of powdered sugar
* 1/4 cup of butter
Mash the avocado and mix with the butter and powdered sugar.
This recipe was derived from an avocado lime cupcake recipe which you can read here
Until next message, make all your living be good in Ecuador or anywhere.
Gary
Join us in Ecuador at a 2009 course or tour.
Ecuador Coastal Real Estate Tour May 16-17. $499 Enroll here. $749 For a couple.
Imbabura-Cotacachi Real Estate Tour May 20-21. $499 Enroll here. $749 For a couple.
Ecuador Amazon Herbal Tour May 22-24. $399 Enroll here. $499 For a couple.
Panama, Ireland and Taxes
We didn't move from the U.S. to Ireland 10 years ago to save on taxes. And that's not why we're moving to Panama this summer either.
But, no question, controlling your tax liability can make a big difference in your standard of living. Reduce your tax bill from, say, 40% a year to, say, 20% a year and it's like giving yourself a raise and super-charging your investment portfolios. You're earning no more, but you've got a whole lot more disposable income.
So, again, we're not moving to Panama to reduce our tax burden, and neither should you. You can't organize your life according to tax code. But you don't want to ignore it either.
We Americans have it double tough. No matter where we go, our obligations to Uncle Sam follow. When we take up residence in a foreign jurisdiction, therefore, we've got double the tax masters. We're beholden to both the IRS and the local tax collector.
We must understand the tax requirements on both sides, and we must file annual tax returns in both jurisdictions...but that is not to say we owe double the taxes.
On the contrary. As an American abroad, you can reduce your annual tax burden, even significantly, from what you were paying when you were residing full-time within U.S. borders.
This is where things get interesting...and complicated.
Don't worry. You don't have to become an international tax guru to manage this part of your new life in paradise. After more than 20 years researching this stuff and more than 10 years paying taxes in multiple jurisdictions, I'm still no expert. But I've been fortunate enough to get to know people who are.
Which leads to my first and probably most important piece of advice on this subject: When planning to move, retire, or invest overseas, don't try to become a global tax authority. Hire one.
In fact, hire two. One in the jurisdiction where you're planning to live or invest...and another in your home country.
During one of our scouting trips to Ireland before our move 10 years ago, we met with Ernst & Young in Dublin. We didn't know what we didn't know, but we knew enough to ask for help.
At the time, Ireland taxed its residents on a remittance basis. That is, living in Ireland, you paid tax only on whatever money you earned or brought into the country. You could earn hundreds of thousands of dollars a year. But if you brought (remitted) only $50,000 per year into the Emerald Isle...the Irish tax authorities expected their cut of that $50,000 only. Maybe you owed other tax authorities in other countries other tax on other pieces of your total income...but Ireland cared only about the piece of your income that flowed into Ireland.
The Ernst & Young tax guy we met with explained this to us and then he made a critical recommendation. He told us to organize ourselves so that all assets held prior to our move to Ireland were lodged in separate accounts from any assets we might ever bring into Ireland. This way, there could be no confusion. The Irish tax collectors could never lay claim to any assets clearly separate from other assets that might ever be remitted to Ireland.
And, then, he said, as long as you're living in Ireland, make sure that money you don't intend to remit to Ireland goes into those other accounts. Make sure everything is clearly separate from the start...and keep it that way.
We followed his advice.
In addition, as Americans residing abroad, Lief and I both were able to take advantage of the earned-income tax exemption, meaning that our first $80,000 to $85,000 of income each year apiece (the amount of the exemption has increased over the past decade and stands today at $85,700) was free from U.S. tax.
Plus, Ireland and the U.S. have a double-taxation agreement, meaning we didn't owe tax in the States on any income taxed in Ireland.
Bottom line, by organizing ourselves carefully, as Irish residents, we were able to reduce our overall rate of tax to less than 20% per year.
The tax laws in the Emerald Isle have changed significantly in the past decade, and Ireland no longer taxes its residents on a remittance basis. Today, Ireland taxes residents on their worldwide income...just as the U.S. does (with some complicated exceptions).
Yikes.
As I said, we're not moving to Panama because of its tax laws...but it hasn't escaped our notice that the country's position on taxing its foreign residents is about as good as it gets.
In Panama, we'll be paying tax only on the money we earn in Panama. You gotta' love that.
Panama is not the only tax-advantaged jurisdiction worth a close look right now. Belize is another place where, as a resident, you pay tax locally only on the money you earn locally.
Furthermore, Belize is one of the easiest places in the world to become a full-time (legal) foreign resident...at least if you're older than 45. Show the Belize immigration authorities that you've got a guaranteed income of at least $2,000 per month ($24,000 per year) from outside Belize, and you'll qualify for Qualified Retired Person (QRP) status. They'll roll out the welcome mat.
And they won't even require that you're physically present in the country more than one month per year. A friend refers to it as "virtual residency." Belize is a beautiful, safe, friendly, affordable little country. In fact, it's one of my favorite places in the world and my favorite spot in the Caribbean. But if full-time Belize life doesn't appeal to you, no problem, say the Belizeans. Spend a month a year with us. In return, you can claim full-time Belize residency.
If you're an American, this offer is particularly appealing. For, if you're a full-time resident of Belize...you can't be a full-time U.S. resident. Which means you're eligible for the U.S. foreign-earned-income exclusion.
It's not quite that straightforward, and, again, you'll want an expert to help you organize yourself properly. But the idea of becoming a full-time resident of a foreign jurisdiction for tax purposes is not only possible, it's also legal and safe...and it can cut your overall annual tax burden dramatically, even in half.
It's even possible, depending on your circumstances, to become a resident of Panama, for example, or a QRP in Belize and live tax-free. It depends on how much income you earn and where it comes from. But, again, it's possible, and it's legal. You just need counsel you can trust to help you consider the options and make a plan.
Don't Google "foreign tax specialist" or "international tax advisor." You'll find lots of resources that way...but none you can trust. The Internet is awash with guys who'll set you up with offshore structures for a fee and who'll be glad to help you get one over on the IRS.
You don't want to get one over on the IRS. You just don't want to pay that U.S. government agency $1 more of your income than you absolutely have to each year.
And you don't necessarily want offshore structures either.
I have no idea what you do want...or need. And, probably, neither do you. But I can tell you this: Take the advice of some offshore expert you find with the help of Google, and your chances of ending up someplace you don't want to be (engaged in a one-on-one conversation with a representative of the IRS, for example) are probably increased.
Neither should you dash off an e-mail to your U.S. accountant or attorney asking for help managing the tax consequences of your new life or investments abroad. He won't have answers for you, and your questions will make him nervous.
My U.S. attorney a decade ago, at the time we were planning our move to Ireland, told me not to mess around with the earned-income exclusion for Americans living abroad. "It's too risky," he counseled me. "Better just to pay what you owe and not to try to get away with anything."
I understood almost nothing about any of this at the time, but I knew enough to know he didn't know enough. He's no longer my attorney.
I didn't replace him immediately or easily--though not for lack of trying. I began looking for a competent, experienced, and open-minded U.S. tax advisor as soon as I realized my attorney of many years was none of those things when it came to the issues faced by Americans living and investing abroad.
In my position as publisher of International Living over the past two-plus decades, I met lots of guys who called themselves "offshore tax experts."
Finally, less than a year ago, I found a guy who I'd call an offshore tax expert. His name is Chris Rusch.
Our situation has grown ever-more-complicated in the decade since we left the States, but Chris has organized and simplified as he has counseled us in how our Panama plans will impact our U.S. tax obligations.
Chris knows his way around the offshore world. He knows what's allowed and what's not, and he respects the rules. He also knows how to solve problems and how to get things done. Our experience with Chris over the past 10 months has been remarkably efficient, painless, and productive...wholly different from our experience with the half-dozen other offshore advisors we tried to work with prior to finding Chris.
I told you, though, that you need not one, but two global tax authorities, one to manage tax, reporting, and structure issues for you in the States...and one to manage those things in your jurisdiction of residency.
For us, the Panama side of things is managed by longtime friend and counselor Rainelda Mata-Kelly. Over the past nine years of doing business in this country, Rainelda has helped us buy and sell real estate, open bank accounts, form corporations, hire and pay employees, acquire residency (through the reforestation visa program)... I know no Panama attorney more experienced or more competent at helping foreigners live and invest safely and successfully in this jurisdiction. And I know a lot of Panama attorneys.
Kathleen Peddicord
P.S. One of the best way to become a foreign resident of Panama today is through an investment in timber...a hard-asset play that makes sense right now, residency advantages notwithstanding.
P.P.S. You can reach U.S. attorney and offshore tax specialist Chris Rusch here. And you can get in touch with Rainelda Mata-Kelly, premier Panama attorney, here.
But, no question, controlling your tax liability can make a big difference in your standard of living. Reduce your tax bill from, say, 40% a year to, say, 20% a year and it's like giving yourself a raise and super-charging your investment portfolios. You're earning no more, but you've got a whole lot more disposable income.
So, again, we're not moving to Panama to reduce our tax burden, and neither should you. You can't organize your life according to tax code. But you don't want to ignore it either.
We Americans have it double tough. No matter where we go, our obligations to Uncle Sam follow. When we take up residence in a foreign jurisdiction, therefore, we've got double the tax masters. We're beholden to both the IRS and the local tax collector.
We must understand the tax requirements on both sides, and we must file annual tax returns in both jurisdictions...but that is not to say we owe double the taxes.
On the contrary. As an American abroad, you can reduce your annual tax burden, even significantly, from what you were paying when you were residing full-time within U.S. borders.
This is where things get interesting...and complicated.
Don't worry. You don't have to become an international tax guru to manage this part of your new life in paradise. After more than 20 years researching this stuff and more than 10 years paying taxes in multiple jurisdictions, I'm still no expert. But I've been fortunate enough to get to know people who are.
Which leads to my first and probably most important piece of advice on this subject: When planning to move, retire, or invest overseas, don't try to become a global tax authority. Hire one.
In fact, hire two. One in the jurisdiction where you're planning to live or invest...and another in your home country.
During one of our scouting trips to Ireland before our move 10 years ago, we met with Ernst & Young in Dublin. We didn't know what we didn't know, but we knew enough to ask for help.
At the time, Ireland taxed its residents on a remittance basis. That is, living in Ireland, you paid tax only on whatever money you earned or brought into the country. You could earn hundreds of thousands of dollars a year. But if you brought (remitted) only $50,000 per year into the Emerald Isle...the Irish tax authorities expected their cut of that $50,000 only. Maybe you owed other tax authorities in other countries other tax on other pieces of your total income...but Ireland cared only about the piece of your income that flowed into Ireland.
The Ernst & Young tax guy we met with explained this to us and then he made a critical recommendation. He told us to organize ourselves so that all assets held prior to our move to Ireland were lodged in separate accounts from any assets we might ever bring into Ireland. This way, there could be no confusion. The Irish tax collectors could never lay claim to any assets clearly separate from other assets that might ever be remitted to Ireland.
And, then, he said, as long as you're living in Ireland, make sure that money you don't intend to remit to Ireland goes into those other accounts. Make sure everything is clearly separate from the start...and keep it that way.
We followed his advice.
In addition, as Americans residing abroad, Lief and I both were able to take advantage of the earned-income tax exemption, meaning that our first $80,000 to $85,000 of income each year apiece (the amount of the exemption has increased over the past decade and stands today at $85,700) was free from U.S. tax.
Plus, Ireland and the U.S. have a double-taxation agreement, meaning we didn't owe tax in the States on any income taxed in Ireland.
Bottom line, by organizing ourselves carefully, as Irish residents, we were able to reduce our overall rate of tax to less than 20% per year.
The tax laws in the Emerald Isle have changed significantly in the past decade, and Ireland no longer taxes its residents on a remittance basis. Today, Ireland taxes residents on their worldwide income...just as the U.S. does (with some complicated exceptions).
Yikes.
As I said, we're not moving to Panama because of its tax laws...but it hasn't escaped our notice that the country's position on taxing its foreign residents is about as good as it gets.
In Panama, we'll be paying tax only on the money we earn in Panama. You gotta' love that.
Panama is not the only tax-advantaged jurisdiction worth a close look right now. Belize is another place where, as a resident, you pay tax locally only on the money you earn locally.
Furthermore, Belize is one of the easiest places in the world to become a full-time (legal) foreign resident...at least if you're older than 45. Show the Belize immigration authorities that you've got a guaranteed income of at least $2,000 per month ($24,000 per year) from outside Belize, and you'll qualify for Qualified Retired Person (QRP) status. They'll roll out the welcome mat.
And they won't even require that you're physically present in the country more than one month per year. A friend refers to it as "virtual residency." Belize is a beautiful, safe, friendly, affordable little country. In fact, it's one of my favorite places in the world and my favorite spot in the Caribbean. But if full-time Belize life doesn't appeal to you, no problem, say the Belizeans. Spend a month a year with us. In return, you can claim full-time Belize residency.
If you're an American, this offer is particularly appealing. For, if you're a full-time resident of Belize...you can't be a full-time U.S. resident. Which means you're eligible for the U.S. foreign-earned-income exclusion.
It's not quite that straightforward, and, again, you'll want an expert to help you organize yourself properly. But the idea of becoming a full-time resident of a foreign jurisdiction for tax purposes is not only possible, it's also legal and safe...and it can cut your overall annual tax burden dramatically, even in half.
It's even possible, depending on your circumstances, to become a resident of Panama, for example, or a QRP in Belize and live tax-free. It depends on how much income you earn and where it comes from. But, again, it's possible, and it's legal. You just need counsel you can trust to help you consider the options and make a plan.
Don't Google "foreign tax specialist" or "international tax advisor." You'll find lots of resources that way...but none you can trust. The Internet is awash with guys who'll set you up with offshore structures for a fee and who'll be glad to help you get one over on the IRS.
You don't want to get one over on the IRS. You just don't want to pay that U.S. government agency $1 more of your income than you absolutely have to each year.
And you don't necessarily want offshore structures either.
I have no idea what you do want...or need. And, probably, neither do you. But I can tell you this: Take the advice of some offshore expert you find with the help of Google, and your chances of ending up someplace you don't want to be (engaged in a one-on-one conversation with a representative of the IRS, for example) are probably increased.
Neither should you dash off an e-mail to your U.S. accountant or attorney asking for help managing the tax consequences of your new life or investments abroad. He won't have answers for you, and your questions will make him nervous.
My U.S. attorney a decade ago, at the time we were planning our move to Ireland, told me not to mess around with the earned-income exclusion for Americans living abroad. "It's too risky," he counseled me. "Better just to pay what you owe and not to try to get away with anything."
I understood almost nothing about any of this at the time, but I knew enough to know he didn't know enough. He's no longer my attorney.
I didn't replace him immediately or easily--though not for lack of trying. I began looking for a competent, experienced, and open-minded U.S. tax advisor as soon as I realized my attorney of many years was none of those things when it came to the issues faced by Americans living and investing abroad.
In my position as publisher of International Living over the past two-plus decades, I met lots of guys who called themselves "offshore tax experts."
Finally, less than a year ago, I found a guy who I'd call an offshore tax expert. His name is Chris Rusch.
Our situation has grown ever-more-complicated in the decade since we left the States, but Chris has organized and simplified as he has counseled us in how our Panama plans will impact our U.S. tax obligations.
Chris knows his way around the offshore world. He knows what's allowed and what's not, and he respects the rules. He also knows how to solve problems and how to get things done. Our experience with Chris over the past 10 months has been remarkably efficient, painless, and productive...wholly different from our experience with the half-dozen other offshore advisors we tried to work with prior to finding Chris.
I told you, though, that you need not one, but two global tax authorities, one to manage tax, reporting, and structure issues for you in the States...and one to manage those things in your jurisdiction of residency.
For us, the Panama side of things is managed by longtime friend and counselor Rainelda Mata-Kelly. Over the past nine years of doing business in this country, Rainelda has helped us buy and sell real estate, open bank accounts, form corporations, hire and pay employees, acquire residency (through the reforestation visa program)... I know no Panama attorney more experienced or more competent at helping foreigners live and invest safely and successfully in this jurisdiction. And I know a lot of Panama attorneys.
Kathleen Peddicord
P.S. One of the best way to become a foreign resident of Panama today is through an investment in timber...a hard-asset play that makes sense right now, residency advantages notwithstanding.
P.P.S. You can reach U.S. attorney and offshore tax specialist Chris Rusch here. And you can get in touch with Rainelda Mata-Kelly, premier Panama attorney, here.
Subscribe to:
Posts (Atom)
Posts
