Second Passports and Economic Citizenship

St. Kitts Doubles the Cost of its Citizenship by Investment Program: Here's What You Need to Know
Christian Reeves

St. Kitts Doubles the Cost of its Citizenship by Investment Program: Here’s What You Need to Know

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St. Kitts and Nevis Citizenship by Investment Program (CIP), one of the most coveted in the world, has taken a dramatic turn that has caught the attention of global investors. In its most significant shift since inception, the CIP has made urgent and immediate changes.

This pivotal adjustment is part of St. Kitts and Nevis’ commitment to meet the demands set forth by the European Commission while preserving the esteemed status of its citizens. The nation has taken remarkable steps to ensure stringent compliance and greater security.

The minimum investment requirement has seen an astronomical surge with the donation for a single applicant rising from US$125,000 to US$250,000. In tandem, the minimum investment in real estate has increased to US$400,000, positioning the program as one of the most costly citizenship by investment initiatives.

Adding to the list of changes is the introduction of mandatory interviews for all applicants, a move designed to enhance due diligence. Furthermore, citizenship documents must now be collected in person, whether in St. Kitts & Nevis or at a designated diplomatic mission abroad.

At first glance, these changes might be perceived as daunting, possibly leading investors to consider alternative citizenship routes. However, this might be a hasty decision. The St. Kitts passport carries substantial benefits that remain attractive despite the increased investment threshold.

Investors continue to have visa-free access to over 150 countries, including all of the EU, the UK, Ireland, and Russia. The tax environment remains advantageous with no income, wealth, or inheritance taxes. A major draw for families, dependents aged 18-25 in full-time university education, children under the age of 18, and grandparents or parents over the age of 65 can be included in the application. Moreover, once you obtain economic citizenship, it is lifelong and can be passed along to your descendants.

Although a seven-year hold period applies to the real estate investment, this period can be seen as a medium-term investment with the potential to resell and recoup the initial investment. Notably, there is no residence requirement, meaning you can obtain citizenship without setting foot in St. Kitts and Nevis.

This dramatic shift in the St. Kitts and Nevis CIP is a stark reminder of the unpredictability of the global landscape and highlights the need for robust choices and expert guidance.

The process and requirements to apply for citizenship in St. Kitts and Nevis through their Citizenship by Investment Program (CIP) are as follows:

Eligibility

To be eligible, you must:

  • Be at least 18 years old.
  • Have a high personal net worth.
  • Be in good health.
  • Have a clean criminal record, verified through Interpol, the World Check, and other authorities.

Investment Options

You have two options for investments:

  • Sustainable Growth Fund: A single applicant is required to make a non-refundable contribution of US$250,000.
  • Real Estate Investment: Purchase government-approved property valued at least US$400,000, plus payment of government fees. The property must be held for a minimum period of seven years.

The Application Process

The process of applying for citizenship can be summarized in the following steps:

  • Choose an Authorized Agent: The first step in the process is to select an authorized agent who is licensed by the Citizenship-by-Investment Unit (CIU) of St. Kitts and Nevis. The agent will guide you through the process, prepare the necessary documentation, and liaise with the CIU on your behalf.
  • Prepare and Submit Application: Gather all required documents, which must be in English or translated into English, notarized, and accompanied by the appropriate fees. The application must include:
    • Completed official forms.
    • Medical certificate (including an HIV test) for each applicant.
    • A birth certificate and passport copies for each applicant.
    • Police clearance for all applicants aged 16 and over.
    • Proof of payment for due diligence and background check fees.
    • Proof of the investment made or to be made.
  • Due Diligence Check: After submitting your application, the government will perform a rigorous due diligence check. This involves a comprehensive background check of the applicant and their dependents. The check is conducted by an international agency, which verifies all the information provided in the application.
  • Approval in Principle: If the due diligence report is satisfactory, the CIU will issue a letter of “approval in principle.”
  • Investment: Once approved, you will be asked to make the investment in full – either a contribution to the Sustainable Growth Fund or purchase the approved real estate.
  • Citizenship Certificate and Passport: After making the investment, the government will issue the certificate of registration, denoting you as a citizen of St. Kitts and Nevis. Following this, you can apply for a St. Kitts and Nevis passport.

The entire process may take about 3-6 months to complete.

Please note that changes introduced in 2023 now require that all applicants attend a mandatory interview and collect citizenship documents in person, either in St. Kitts & Nevis or at a designated diplomatic mission abroad. This has added another layer of due diligence to the process and increased the timeline and complexity of the application process.

This is a general guide and requirements may vary slightly depending on individual circumstances. Always consult with your authorized agent or legal advisor to ensure that you meet all requirements before beginning the application process. For more information, and to be connected to an expert in the St. Kitts program, please contact us at info@premieroffshore.com. 

The Best European Union Second Passport Program in 2018
Christian Reeves

The Best European Union Second Passport Program in 2018

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The best European Union second passport program in 2018 is Bulgaria. This program often takes a backseat to Portugal’s Golden Visa, but Bulgaria offers far more value. Plus, I expect it the value of the Bulgarian passport to increase in the coming years. Here’s everything you need to know about the best European Union second passport program in 2018.

I’m often asked if Bulgaria is a member of the EU. Yes, Bulgaria and Romania joined the European Union in 2007. This expansion is known as “the fifth wave of enlargement of the European Union” which went on from 2004 through 2007. And, possibly, more importantly, Bulgaria is in the process of joining the Schengen Region. Once that process is complete, the value of its second passport will increase dramatically.

Why will Schengen membership increase the value of Bulgaria’s European Union second passport program? The Schengen region is an area without internal borders, an area within which citizens, many non-EU nationals, business people, and tourists, can freely travel without being subjected to border checks. For travel and business purposes, the Schengen region is one multi-nation state made up of the most powerful members of the European Union.  

List of countries in the Schengen area:

  • Austria
  • Belgium
  • Czech Republic
  • Denmark
  • Estonia
  • Finland
  • France
  • Germany
  • Greece
  • Hungary
  • Iceland
  • Italy
  • Latvia
  • Liechtenstein
  • Lithuania
  • Luxembourg
  • Malta
  • Netherlands
  • Norway
  • Poland
  • Portugal
  • Slovakia
  • Slovenia
  • Spain
  • Sweden
  • Switzerland


And a second passport from Bulgaria is already a valuable travel document. Bulgarian citizens have visa-free or visa on arrival access to 169 countries and territories, ranking the Bulgarian passport 16th in terms of travel freedom (tied with the Croatian, Hong Kong and Romanian passports).

When Bulgaria is admitted to the Schengen region, I expect more countries to offer visa-free travel to Bulgaria, thereby putting its passport on par with Portugal. Portuguese citizens had visa-free or visa on arrival access to 186 countries and territories, ranking the Portuguese passport 4th in terms of travel freedom (tied with the passports of Austria, Luxembourg, Netherlands, Norway, the United Kingdom, and the United States).

  • For more on Portugal, which might be right for you if you wish to purchase real estate rather than bonds, see Portugal’s Golden Visa.

And there’s an economic reason that I say the best European Union second passport program in 2018 is Bulgaria. There’s no need to invest in real estate or make a “donation” to the government to get your passport. You can invest in government bonds that are guaranteed. This investment is returned after 5.5 years. Depending on the program selected, you may or may not earn interest on the bonds.

In order to get the best European Union second passport, you invest 512,000 € in government bonds. This gets you a temporary residency visa immediately and a permanent residency visa after 6 months.  

After you’ve held the permanent residency visa for about 6 months, so one year total since you made the initial investment, you buy another 512,000 € in government bonds. This gets citizenship and a second passport 6 months after you purchase the second round and 18 months since you made your first investment.

It may be possible, depending on your situation, to finance up to 50% of this bond purchase. However, I’ll tell you upfront that the interest and handling charges for financed programs are quite high. The vast majority of our clients make their own financial arrangements and simply invest 1,024,000 € in government bonds over two years to receive their second passports.

If you only wanted residency in Bulgaria, then you could invest 512,000 € (make only one investment). You “upgrade” your permanent residency status to citizenship and a second passport in year two with the second investment.

Theoretically, you could invest 512,000 € and get residency. Then you could apply for citizenship after 60 months under Bulgaria’s original laws (those enacted before the fast track program). We have only handled fast track applications.

And you’re not required to open an account in Bulgaria or send money to the government. You can buy Bulgarian government bonds on the Berlin, Frankfurt, Stuttgart or Luxembourg stock exchanges. The entire transaction is transparent and available on multiple global exchanges.

I hope you’ve found this article on why Bulgaria the best European Union second passport program in 2018 to be helpful. For more information on the fast track program, or citizenship in another country (such as Portugal, Panama or St. Lucia), please contact me at info@premieroffshore.com or call us at (619) 483-1708. All inquiries are confidential.

Where can I travel without a passport?
Christian Reeves

Where can I travel without a passport?

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The US IRS will begin certifying tax debts on January 22, 2018. If you have a “seriously delinquent” tax debt, your passport can be revoked. Likewise, the government can refuse to renew your passport if you owe more than $50,000. Here’s where you can travel without a passport after it’s been revoked by the IRS.

I’ve been writing about this since December 2015, and it’s finally come to pass. The IRS will begin targeting American expats who haven’t paid their taxes in the next few days. Once your passport is gone, your travel options will be greatly reduced.

Before I get to where you can travel without a passport, let’s consider the situation for a minute.

I suggest that this bill targets Americans living abroad because, unless you have a second passport in hand, the loss of your US passport will force you back to the United States to deal with the IRS. For most Americans living in the US, the loss of their “travel privileges” is of little concern.  The ones who will be hit the hardest will be Americans living, working, and doing business abroad.

This is especially true for expats who don’t have permanent residency in a foreign country. If you’re traveling as a tourist, you’ll be forced back to the United States in a few days or months. If you’re a temporary resident, you’ll be required to return and account to the IRS when your temporary status expires. You won’t be able to apply for permanent residency status if your US passport has been revoked.

If you have a permanent residency visa, you should be able to remain in your country of residency. You won’t be able to travel or leave your country of residence without a valid passport. However, the IRS can’t easily force you home unless you lose your permanent visa status.

If you think you’ll have a tax issue in the future, or can keep the IRS at bay with an Offer in Compromise, you might apply for residency in a country like Panama. All you need to qualify is an investment of in this country’s friendly nations reforestation visa program. While there are many countries where you can get residency, Panama is the lowest cost quality jurisdiction for those from a friendly nation.

Of course, the question of where you can travel without a passport becomes mute if you purchase a second passport. So long as you have a valid travel document from a country like St. Lucia, the IRS can’t force you back by revoking your US passport.

But, once your US passport has been revoked, and you’re back in the United States, where you can travel without a passport? The following is based on a decade of experience. This article is not a statement of the law, but rather how things work at the border.

First, you won’t be able to fly to any country without a passport. No airline will risk allowing you to fly if you don’t have a passport. Remember that the airline is responsible for returning you to your home country if you’re denied entry.

So, that means you have only two options of where to travel without a passport. You can drive to Canada or Mexico. Because Canada can be quite picky about whom they let in, the safest port of entry is Mexico.

If you travel within the Border Zone (usually up to 20 kilometers south of the US – Mexico Border) or the Free Trade Zone (including the Baja California Peninsula and the Sonora Free Trade Zone) no passport will be required by Mexico. However, if you wish to pass these zones, you’ll need a passport and, if you’re driving a US car, your auto will need a permit.

The maximum period of time you’re supposed to stay in Mexico without a formal visa is six months. However, when you arrive by land, there’s no entry stamp and no way for the government to know how long you’ve been in the country. In my experience, so long as you don’t cause any trouble, the Mexican government won’t bother you.

In order to return to the United States, you’ll need a valid US ID and your birth certificate. While many websites say you need a US passport, including official government sites, I’ve asked immigration officers and they say you can pass with a birth certificate and photo ID. The last time I inquired was 2 days ago, so this is recent information.

By the way, I’m assuming that the US IRS will revoke all travel documents if you owe more than $50,000. This means the loss of your US passport, your US passport card, and your SENTRI card. US passport cards and SENTRI cards are only valid at land crossings (Mexico and Canada).

I haven’t seen any statements by the IRS or immigration on passport and SENTRI cards. It’s possible they would remain in effect if you lost your passport.

With that said, I don’t see any practical reason a US person couldn’t drive from San Diego to Tijuana and live in Baja indefinitely without a passport. Your chances of having a problem with Mexican authorities is low and you should be able to return to the US occasionally without a passport.

Where you’ll have issues is opening a local bank account and getting an apartment lease. It would be best if you can get these done before losing your US passport.

With all of that said, the best place you can travel without a passport is Northern Mexico. Again, this is 20 kilometers south of the US – Mexico Border and Baja California. All of my experience has been in Baja, from Mexicali to Tijuana and Playas to Ensenada. In 10 years of travel in Northern Mexico, I’ve never once been asked for a passport.

I hope you’ve found this article on where you can travel without a passport to be helpful. For information on setting up an offshore structure while you still have your passport, or with Panama residency or purchasing a second passport, please contact us at info@premieroffshore.com or call us at (619) 483-1708.

residency in Nicaragua
Christian Reeves

How to get residency in Nicaragua

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Nicaragua is the second most popular residency program in Latin America. Residency in Nicaragua is for those who don’t want the high pressure life of Panama City, Panama and for those who aren’t from a top 50 country. Here’s how to get residency in Nicaragua no matter what country you’re from.

The top two Latin residency programs are Panama and Nicaragua. Panama is for citizens of the US, EU, UK, and any of the top 50 countries. Those who qualify can get residency in Panama with an investment of $20,000 in this country’s friendly nations reforestation visa program.

Those who want a more laidback lifestyle or a lower cost of living often prefer Nicaragua. For those who are not from a top 50 country, Nicaragua is the best second residency program available.

Here’s how to get residency in Nicaragua:

If you’re over 45 and have a guaranteed monthly income of $600, you can qualify as a retiree in Nicaragua. This program is aimed at retirees and most qualify using their fixed pension payments. However, it’s possible to set up a bank annuity that will qualify.

You’ll need guaranteed income of $600 a month for you plus $100 per month for each dependent. Your spouse is a dependent, as is each child 18 years and under.

The more popular of the Nicaragua programs is their reforestation visa. Invest $35,000 in one of the government approved reforestation programs and get permanent residency. Additional legal and government fees apply.

  • Fees for those from restricted countries are about $10,000 per person. Fees for those from the US, EU, Canada, etc. are much lower.

If you’re on the fence between residency in Nicaragua and Panama, I think you’ll find that Nicaragua is a better investment opportunity. Yes, Panama is lower, but you get a lot more teak or hardwoods in Nica per dollar. Your ROI in Nicaragua will be higher than Panama.

Before I go any further, let me point out the big difference between Panama and Nicaragua. With Panama, you need only spend a few days a year in the country to maintain your residency. That is to say, Panama doesn’t have a physical presence requirement to keep your visa.

Nicaragua requires you spend at last 180 days a year in country. Nica is looking for real residents – people who are willing to commit to the country. They want residents who bring with them money and a desire to become a part of the community, not just pay an annual fee to hold a residency permit.

Second Passport from Nicaragua

Both Nicaragua and Panama allow you to apply for citizenship and a second passport after 5 years. The application process for Nicaragua is easier in Panama, so long as you can prove your 180 days a year over your residency period.

We value second passports by the number of countries they give us visa free access too. Nicaraguan citizens have visa-free or visa on arrival access to 112 countries and territories, ranking it 46th in terms of travel freedom (tied with Marshallese passport).

By comparison, a passport from Panama gets you visa free access to 127 countries. If you want the best of the best, a second passport from Portugal gets you visa free access to 171 countries, including the United States.

US citizens are usually looking at a second passport as a backup travel document or as a way to give up their US citizenship and escape the IRS. The number of US expatriations have been doubling each year under both Obama and Trump.

Citizens of China, India, and other countries with lesser travel documents are looking at a second passport as a way to increase their travel freedom. Nicaragua’s 112 countries is better than India at 49 and China at 51 visa free countries. Also, it’s easier to get a US visa with a passport from Nicaragua than it is from China or India.

The big difference in quality between Nicaragua, China and India is that Nicaragua gets you into the European Union without a visa.  A second passport from Nicaragua gives you visa free access to the Schengen region of the European Union. You can spend up to 90 days a year in the EU without a visa with a passport from Nicaragua.

In order to apply for residency in Nicaragua, you’ll need the following:

  • A copy of your birth certificate
  • A copy of your passport
  • A certificate or letter from your doctor stating that you’re in good physical health, are free from communicable diseases, and are mentally sound
  • A certificate or letter from your local police department stating that you’ve not been convicted of any crime or an FBI background check
  • A certificate of income from your bank or pension plan affirming that you’ll have enough money to meet the minimum requirement of US$600 a month
  • A list of the household goods you will be importing.

A residency visa from Nicaragua also allows you to import certain household goods from the US tax free. For example, a car worth $25,000 and household goods worth $20,000. In most cases, visa holders are bringing used items from their US home.

As an added bonus, you can import a car tax free worth $25,000 every 5 years. This tax break is a big deal in Nicaragua where import taxes are quite high. I hope you’ve found this article on how to get residency in Nicaragua to be helpful. For more information on this program, you can reach me at info@premieroffshore.com or (619) 483-1708. 

Privacy Flag Offshore
Christian Reeves

Top two max privacy options to plant your flag offshore

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The last few months have seen a striking increase in demand for offshore residencies and investments. Americans are looking to diversify out of the dollar, move their assets abroad, and to plant as many foreign flags as possible before the year end. Here are the top two max privacy options for 2018.

Because of the political climate in our country, Americans are renouncing US citizenship at record rates. In the third quarter of this year, 1,376 Americans renounced their US citizenship, putting the annual tally on pace to beat 2016’s record. That’s a 26 percent increase from 2016’s total of 5,411 – which was itself a 26 percent jump from 2015.

Those who are planning on burning their blue passports, want to diversify and create a safety net abroad, or wish to build an escape route and landing spot should things go badly, need to plant as many flags offshore as possible. The hottest offshore plans this quarter are:

  1. A second residency in a low or no tax country that leads to citizenship and a second passport, and
  2. Belize is suddenly the most active real estate market for those seeking personal freedom. This is a very new development and can be summed up in one word – Bitcoin!

Here’s where to get a second passport or second residency and why Belize has become the hottest offshore real estate market out there.

Second Residency Programs

There are two ways to acquire a second passport: you can buy it or you can earn it over time. You can buy a passport from a country like St. Lucia for $125,000 (single applicant) to $300,000 (family). St. Lucia is the lowest cost quality passport for purchase.

If you want a top tier passport, or don’t have an extra $250,000 lying about, you can earn a second passport through residency. Get a residency visa, maintain that visa for 5 or 6 years, and you can apply for citizenship.

The best top tier residency program Portugal. This country’s golden visa program get’s you EU residency, which means you can live and work anywhere in the Union during your residency. You can apply for citizenship and a passport after 6 years of residency.

You can get residency in Portugal by depositing money in a local bank or with the purchase of real estate. The most popular option is to deposit € 1,000,000 into a bank in Portugal (you don’t need to spend or invest it, just hold it in the bank). You can also buy any property for at least € 500,000 and get residency. If you buy a property that’s 30+ years old or located in an “urban renovation” area you need only spend € 350,000.

The best low cost residency program is Panama. If you’re from a “friendly nation,” you can get residency in Panama with an investment of just $20,000. You can then apply for citizenship and a second passport after 5 years of residency.

The investment must be made into one of Panama’s approved reforestation programs and covers the entire family. That is, only one investment is required for a husband, wife, and dependent children 18 years and under. Legal and government fees apply per person.

If you’re not from a friendly nation, the best residency program with a path to citizenship is Nicaragua. Anyone can apply, no matter your country of citizenship and the investment is only $35,000. Legal and government fees are higher than Panama, about $10,000 per person.

The big difference between Panama and Nicaragua is that you must spend 180 days a year in Nicaragua to keep up your residency. Panama does not have a physical presence requirement.

Real Estate in Belize

The Belize real estate market has been on fire for the last 2 months. Belize developers are now allowing buyers to pay 100% of the purchase price and all fees in cryptocurrency. For those looking to get their coins out of the US and away from the IRS, real estate in Belize provides an excellent opportunity to trade Bitcoin and diversify out of cryptocurrency.

Most of the buyers in Belize have been early adopters of Bitcoin. Those with significant gains and a desire to diversify out of cryptocurrency. Belize provides the best, and often the only, way for these investors to exchange coins for property.

The reason Belize and crypto have gone so well together is that Bitcoin’s original business model of privacy and security is what Belize has been about from day 1. Belize is one of the last tax havens standing where personal privacy is a natural right.

As Bitcoin grew, government’s perverted the original intent, but early adopters can still find a libertarian and (nearly) tax free existence in Belize. This country doesn’t tax capital gains and won’t ask you to report your holdings or your transactions.

Conclusion

For the above reasons, the top two max privacy options to plant your flag offshore is a second residency in a low or no tax country and buying real estate in Belize with your appreciated cryptocurrency. Both have seen major increases in demand this quarter and I expect them to do even better in 2018.

If you would like more information on second residencies, second passports, or real estate in Belize, please contact me at info@premieroffshore.com or call us at (619) 483-1708. We’ll be happy to assist you to diversify offshore. 

The Best Cheap Residency Programs for 2018
Christian Reeves

The Best Cheap Residency Programs for 2018

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Here are the best cheap residency programs for 2018. These are the best low cost residency programs that include a path to citizenship and to a second passport. If you’re looking to earn your second passport, check out this list the best cheap residency programs.

Residency allows you to live in a particular country. Some require you to spend a certain amount of time in country and some do not have a physical presence requirement.

Most second residency programs allow you to start a business (work for yourself) but don’t permit you to work for someone else. The intent is that you will come to the country and become a valuable part of the community. The government doesn’t want you to take jobs away from locals… they want you to create new jobs.

There are three ways for you to earn a second passport: 1) through residency, 2) by investing a large amount of money in real estate or government bonds, or 3) purchasing citizenship for cash. This article is focused on the best cheap residency programs for 2018 that allow you to earn a second passport.

These residency programs allow you to “earn” citizenship by becoming a part of the local community. Most require you maintain residency for 5 or 6 years before you apply for citizenship. That is to say, you must prove your commitment and your value over several years to earn citizenship.

Thus, citizenship through residency is a negotiation with the government. Become a part of the community, create as many ties to your new country as possible, and then apply for citizenship. This is very different from the cash for citizenship programs available from St. Lucia and St. Kitts (from these links you’ll see I’m a fan of St. Lucia’s program but not St. Kitts).

So, without more ado, here are the best cheap residency programs for 2018

Residency on a budget from a top 50 country: Panama

If you’re a US citizen, or from the UK, EU, or any of the other top 50 nations, you can get residency in Panama for cheap! Panama’s friendly nations reforestation visa program is the most efficient second residency program in the world, guaranteed.

Invest $20,000 in one of Panama’s approved teak reforestation programs and receive residency for you and your family (you, your spouse, and dependent children 18 and under). This is the lowest cost residency by investment program with a path to citizenship.

And Panama allows you to purchase your reforestation parcel with your US retirement account. Use IRA money to purchase the teak and personal money to cover legal and filing fees to stay within US IRA rules.

If you also want to take your US retirement account offshore, we can help. See: Here’s how to take your IRA offshore in 6 steps

Residency on a budget for everyone else: Nicaragua

For those of you not from a “friendly nation,” or just prefer a more laidback country, consider Nicaragua. Nica copied Panama’s program and opened it up to all nationalities.

Purchase $35,000 in a bundled reforestation package and get residency for you and your family. If you’re from a restricted country like China, India, or Pakistan, legal and government fees will be about $10,000 per person.

The big difference between Panama and Nicaragua is that Panama doesn’t have a physical presence requirement to maintain your residency visa. Nicaragua requires you spend at least 180 days in country during your residency period (5 years). Once you have your passport, you can spend as much or as little time in Nica as you wish.

Residency for retirees on a budget: Belize

The Belize QRP program was designed for retirees, but can be used by anyone with an annuity or is otherwise receiving fixed and guaranteed monthly payments. In most cases, these are distributions from a retirement account.

To qualify for the QRP, you must be receiving $2,000 a month or $24,000 a year in guaranteed payments. If you have this cash flow, you and your family can qualify for residency in Belize.

As with the other visas, the QRP program covers you, your spouse and your dependent children 18 years of age and under.

Belize has a very light physical presence requirement. You must spend 30 consecutive days each year to maintain your residency.

Residency in the European Union: Portugal

The best cheap residency program in the European Union is Portugal’s golden visa. To qualify, you must purchase real estate worth € 500,000 or deposit € 1 million in a local bank.

Obviously, € 500,000 or € 1 million are large amounts of money. I list Portugal as a “cheap” residency program because all you need to do is make a deposit in a local bank. You don’t need to spend the money or invest it. You can simply leave it in a local bank or buy a CD for the term of your residency.

Portugal’s golden visa gets you a top tier passport after 6 years. Residency in Portugal also allows you to live and work anywhere in the European Union.

Finally, you need only spend 2 weeks a year in Portugal to maintain your residency. You can send the rest of your time in the EU or wherever you like.

Conclusion

I hope you’ve found this article on the best cheap residency programs for 2018 to be helpful. For more information on any of these programs, please contact us at info@premieroffshore.com or call us at (619) 483-1708  for a confidential consultation.

immigration trouble
Christian Reeves

Are you living in Panama without a visa? Watch out, the government is targeting expats!

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If you’re living in Panama, making multiple visits to the country in a year, or are spending more than 90 days in Panama over a 12 month period, you must get a visa. The government is cracking down on people “living” in the country without a residency permit.

Per the U.S. Embassy in Panama: “The US Embassy in Panama would like to inform all US Citizens in Panama that on March 6th 2017, the Panamanian Immigration Authority (Servicio Nacional de Migracion-SNM) announced new guidance for Panamanian immigration officials on the enforcement of pre-existing regulations. According to the SNM, immigration officials have been instructed to be stricter about the enforcement of the regulation that foreigners entering Panama with tourist status prove that they are in fact entering Panama as tourists and not residing in Panama.”

The above warning was issued by the US Embassy in Panama to US citizens. But it’s equally valid for anyone making multiple trips to Panama within a year. Whether you’re from the US, Canada, Latin America, UK, or the EU, you’re at risk of being refused entry to Panama.

Also, Panama is adding stronger requirements to the “onward departure” rule. Whenever a tourist enters Panama (or just about any country for that matter), you’ve always needed a fight out… a departing flight… a onward departure.  Tourists can’t usually enter a foreign country on a one-way ticket.

For example, I could fly from California and fly out in 90 days to Medellin, Colombia. Since this was the cheapest flight, it costs me less when I cancel and stay in Panama.

As of 2017, proof of onward departure may no longer be sufficient. Panama is sometimes asking for proof of a return flight to the country from which your passport is issued. This can be a HUGE headache for those living in a country other than their country of birth.

There are several reasons for the change. First, Panama wants to increase fees and keep closer track on people “living” in their country, using their services, driving on their roads, and crossing the border multiple times in a year.

For years, many of us have been living in Panama without getting a visa, without paying any taxes, and without paying any government fees. We’ve been entering as tourists, leaving for a weekend party trip to Colombia or Costa Rica every couple months, and returning to Panama.

I did this for 3 years and never had a problem. I even did the border walk from Panama to Costa (Puerto Viejo). Walk across from Panama to Costa Rica, stay for an hour at the border bar, and walk back… usually paying the border guard $20 to modify the date on your stamp.

Now, it’s a new world where the government needs to increase control and fees.

Second, the Panama Papers put a lot of negative attention on Panama. Banks, airlines, and everyone in between is worried about being mixed up in money laundering. One way to fight this stigma is through tighter border controls.

And it’s not just the Panama Papers causing the problem. The US government has been all over Panama for the last few years and Papers gave them the news coverage they needed. For example, the US Government Shutdown Balboa Bank back in 2015. This had a big impact on the economy as thousands of locals lost their jobs.

All of this has forced Panama to appear stronger in fighting money laundering. One of the ways they’re doing this is by tightening border crossings. It’s all about appearances, even though it’s causing great pain for many of us expat entrepreneurs.

Third, pressure has been put on the government by real estate developers in the country (pressure or payment, however you see it) to increase sales. The most common residency visa for those living in Panama is to buy a condo in the city with a value of $350,000 or more.

But there is a way for those of us from friendly nations to get residency in Panama without buying real estate and without those high carrying costs.

If you’re from the US, Canada, UK, EU, or any of the 50 Friendly Nations, you can get residency in Panama through the Friendly Nations Reforestation Visa program. Invest $20,000 in teak and get residency immediately.

No more questions about how many days you spend in Panama each year. No more worrying at the border crossing. No more buying and cancelling airline tickets. No more pirate style border runs (though, they were fun).

Simply invest $20,000 to help keep Panama green and you’re in. And this investment amount will cover you and your family (your spouse and dependent children under 19). Legal and filing fees will apply to each person, but the investment amount remains the same.

And US citizens can make this investment using their IRA. Invest your retirement money in teak, and pay the fees with personal money to ensure compliance with US rules. For more, see: How to get Residency in Panama Using Your IRA.

The bottom line is this: If you have significant ties to Panama, you must get a residency visa. If you have investments in the country, spend more than 90 days a year there, or make multiple trips within a 12 period for any reason you need a visa.

The easiest visa to get is the Friendly Nations Reforestation Visa. If you don’t want to buy a condo in the city, take a look at this teak program.

For more information on this and other Panama residency programs, please contact me at info@premieroffshore.com or call us at (619) 483-1708. We’ll be happy to review your options and get you residency in the most cost effective way possible.

foreign residency from China
Christian Reeves

Low Cost Foreign Residency from China

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The demand for second passports and foreign residency is strong from China. The vast majority of US EB-5 foreign residency visas are issued to Chinese nationals and Chinese are very active in other countries as well.

For example, the first billionaire in the Caribbean was Wu Xu of China. He’s worth $1.9 billion and obtained his foreign residency and a second passport from St. Kitts in 2016. Mr. Xu is now the second wealthiest Caribbean citizen because Jacky Xu, a 32-year-old Singaporean-born business man, with a net worth of $3 billion, became a citizen of St. Kitts in early 2017.

A passport from St. Kitts will cost a  person from China about $300,000. However, I do not recommend this program for anyone in 2017 (even billionaires). For the reasons why, see: St. Kitts Passport Program Crashes and Burns.

A better option is St. Lucia with an investment of $500,000 in government bonds or Dominica with a purchase price of around $140,000 (including fees) for Chinese nationals. In my opinion, Dominica is the best value in the Caribbean.

The US program that’s most popular with Chinese investors is the EB-5 Investor’s Visa. If you invest $500,000 to $1 million, you get a green card immediately and are guaranteed a US passport after 5 years of residency.

The State Department says Chinese investors poured in $3.8 billion in the fiscal year that ended Sept. 30–approximately 85 percent of the EB-5 investment total, Bloomberg reported.

The EB-5 program is being evaluated by the Trump administration. Most expect the investment amount to increase from $1 million to $1.8 million and the targeted employment area minimum from $500,000 to $1.35 million. For more, see: Wealthy Chinese Moving Money To US Before Congress Hikes Visa Minimum.

If you’re not a Chinese billionaire, what are your choices? Here is the only low cost foreign residency open to Chinese nationals.

Chinese citizens can get foreign residency in Nicaragua with an investment of $35,000 plus legal and other fees. Then, like the US EB-5 program, you can file for citizenship and a second passport after 5 years.

If you have $500,000 to $1.8 million, you can get a US passport after 5 years of residency. With $35,000, you can achieve the same in Nicaragua.

And a passport from Nicaragua is a solid travel document. Nicaraguans had visa-free or visa on arrival access to 112 countries and territories in 2017.

For comparison, holders of a Chinese passport have  visa free access to 51 countries and territories, ranking the Chinese passport 85th in the world (tied with the Bhutanese, Chadian, Malian and Rwandan passports).

Nicaragua is the best deal for Chinese nationals because their passport provides access to the Schengen Region of the European Union. Passports with visa free access to the EU sell for $130,000 or more… and that’s the purchase price and not an investment. To get a passport of this quality with a $35,000 investment is an amazing opportunity. 

Keep in mind that I’m talking about how to get residency in Nicaragua from China. Residency allows you to live and run a business from Nica. Then, after 5 years, you can apply for citizenship. This is quite different from the passports for purchase programs described above (Dominica, St. Kitts, etc). If you have the cash, you can buy a passport and have it in your hands in about 90 days.

If you don’t have $130,000 burning a hole in your pocket, you can earn a second passport by moving to Nicaragua and becoming part of the community. You will need to spend at least 180 days a year in the country during your 5 years of residency. Once you have your passport, you can spend as much or as little time in Nica as you wish.

Remember, you can buy a passport with cash or earn it by living in the country. The government hopes you’ll become part of the community, spend money, maybe start a business and hire employees, etc.

For more information on how to become a resident of Nicaragua as a Chinese citizen, please contact us at info@premieroffshore.com or call us at (619) 483-1708. We’ll be happy to assist you to become a productive member of the community.

Joel Nagel on Second Passports
Christian Reeves

A Conversation with Joel Nagel on Second Passports

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Today I bring you an interview with Joel Nagel, one of the original founders of the second passport industry and is still the go-to guy on European and high value passports. Joel Nagel is a U.S. attorney who has specialized in second passports and international business since 1990. He’s also someone I’ve known and respected for over 12 years now. When I have a question on second passports, I call Joel Nagel.

As you can imagine from this fancy title, Joel Nagel has unique access and experience in Austrian second passport programs as well as those of his neighbors (such as Malta). Austria is the gold standard in second passports and Malta is one of the best available within the Schengen region.

For this reason, I met with Joel to get his thoughts on the second citizenship industry.

Conversation with Joel Nagel

Christian Reeves: Welcome Joel, thanks for being with us today. Second passports & economic citizenship has become big business. What do you think about the industry you helped create so many years back?

Joel Nagel: Thank you for having me Christian and good to see you again. You may be surprised to hear this, but I think the second passport industry has grown to fast and that some programs are out of control.

For example, the tiny nation of St. Kitts, with about 51,000 residents, has sold many thousands of second citizenships to anyone and everyone who could pay the fee.

The St. Kitts second passport program brought in $74 million in 2013 alone and accounted for about one third of the island’s total revenue. IMF forecasts suggest that the country has sold about $37 million passports per year from 2015-2017.

Numbers like this diminish the value of the St. Kitts second passport in particular and the second passport industry as a whole. In our industry, attention and front page news is a bad thing.

If you are considering a second citizenship, I suggest you look to a more discerning country. One whose passport will hold its value over time.

 

Christian Reeves: Which country do you recommend as the best second passport if money’s no object?

Joel Nagel: While a second passport from Austria gives you the best travel document (most visa free countries), I think that the Malta passport offer is the best available.

I like the fact that you can invest in real estate, bonds, etc. rather than into a business. Of course, if you want to start a business with employees, then that’s great. If you want to get a solid EU passport without having the headaches of operating a business, go with Malta.

For your information, a second passport from Malta requires three investments:

  • First, you need to donate €650,000 to the government. Dependents are additional.
  • Second, you must buy a home for at least €350,000 or enter a rental contract for at least €16,000 per year. You must maintain the home or keep the rental for a minimum of 5 years. Once that 5 year holding period has passed, you can sell the home tax free.
  • Third, you invest at least €150,000 in government bonds and hold those bonds for 5 years.

Do all of those things and you will get citizenship in the European Union.

 

Christian Reeves: Which second passport do you think is the best value right now?

Joel Nagel: That’s a difficult question because it depends on where you want to live. For example, if you want to be in the European Union, and can’t afford Malta, then go with Bulgaria.

A second passport from Bulgaria can be had with an investment of $1.2 million in government bonds. You get your investment back after 5 years with no “donation” required.

In the Caribbean, I suggest you avoid the volume sellers and look for something more discreet. For this reason, I like the St. Lucia second passport program. This island is new to the game and are very careful in their approval process.

Another reason I like St. Lucia is that you have the option of paying a fee (about $250,000) or making an investment of $500,000 to $550,000 in government bonds. If you go the investment route, you will get your capital back in 5 years.

For your information, the same group that wrote the Bulgarian statute wrote the law in St. Lucia. The major difference is that you must wait a year to get a second passport in Bulgaria, but you get one immediately in St. Lucia. And, of course, St. Lucia is half the investment of Bulgaria.

 

Christian Reeves: What about getting a second passport from the US? How difficult is it for someone from abroad to join team America?

Joel Nagel: Getting a second passport from the US is far easier than one might think. In fact, you can get US citizenship for about half the cost of Austria. So long as you have the cash, Uncle Sam is happy to have you.

For example, the US EB-5 investor visa gets you an immediate green card and US citizenship within 5 years. To qualify, you must operate a business in the US with at least 10 employees. The investment required varies from $500,000 to $1 million, much lower than the EUR 3 to 10 million required in Austria.

The catch with the US is that all green card holders and citizens are taxed on their worldwide income. Most other second passport countries won’t tax your income unless you are living and operating a business in their territory.

If, as you say, one wants to join team America, get ready to pay the US on every dollar you make anywhere in world. Even if you move out of the US, so long as you hold a US passport, you will pay US tax. The only exception is in the US territory of Puerto Rico, but I’ll leave that for another day.

 

Conclusion:

I hope you have enjoyed this transcript of a conversation with Joel Nagel. For more information on how to get a second passport from Malta, Bulgaria, or St. Lucia, or on the US EB-5 program, please contact us at info@premieroffshore.com.  I will answer your questions and get you connected with Joel.

For more on this topic, see my post Top 10 Second Passports

Trump Travel Ban
Christian Reeves

Trump’s next travel ban will affect up to 16 million American citizens

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Trump’s travel ban prohibiting those from 7 high risk countries from entering the United States for a few months has sparked protests across the country and crocodile tears from Senator Chuck Schumer. This ban affects a relatively small number of foreigners and caught 109 people “in the air,” who were held at US airports for hours on end.

Having been detained at two different airports over my many years of travel, I can relate to their pain. So far, 100,000 US visas have been revoked since Trump’s travel ban and a former Prime Minister of Norway was inconvenienced for a whole hour because he had visited Iran.

No matter your political affiliation, we all feel for those impacted by Trump’s travel ban (maybe not the PM, but everyone else). But these numbers are NOTHING compared to what’s coming for American citizens in 2017!

The Trump IRS will begin revoking or failing to renew the passports of Americans with “significant” tax debts in early 2017. If you owe more than $50,000, your passport can be taken away and you will be prohibited from leaving the United States.

About 16 million Americans, many of them expats, have significant tax debts. Thus, Trump’s 2017 travel ban will affect up to 16 million American citizens. It promises to be the largest travel ban enforced by any country since World War II.

If you owe more than $50,000 to the Federal government, including interest and penalties, your passport and right to travel can be revoked.

Also, the IRS must have made some effort to collect from you. This means that:

  • The IRS has filed a notice of federal tax liens and 90 days has passed without your filing an appeal.
  • The IRS must have attempted to levy your bank account.

It’s not required that an agent contacted or visited you. Nor is it necessary that you actually received the notice of tax lien or levy… just that they were mailed to your last known address.

Both of these collection procedures are automated – handled by IRS computers. Anyone oweing $50,000 or more for over 1 year will have had a lien and levy issued, so anyone with an qualifying tax debt can have their passport revoked.

There are some situations where the IRS is prohibited from collecting from you and from revoking your passport. If your tax debt meets the following tests, you will be exempt from the travel ban. If the debt is:

  • Being paid in a timely manner under  an installment agreement entered into with the IRS,
  • Being paid in a timely manner under an offer in compromise accepted by the IRS,
  • For which a collection due process hearing is timely requested for a levy, or
  • For which collection has been suspended because a request for innocent spouse relief under IRC Section 6015 has been made

In all other cases, if you owe $50,000 or more, you will land on Trump’s next travel ban list.

The process of placing a US citizen on this travel ban list requires that the IRS certify the debt (send a letter) to the State Department by stating that you owe $50,000+ and asking them to revoke or refuse to renew your passport.

When asked to refuse to renew or issue a passport, the State Department will hold the request for 90 days.

During this time you can negotiate with the IRS (not State) and attempt to resolve the debt. Your options are to pay in full, prove the debt is in error, or enter into an installment agreement that’s acceptable to the IRS.

There is no wait period allowing you to resolve your debt before the State Department revokes your passport!

Once your passport is revoked or refused ( the 90 day grace period passes), your ability to negotiate an installment agreement is gone. Your only options are:

  1. Pay the bill in full,
  2. Wait out the 10 year statute of limitations or successfully complete bankruptcy so that the debt is no longer legally enforceable,
  3. Pay the bill down so you owe less than $50,000, or
  4. Prove the debt is in error.

If you’re at risk of losing your US passport, there are two ways to avoid Trump’s travel ban. You can buy a second passport from a country like St. Lucia or Dominica, or you can gain residency in a country like Panama and move there.

It will cost you about $130,000 to buy a decent passport. You can get residency in Panama with an investment of $20,000 if you’re from a friendly nation.

However, both of these options must be completed before you lose your US passport. Once you’re on the travel ban list, no country will grant you residency or citizenship. Also, you will be unable to leave the United States, so there will be no way to complete the application process.

I hope you’ve found this article on Trump’s next travel ban to be helpful. For more information on how to settle your tax debt, to buy a second passport, or to negotiate residency in Panama, please contact me at info@premieroffshore.com or call us at (619) 483-1708. 

st lucia second passport
Christian Reeves

Changes to the St. Lucia Second Passport Program in 2017

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One of the hottest citizenship by investment or purchase programs is the St. Lucia second passport. An investment of $500,000 to $550,000 in government bonds, or paying a fee of $100,000 (single), gets you one of the top passports on the market.

Because of the popularity of the government bond program, they’ve made this option more expensive in 2017. Here are the new fees all the changes to the St. Lucia second passport program in 2017.

The new government fees as of January 1, 2017 for the “donation to the Saint Lucia National Economic Fund” citizenship program are as follows. Whenever you see the word “donation,” know it means purchase price.

  • Single applicant: $100,000
  • Husband and wife: $165,000
  • Husband, wife and up to two dependent children: $190,000
  • Each additional dependent child: $25,000

These fees don’t include other government charges, such as your background check, or legal fees. If you’re from a top country, like the US, UK, Canada, etc., additional fees are usually around $30,000 for a single applicant. If you’re from a country where a background check is more  difficult, such as China or India, expect to pay around $40,000.

If you prefer to get citizenship and a second passport in St. Lucia through investment rather than purchase, you can buy non-interest bearing government bonds. These 5 year bonds issued and guaranteed by the government.

A single applicant will need to invest $500,000 in government bonds and a husband and wife can invest $550,000 to qualify for a second passport from St. Lucia. You will get this investment amount back after 5 years. You won’t earn any interest but you get your investment back in full.

The new government charge as of January 1, 2017 for the purchase of these bonds is $50,000. This is a non-refundable fee applicable only to bond investors.

However, in practice, this is not really a “new” fee. Most agents and lawyers who facilitate these programs charge a fee of around $50,000. They don’t earn a commission on the bonds, so this was the standard fee being charged by the industry. What the government has done is to formalize the fee.

So, your total out of pocket costs for the government bond program are around $50,000. Your total out of pocket costs for the donation / purchase option are around $130,000. This assumes a single applicant from a top tier country.

The question becomes, do you want to lock up $500,000 for 5 years to save $80,000?

A husband and wife investing $550,000 into government bonds for 5 years will be saving  around $100,000. This is because of the additional legal fees associated with multiple applicants.

Of course, it ignores the opportunity costs associated with the investment. You get zero interest from St. Lucia and could have deployed your capital elsewhere.

Another way to value the St. Lucia bond program is that an investment of $500,000 gives you a return of $80,000 over 5 years. This is a ROI of $16,000 or just over 3% per year… not horrible and not to exciting.

No matter which program you chose, a second passport from St. Lucia is a top tier travel document. It gives you visa-free or visa on arrival access to 125 countries and territories, ranking the Saint Lucian passport 37th in the world. Click here for a list of visa free countries.

While a passport from St. Lucia doesn’t get you into the United States or Canada, it does give you access to all of the European Union. Most importantly, it gives you visa free access to the EU’s Schengen Region, which includes Austria, France, Germany, Italy, Spain, Switzerland, and 26 different European nations in all. Basically, it gets you anywhere you want to be in Europe.

If you’re focused on visa free access to the United States, you’ll need a passport from Malta. This one requires an investment of $1.2 million and is far more complex to acquire than St. Lucia.

For example, Malta has a physical presence requirement where you must live on the island for 183 days of the first year. You must also buy a home, and fulfill other terms. For more, see: Second Passport from Malta.

St. Lucia has no physical presence requirement or other hoops to jump through. So long as you have the cash, and a clean background (no criminal history), you’ll be approved.

And, again ignoring the opportunity costs, getting that passport for only $50,000 out of pocket, is an amazing deal. That’s a fraction of the cost of competitors like St. Kitts.

I hope this article on the St. Lucia passport program for 2017 has been helpful. For more information on this or other citizenship by investment options, please send an email to info@premieroffshore.com or give us a call at (619) 483-1708.

Barrons Interview
Christian Reeves

Barron’s Interview: Top 5 Second Passports for 2017

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Dear Readers,

My interview with Barron’s was published this morning. You can find it here:

Top Five Countries for Secondary Citizenship

And here are links to detailed posts on the countries that made my top 5 list for 2017:

  1. Dominica (best value)
  2. St. Lucia (best investment option)
  3. Malta (when money’s no object)
  4. Austria (the gold standard, I will publish on this one shortly)
  5. Dominican Republic (best low cost backup passport)

Feel free to contact me at info@premieroffshore.com or call us at (619) 483-1708 with any questions on second passports. We will be happy to work with you to find the best program and negotiate your citizenship.

Best Regards,

Christian Reeves

Publisher, PremierOffshore.com

second passport from the dominican republic
Christian Reeves

The Lowest Cost Second Passport is from the Dominican Republic

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The lowest cost second passport is from the Dominican Republic… period. The program from the Dominican Republic is a fraction of the cost of competitors like St. Kitts, Dominica, St. Lucia, and Malta.

If you’re looking for a low cost citizenship option, take a look at the Dominican Republic. If you want to maximize the value of the U.S. Foreign Earned Income Exclusion, or improve your asset protection and banking options, a second passport from the Dominican Republic might be the way to go.

Note that this article describes a second passport from the Dominican Republic and not Dominica. Dominica has a strong passport which is available for purchase for about $140,000. For more, see: A Second Passport from Dominica is the Best Value in the Caribbean

I should point out that Dominica and Dominican Republic are not direct competitors. The uses and benefits of a DR passport are very different from those of Dominica or the European Union passports we offer (such as Malta which requires an investment of $1.2 million).

Who the Dominican Republic second passport program is for…

Here’s how to get a low cost second passport from the Dominican Republic in about 8 months from the date your residency is approved.

A second passport from the Dominican Republic is for those looking to diversify their current citizenship. It’s for citizens of top tier countries, such as the United States, Canada, United Kingdom, European Union, Japan, Australia, New Zealand, etc. Those who already have a strong passport and want a supporting travel and citizenship document.

If you’re concerned with the state of affairs in your home country, and want a hedge against country risk, consider a second passport from the Dominican Republic.

If you want to have a second passport in hand in the event that you decide to expatriate from the United States, think about the Dominican Republic.

If you want a smooth transition or landing spot should you pull the ripcord on your exit strategy, having a second passport is key.

If you’d like to invest and transact in private, a second passport from the Dominican Republic will help.

If you’re a U.S. citizen and concerned with the IRS or another government agency confiscating your passport, you must have a second passport in hand before trouble comes. Keep in mind that a U.S. passport is not a right, it’s a privilege bestowed upon us by our government. Your U.S. passport can be revoked for any reason at any time.

For more on how and why the U.S. can revoke your passport, see;

The bottom line is this: if you’re a citizen of a top tier country, and want the privacy, and security of a second passport, the lowest cost option is the Dominican Republic.

Who the Dominican Republic second passport program is NOT for…

The second passport program of the Dominican Republic is not for those who need to upgrade their passport. If you’re looking for a passport with more visa free travel options, the DR is not for you.

A passport from the Dominican Republic gets  you visa free or visa on arrival access to only 54 countries and territories, ranking it 83rd in the world. Here is a list of visa free countries.

By comparison, a passport from China gives you access to 50 countries and a passport from India gets you access to 52 countries. There is little benefit to persons of these countries in buying a second passport from the Dominican Republic

Citizens of China and India are the most likely to want to upgrade their passports rather than diversify as Americans and Europeans do. For more on upgrading your passport, see: 10 Best Second Passports and Citizenship by Investment Programs For 2016

The lowest cost passport upgrade is Dominica at about $170,000 for a person from China and India (compared to about $140,000 for a U.S. citizen). You’ll receive your passport from Dominica in about 90 days.

The lowest cost residency program for Chinese and Indian nationals is Panama, which requires an investment of $80,000. You can apply for citizenship and a passport after 5 years of residency. This passport gets you visa free travel to 127 countries, including all of the European Union and the Schengen Region.

Citizens of China, India, and other restricted nationalities can apply for a passport from the Dominican Republic. I’m not suggesting you are ineligible… my point is that a DR passport won’t be a major upgrade to your current passport.

Process to obtain a second passport from the Dominican Republic

There are two second passport programs available from the Dominican Republic. The fast track investor program and the fast track retiree / foreign passive income option. Both will get you a passport within 8 months of your becoming a permanent resident.  

Fast Track Investment Option: Start a business in the Dominican Republic with an investment of $200,000 or deposit $200,000 into a bank in the Dominican Republic (typically a CD which will provide a nice rate of return).

For the business option, all you need to do is form a corporation and deposit the capital into a local bank. There is no requirement to hire employees, operate the business, or pay taxes in the DR.

Your $200,000 must remain in the corporate account, or in your CD, for a minimum of 3 years. Some local banks offer accounts in US Dollars, Euros, the Dominican Peso (which is the local currency)

If you change your mind, you may withdraw your money from the Dominican Republic at any time. In that case, your residency and citizenship application will be cancelled.

  • Early withdrawal penalties may apply to CDs or other long term investments. If you perceive risk in the DR banking system, and want immediate access to your capital throughout the application process, hold it in a corporate checking account.

Most applications for citizenship under this fast track program are completed within 8 months of your residency being approved. The timeline of the corporate option is as follows:

  1. We form a Limited Liability Company for you in the Dominican Republic. Typically completed in one week.
  2. You travel to the Dominican Republic to open the bank account with our assistance. We suggest you stay a minimum of 3 nights on the island.
  3. You deposit the $200,000.00 into your corporate bank account and receive a confirmation letter. Note that you are the only signer on this account and the funds are always under your control. Typical processing time is 5 business days.
    Reporting the investment and filing various documents with the government. This takes 30 to 40 days.
  4. You provide us the certified and apostilled documents listed below and return to the Dominican Republic for a medical exam. This can be completed in one day.
  5. We prepare and file your permanent residency application, which requires about 30 days. In most cases, your permanent residency will be approved in 2 to 4 months.
  6. You travel to the Dominican Republic to receive your permanent residency documents and photo ID.
  7. Once you have your residency card in hand, you must wait for 6 months before you can apply for Citizenship. Typical processing time of these citizenship and passport applications is 60 to 90 days. You will need to travel to the Dominican Republic to receive your passport.

If you’re able to travel as soon as each step is completed, and you provide the required documents in a timely manner, we can complete your citizenship application in 8 to 10 months after you receive your residency card, depending on your availability.

The only timeline that’s fixed by statute is the 6 month wait between receipt of your permanent residency card and filing for citizenship.

Retiree / Foreign Passive Income Option:  Retirees are those with passive income from retirement accounts. Passive income applicants are those with rental properties, dividends, foreign bank deposits (from banks outside of the Dominican Republic), investment returns from foreign companies, and other forms of passive income which has been earned over 5 consecutive years.

Retirees must show income from a pension or retirement plan of $1,500 per month plus $250 for each dependent. There is no minimum age requirement to be considered a “retiree.” So long as you have a pension plan sending you regular payments, you will qualify.

Passive income applicants must show a minimum fixed monthly income of $2,000 plus $250 for each dependent.

Dependents include your spouse and any children under 18 years of age. College students who can prove they are dependent upon you for support may also be included in your application.

The typical processing time for a retiree / passive investor application is 8 months after you have your permanent residency card in hand.

Documents to Become a Resident of the Dominican Republic

We will need the following documents from each applicant to complete your residency and second passport package for the Dominican Republic.

  1. One questionnaire per family unit, a notarized copy of each applicant’s passport, and a notarized copy of a utility bill showing the primary applicant’s name and home address.
    1. A family unit is the primary applicant, your spouse, and your dependent children under 18 years of age. Full time college students who are dependent on you for support may also be included.
  2. A complete copy of each applicant’s passport (every page, including blank pages). Each passport should have 4 months of validity remaining. If less, you should renew before applying to the Dominican Republic.
  3. A government issued birth certificate notarized and apostilled in your country, or at the nearest Dominican Consulate. This document must be translated to Spanish and the translation also must be certified.
  4. Government issued marriage and divorce as applicable. These are to be translated into Spanish, certified and apostilled.
  5. Resume or biography for the primary applicant. A resume or bio from your spouse will also be helpful. There is no specific format, just something that gives the reader an idea of your education, work history, and some interesting facts about you.
  6. If applying as a retiree, proof of your monthly pension translated to Spanish and certified by the Dominican Consulate and at the Ministry of Foreign Affairs of the Dominican Republic.
  7. If applying as a passive investor, proof of such income over the last 5 years translated to Spanish and certified by the Dominican Consulate and at the Ministry of Foreign Affairs of the Dominican Republic.
    1. For example, a copy of the fixed income contract/certificate of deposit will be accepted.
  8. If applying as a corporation, various corporate documents to be certified by a local notary and authenticated at the Attorney General’s Office. A
  9. Police clearance report or FBI background report showing no criminal record. This should come from your home country. If you have lived abroad for 5 years or more, this should come from your country of residence.
    1. U.S. citizens, click here for information on obtaining an FBI clearance report.
  10. If you have lived in the Dominican Republic for 30 days or more (for example, during the residency period but before applying for citizenship), each applicant 16 years of age and older should provide a Certificate of Good Conduct by the Dominican authorities.
  11. Each applicant over 16 years of age is required to provide 9 passport photos (6 front pictures and 3 right profile). For children under 16, 5 passport photos are required (3 front and 2 right profile). Pictures should be 2”x2”, against a white background, and accessories such as earrings or sunglasses are not permitted

From time to time, the government might ask for additional or supporting documents. You should begin collecting these documents after you submit the questionnaire. The police report or FBI report can take months to complete. If you plan to use the fast track or expedited fast track program, start on these ASAP.

Costs of Residency and a Second Passport in the Dominican Republic

The cost for a single applicant from the US, EU, UK, Canada, or a similar country is $35,000. The cost for a husband and wife is $45,000. Each dependent will add about $3,300, but fees will vary based on age and history.

Fees for those from restricted countries, such as China, India, Pakistan, African nations, etc. will vary from case to case. The average has been an additional processing and due diligence fee of $10.000 per adult applicant. So, a single applicant would be $55,000 and a husband and wife would be $65,000 on average.

The fees listed above include both your residency and citizenship. That is to say, they the include filing and management of your application throughout the program until you have your second passport from the Dominican Republic in hand. They also include all government and other costs.

The government of the Dominican Republic is planning to add one or two investment options to it’s second passport program in the coming months. While we don’t have any details yet, I expect they’ll be based around government bonds and green reforestation programs.

For example, it might be possible to invest $150,000 in teak and receive residency and a second passport in exchange. Alternatively, you might be allowed in invest $250,000 in government bonds for 5 years and become a citizen after 6 months.

No matter what changes come down, the lowest cost options will be those described above. If you have a pension or passive income, you can buy a passport from the Dominican Republic for $35,000. If you don’t have a consistent cash flow, you can deposit $200,000 and qualify for a second passport.

Second Passport Scams from the Dominican Republic

A number of countries have been the targets of passport scam artists. I’ve seen scams from Panama, Mexico, Antigua, Paraguay, Comoros, and the Dominican Republic.  

The program we are offering was signed into law in 2014 and became active in 2015. Any website promoting a DR passport before this date is a scam. Only a formal program, founded in the law, will guarantee you a second passport.

Likewise, any website promoting an “instant passport” from the Dominican Republic is a scam. All legal programs require you become a resident for at least 6 months before you apply for citizenship. There is no way to expedite or pay a fee to circumvent this requirement.

Before publishing on this low cost second passport offering from the Dominican Republic, I did a great deal of research. I made multiple trips to the island, met with lawyers, promoters, and government officers and cabinet members at all levels.

Still not satisfied, I reviewed the files of 42 completed applications and spoke with many of the investors over the phone. In this way, I was able to confirm that each and every applicant has been approved and had received their passport after the statutory waiting period.

This is to say, I’ve been aware of the DR program for many months now. I did not write it up until I did my of research and had followed over 40 cases from start to finish. Only then did I feel comfortable bringing this to my readers.

I’m now 100% confident in the second passport program offered by the Dominican Republic.

Contact Us

Please contact me for more information on the Dominican Republic second passport program. We will be happy to work with you to gain residency and a second passport from the DR. All consultations are confidential. You can reach me directly at info@premieroffshore.com or at (619) 483-1708.

IRS can take your passport
Christian Reeves

Expats, the IRS is Coming for your Passports

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Back in December I told you the IRS has the power to revoke your United States passport for past due debts. Now I’m telling you that the IRS has begun its attack on American expats… that the battle for your passport on… that the IRS has set the field and the first shots are about to be fired.

Here’s my original article: Warning: The IRS Can Now Revoke Your Passport (posted December 9, 2015)

To read the bill that takes away your freedom of movement, see: H.R. 22 – Fixing America’s Surface Transportation Act, the “FAST Act (signed by Obama on December 5, 2015)

As you read my comments below, remember that a United States passport is a privilege, not a right. Your government can take it away from you for any reason it sees fit.

The IRS has begun working with US Embassies and Consulates around the world to deny and revoke passports of Americans abroad who have not filed or owe the IRS.  If you are living outside of the United States, the IRS is coming for your passport.

Per this post from the The United States Embassy in Brazil, as of October 1, 2016, anyone attempting to renew their passport through the Embassy will be required to provide a Social Security number. That number will be used to review your IRS records before approving a passport renewal.

This means that, anyone who owes more than $50,000 to the IRS will be denied a passport. If you’re caught by local authorities without a passport, or overstaying your visa, you will be removed from the country and returned to the United States to face the collector.

It also means that anyone who has not filed their tax returns will likely have their passport renewal denied. Here’s how they will take your passport for not filing:

The law says your passport can be revoked or denied if you owe more than $50,000. When the IRS finds out that you are abroad and have not filed, they will prepare a Substitute for Return for you. They’ll estimate your income and assets and all manner of penalties, such as FBAR and offshore financial statement, and generally guesstimate a tax bill for you.

The resulting “substitute” balance due will certainly exceed $50,000. Thus, the Service will withhold or revoke your US passport for failure to file after inventing that phantom tax bill. You will be left with one option – return to the United States and negotiate a settlement.

It should be clear to everyone that the US IRS is waging a war on expats. The government wants to limit your freedom of movement and your right to live, work, invest, and hold money where you see fit.

Assuming you’re not the type to bow down, bend over, and be herded back to the United States like a lamb, what can you do to protect your right of self determination? What can you do if your United States Passport is revoked by the IRS?

You must have a passport to travel from place to place and live in any country outside of the United States. Also, a valid passport is often the only acceptable form of identification. Without it, you won’t be allowed to open bank accounts, transact business or execute wire transfers.

The best way to protect yourself from your own government is to buy a second passport. Many small nations sell citizenship and second passports. If you have a second passport, you have a safety net regardless of what happens with your US passport.

Here are a few of the best second passport options for Americans. For a more complete list, see: 10 Best Second Passports and Citizenship by Investment Programs For 2016

As you can see, a second passport is expensive. The next best option is to become a permanent resident of your country of residence. For example, if you’re living in Panama, you can become a permanent resident by investing $20,000 or setting up a business in the country.

Becoming a permanent resident will allow you to remain in the country no matter what happens with your US passport. But, a few words of warning:

  • You won’t be able to travel outside of your country of residence without a passport.
  • You won’t be able to renew your residency (if applicable) without a valid passport.
  • You must complete the residency process before your US passport is revoked or expires.

Buying a second passport can be completed in about 90 days once your documents are submitted. Becoming a permanent resident is usually completed in stages, often requiring a 2 year period as a temporary resident.

I also note that both of these processes will require a clean report from the FBI. Click here for more on how to request this report. Typical processing time is 60 days.   

Considering how aggressive the IRS has become in the last year, and the time it takes to process residency or a second passport, I suggest anyone concerned with the IRS, or the state of our government, should take action immediately. Once your US passport is gone, it’s too late to protect yourself or your family.

I hope you’ve found this article on the IRS coming for your passport to be helpful. For more on how to buy a second passport, or obtain residency in Panama or Mexico, please contact me at info@premieroffshore.com. All consultations are confidential and free.

IRA when you give up US citizenship
Christian Reeves

What Happens to Your IRA when you give up US Citizenship / Expatriate?

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Thousands of Americans will turn in their blue passports in the next few months. Some because of our crazy political climate, some to stop paying taxes into a broken system, and some because of FATCA and the international banking laws which make it impossible to live or do business abroad. This post will consider what happens to your IRA when you give up your US citizenship or expatriate from the United States.

Whatever your reason for giving up your US citizenship, you need to carefully plan the expatriation process. It’s be fraught with risks, costs, and problems for high net worth individuals.

First, let me define who is a “high net worth expatriate.” The IRS only cares about losing high earners and payors. They could give a damn about the rest of us.

When I consider what happens to your IRA when you give up US citizenship, I am referring only to this group high net worth expatriates.

According to the IRS, a high net worth expatriate is someone whose:

  • Average annual net income tax for the 5 years ending before the date of expatriation or termination of residency is more than $151,000 for 2012, $155,000 for 2013, $157,000 for 2014, and $160,000 for 2015. As you can see, this amount goes up each year and is tied to inflation’
  • Net worth is $2 million or more on the date of your expatriation or termination of residency, or
  • Fails to certify on Form 8854 that you have complied with all U.S. federal tax obligations for the 5 years preceding the date of your expatriation or termination of residency.

If you meet any of these criteria, you’re high net worth person (high value taxpayer) for US expatriation purposes, otherwise referred to as a “covered person.”

So, the question more properly framed is, what happens to your IRA when you give up your US citizenship or expatriate and you are a covered person?

  • High net worth covered persons pay tax as if their IRA was fully distributed to them on the day they expatriate.
  • The early distribution penalty does not apply.

The only published information from the IRS is Notice 2009-85. The discussion of specified tax deferred accounts Section 6 of this notice.

“The mark-to-market regime does not apply to specified tax deferred accounts. Instead, section 877A(e)(1)(A) provides that if a covered expatriate holds any interest in a specified tax deferred account (defined below) on the day before the expatriation date, such covered expatriate is treated as having received a distribution of his or her entire interest in such account on the day before the expatriation date. Within 60 days of receipt of a properly completed Form W-8CE, the custodian of a specified tax deferred account must advise the covered expatriate of the amount of the covered expatriate’s entire interest in his or her account on the day before his or her expatriation date.”

Note that the covered person is treated “as having” received a distribution. This is not the same as having your IRA account cancelled or closed. In fact, you have the option of continuing your IRA after giving up your US citizenship.

If you were to close your account and take a distribution, you’d be liable for the early distribution penalty. If you close your IRA as part of giving up US citizenship before reaching 59 1/2, you will pay a 10 percent early withdrawal penalty in addition to income tax on the amount withdrawn.

If you decide to keep the IRA open after expatriating, you’ll pay US tax when you take distributions from the account, presumably at age 70 ½. This tax will be calculated only on appreciation in the account from the date of expatriation.

That is to say, a covered person will pay US tax on all the gains in her account on the day she gives up her US citizenship. Then she’ll will pay US tax on the gains earned in that account after expatriating when she take the required distributions.

The IRA remains intact. All you did is “prepay” your US taxes on the account.

For example, you have $100,000 in your IRA on January 1, 2017 when you give up your US citizenship. You pay tax on this $100,000 on January 1, 2017 . You decide to keep the account open after expatriation and begin taking distributions 5 years later, in 2022. As of January 2022, your account is valued at $130,000. You will pay tax on the gain of $30,000 as you take these distributions.

Considering you will remain linked to the US tax system after expatiating through your IRA, you would have to be facing a very large early distribution penalty for it to make sense to keep an IRA open.

If you’re a 45 year old doctor who rolled a two million dollar defined benefit or profit sharing plan into an IRA, then you might keep the account going. If you have $150,000 in your IRA, pay the 10% penalty and be done with it.

I hope you have found this article on what happens to your IRA when you give up US citizenship to be helpful. The bottom line is that 95% of us should close our accounts and be done with the IRA. Only those facing large early distribution penalties should consider keeping their account open.

For more information on how to give up your US citizenship, and how to expatriate from the United States, please contact me at info@premieroffshore.com. 

Keep in mind that the first step in giving up your US citizenship is to get a second passport. Until you have a second passport in-hand, you can’t burn your blue passport. For ideas on where to buy a passport, see my article: 10 Best Second Passports.

E-2 Treaty Investor Visa
Christian Reeves

US E-2 Treaty Investor Visa Tax Strategy

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Moving to the US on with the E-2 Treaty Investor Visa comes with a very big hidden cost. You are by definition a US tax resident and required to pay US tax on your worldwide income AND report your foreign assets to the US government each year. Here’s how to reduce or eliminate that tax cost for the E-2 Treaty Investor Visa.

First, a few words on the E-2 treaty investor visa. This US residency program allows you to live in the United States so long as you are operating a business that employs a few American citizens. If the business shuts down, you will be asked to leave.

The E-2 treaty investor visa requires two things: 1) you must be from a treaty country, and 2) you must make an investment in the US by starting a business here. For a list of treaty countries, see the US Department of State website. I think you will be surprised with who’s in and who’s out.

The E-2 treaty investor visa is not a path to a green card nor US citizenship. It’s a residency visa that allows you and your family to live in the US while you are working here and employing a few people. Most investors start a business with about $200,000 and hire around 5 employees including the owner (you, the E-2 treaty investor).

The E-2 treaty investor visa doesn’t have a minimum investment amount nor a minimum number of employees. In my experience, businesses that are well funded through break-even with $200,000, and which will add 4 jobs to the economy (5 including the owner) are likely to be approved.

A person in the US on an E-2 treaty investor visa is expected to be running the business on a day to day basis. This is not a program for passive investors. It’s for those who want to start a small business in the US and work in that business each and every day.

  • Passive investors should go with the EB-5 Investor Visa. Here’s a tax strategy article for that program: Coming to America Tax Free with the EB-5 Visa and Puerto Rico. The EB-5 visa gives you a green card and US citizenship within 5 years but requires 10 employees and an investment of $500,000 to $1 million.

The E-2 treaty investor visa is a “temporary” residency visa that needs to be renewed every few years. Basically your case officer will check to see that the business is operating and the you are employing the agreed number of persons.

Because of its temporary status, you should have a plan to return to your home country once the business has run its course. As a practical matter, these companies can operate for decades. So, as long as the business is profitable, or you can keep it going by adding more cash, you can reside in the US. But, during the application process, we need to show a plan to return home.

E-2 Treaty Investor Visa Tax Issues

Because you are operating the business from the United States to qualify for the E-2 visa, all income earned in that corporation is US source income taxed at about 35% Federal plus your State (0% to 12%). This is to be expected when operating from the US.

What’s often not expected is US tax on your worldwide income.

Here’s an example of the E-2 visa tax trap: Let’s say you bought a house in Colombia in 1995 for $100,000. You move to the US in January of 2016 on the E-2 treaty investor visa and sell the home for $1 million in March of 2016 (yes, Colombia has an E-2 visa treaty).

You pay 10% in capital gains tax to Colombia on the sale, which is that country’s standard tax rate. In addition, you report the entire sale on your US tax return for 2016. The US capital gains rate is about 23.5% and you get a tax credit for the 10% paid to Colombia using the Foreign Tax Credit.

As a result, you owe the US Federal government 13.5% x $900,000 gain or $121,500 on the sale of your home in Colombia. If you’re living in a high tax State like New York or California, you’ll pay an additional 10.5% in capital gains. A very expensive tactical error which could have been avoided by selling the home before becoming a US tax resident.

Note: Had the capital gains tax rate in Colombia been 24% rather than 10%, you would owe nothing to the US Federal government and only paid State tax on the gain. That is to say, if the taxes paid in your home country are higher than the US rate, the Foreign Tax Credit will step in and prevent double taxation. ‘

The same tax expense will apply as long as you are in the US on the E-2 treaty investor visa program. All capital gains, interest income, income from businesses operated outside of the US, and income from any source, will be taxed in the US less any foreign taxes paid.

E-2 Treaty Investor Visa Tax Strategy

Careful tax planning is required before the E-2 visa applicant moves to the United States. Once you’re a tax resident, many planning opportunities are closed. For a high net worth individual, the tax costs of moving to the US can far outweigh the costs of starting the business and complying with the requirements of the E-2 visa.

For example, our Colombian could have sold his home before moving to the US and saved a lot of money and reporting hastle. Other possibilities are that he could have gifted his home to a family member or his heirs, sold it to an offshore trust, or otherwise disposed of it before coming to America.

And the same goes for brokerage accounts and other passive investments. There are a variety of offshore trusts, life insurance structures, and tax strategies that will allow you to manage assets for the benefit of your heirs and avoid US capital gains on any sales.

Also, special consideration should be paid to the US death tax. In certain circumstances, an E-2 visa holder is a US resident for income tax purposes but not for estate tax purposes. If someone was to die in that situation, they would be taxed in the US on all of their US assets and allowed only a $60,000 exclusion. US citizens get a $5.2 million estate tax exclusion.

US trusts and other planning tools should be considered to ensure the E-2 visa holder gets the full $5.2 million exclusion. None of us like to talk about death, but it’s an important conversation to have prior to moving into the United States.

As for an active businesses, different rules apply depending on whether the company is controlled by the US resident or whether it’s a joint venture with a nonresident partner. “Control” means ownership or control of more than 50% of the business.

If you, the E-2 visa applicant, sell or transfer half of their foreign business (not the E-2 business) to a family member who will operate it while you are in the US, you may realize significant tax savings in the US. Note that I am referring to an active partner and not a nominee director.

There is one way to enter the US on an E-2 treaty investor visa and pay zero tax to the US government. If you setup your business in the US territory of Puerto Rico, you will pay only 4% in corporate tax on the profits earned from that endeavor.

Next, if you are a resident of Puerto Rico, and spend 183 days a year on the island, you will pay zero capital gains taxes and zero tax on dividends from your Puerto Rico company.

Combine these two tax strategies together and you get a 4% tax rate on business profits and zero tax on passive income, dividends and capital gains. Compared to the 45% rate some Americans in high tax states pay, this is an amazing offer.

And, as a US territory, an E-2 visa from Puerto Rico is identical to an E-2 visa from New York or California (except for the tax rate of course). You’ll have full access to the United States and the right to come and go as you please. Travel between Puerto Rico and the United States is a domestic flight and there’s no immigration checkpoint.

The tax holiday in Puerto Rico for businesses is Act 20. The holiday for personal income and capital gains is Act 22. For more on this, see: How to Maximize the Tax Benefits of Puerto Rico

Note that my articles on Act 20 and 22 are focused on US citizens moving their businesses to Puerto Rico. We can also combine Act 20, 22, and the E-2 treaty investor visa to get you residency in the US without the tax bill.

I hope you have found this article on US E-2 Treaty Investor Visa Tax Strategy helpful. Please contact me at info@premieroffshore.com or call (619) 483-1708 for more information. I will be happy to assist you to build a business in the US or Puerto Rico and qualify for residency.

panama residency
Christian Reeves

How to get Residency in Panama Using Your IRA

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Here’s how to get residency in Panama using your IRA or other US retirement account. If you want to get residency in Panama through investment, you can use your retirement account in one and only one opportunity.

First, let me mention the rules in play when you make an investment and get residency in Panama using your retirement account. These rules significantly restrict your options to get residency, but there is one path open you you.

Note that, even when you take your IRA or other retirement account offshore, you must follow all US IRA rules. If you get caught cheating, your entire IRA may be considered distributed, taxes due on the total amount (not just the amount used improperly), plus a 10% penalty for early withdrawal and other charges.

The most important IRA rule is that you can’t receive a personal benefit from investing your IRA. So, you can’t simply invest $x in Panama and get residency in return. The residency permit must be done as a side deal not directly related to the investment made by your IRA.

Second, you can’t borrow from your retirement account. As the owner of an IRA, you are prohibited from borrowing against the account for more than 60 days. Therefore, you can’t borrow from your IRA to invest in Panama. The investment must be made by your IRA and the asset must be titled in the name of your IRA or your IRA LLC.

Third, let’s consider the residency programs in Panama. For a complete list, see my article Top 6 Panama Residency Programs.

The options that require an investment are the Person of Means visa, the Friendly Nations Visa, and the Reforestation Visa.

Because a person with a US retirement account is likely a US citizen, and thus from a “friendly” nation, we will ignore the Reforestation Visa option. That visa is intended for people not from friendly nations. This is because the friendly nations investment program requires an investment of $20,000 and the reforestation visa requires an investment of $80,000. For a list of “friendlies”, see: Best Panama Residency by Investment Program.

So, we’re left with the Friendly Nations visa and the Person of Means investment offerings.

In order to qualify for residency in Panama using the Person of Means visa, you must a) deposit $300,000 in a bank account in Panama, 2) buy a home for at least $300,000, or 3) invest a minimum of $100,000 in a two-year certificate of deposit in a bank located in Panama and buy a home in Panama. The combined total of your CD and real estate should be at least $300,000.

The Person of Means visa requires that the bank deposit, CD, and/or real estate be in your name. You can’t use a corporation or trust. Because the investment in Panama for the Person of Means visa must be titled in your name, this program is not compatible with the US IRA rules.

Your IRA LLC, or assets purchased with your retirement account, must be titled in this manner:

US Custodian, Inc. FBO Your Name IRA # 55-55555555

Remember that, even after you take your IRA offshore through an IRA LLC, you will have a US custodian involved. You will be in control of the account and the custodian will be responsible for annual filings in the United States.

FBO = For the Benefit Of

And here lies the conflict – any investment made by your IRA must be titled in the name of your account. If you’re using an offshore IRA LLC, the investment can be titled in the name of your LLC. Under no circumstances may an IRA investment be titled in your name.

If you were to use IRA money to buy a home, CD, or deposit into a bank account in Panama, and that account is in your name (not in the name of your IRA), this would be a distribution subject to US taxes and penalties.

Now we’re left with the Friendly Nations visa. If you want to invest in Panama using your IRA or other retirement account and get residency in return, this is the only option available.

And the only investment compatible with both the IRA rules and the Friendly Nations Visa is teak. If you invest $20,000 in teak, you will get residency in Panama for free (included in the investment amount.

When you invest in teak to get residency in Panama through your IRA, you need to break-out the investment and the costs associated with residency. To avoid self dealing, you invest about $16,000 in teak through your IRA and pay other fees of about $4,000 from your personal savings (not your IRA account).

You will get teak of the same value had you invested $20,000 and avoid the IRA self dealing rules. And you and your family may all apply under the Friendly Nations visa with an investment in teak.

Note that this Panama residency option also avoids the issue of titling. You can hold the investment in teak in the name of your retirement account or in the name of your IRA LLC and process the Friendly Nations visa under your name.

If you would like to get residency in Panama using your IRA or other US retirement account, the Friendly Nations visa is your friend. For more information, please contact me at info@premieroffshore.com or call (619) 483-1708. We will be happy to work with you to get residency using your IRA.

residency and second passport
Christian Reeves

What’s the Difference Between Residency and a Second Passport?

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I’m asked just about every day to compare Panama residency with a second passport program from somewhere in the world.  The caller usually has $200,000 to $500,000 to spend or invest and wants to know whether they should go for residency or a second passport. Here’s what you need to know about residency and second passport.

As for residency, I suggest Panama is the best available. If you’re from a “friendly nation,” then you can get residency for about $8,750, or even for free. If you’re not blessed with a good passport, then you need to deposit $300,000 into a Panama bank account and pay about $30,000 in fees.

Residency allows you to live in that country. It usually permits you to operate a business there but not be employed by someone else. There are many different visas available in Panama, in addition to the Friendly Nations visa, and some do include a work permit.

Once you’ve had residency in Panama for 5 years, you may apply for citizenship. This doesn’t mean you will get a second passport, it means only that you may apply for one. The decision to grant citizenship lies solely with the president – whomever that may be 5 years from now.

Some presidents, such as Martinelli, gave out Panama passports to anyone who made sizable donation to his campaign. On the other hand, the current president, Juan Carlos Varela, is all about fighting corruption. I don’t think he’s granted even one Panama passport in his 3 years in office.

My point here is that residency means you can live in a particular country. It does not give you a travel document nor any of the benefits of citizenship. If you want to live in Panama and/or maximize the benefits of the Foreign Earned Income Exclusion, then you need residency in Panama. If you want a low cost exit plan, consider residency from Panama.

If you want a passport, then you can wait and hope that a “friendly” president comes to power… and with a “donation” amount you can afford… or you can buy a second passport from a country that offers economic citizenship.

A second passport is a whole different level of global access above residency… and at a completely different price point.

Someone from the US can get residency in Panama for $8,750. Someone from India can get residency for $30,000 + a deposit of $300,000 in a bank in Panama. This $300,000 is not a cost. The money belongs to you and can be taken out any time.

On the other hand, the minimum price for a second passport is $150,000, and can go as high as $8 million. Most second passports are sold for $240,000 or can be acquired with an investment of $550,000 + fees of $40,000.

Economic citizenship gives you all of the rights and privileges of a citizen from whichever country you buy in to. This means the right to live, work, vote, etc. It also gives you a passport from that country.

Second passports are valued based on 1) the number of visa free travel options they include and 2) where they allow you to live and work.

For example, a second passport from St. Lucia gives you visa free travel to 125 countries, which is very good. The cost is about $240,000 for St. Lucia.

For comparison, a second passport from Malta gives you visa free travel to 168 countries, including Canada and the United States, the two countries most difficult to access. A passport from Malta will cost about $1.2 million plus legal and other fees.

A passport from Matla also allows you to live and work anywhere in the Schengen Region of the European Union. Schengen encompases 26 countries including Austria, Germany, France, etc. For a complete list, click here.

So, St. Lucia is a valuable passport because it gives you access to 125 countries, plus an exit plan, the ability to give up your US citizenship and escape the IRS, etc.

A passport from Malta is valuable for all of these reason, plus several more visa free countries and the ability to live anywhere in the European Union.

Fore more, see Top 10 Second Passports, which includes a variety of economic citizenship options at different price points.

Here’s the bottom line on residency and second passports:

If you want to live in a country like Panama, then you need residency there. If you’re an American operating a business abroad, then you need residency to maximize the value of the Foreign Earned Income Exclusion. If you want a low cost exit plan, then you can start with foreign residency.

If you want a second passport, then you need to buy a second passport. This is the only guaranteed route to acquiring economic citizenship and a quality travel document.

I hope you have found this article helpful. Please contact me at info@premieroffshore.com or call (619) 483-1708 with any questions on second passports or residency programs. If you are from a friendly nation, can even help you get Panama residency for free.

panama residency
Christian Reeves

Best Panama Residency by Investment Program

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If you want to plant a major flag offshore, think about residency in Panama. For those who qualify, the best residency in Panama is the Friendly Nations Visa . Of the 8 or 9 visa programs Panama is running at any given time, the best Panama residency program is the Friendly Nations Visa.

Here’s why you want residency in Panama and how to get it.

Why You Want a Foreign Residency

If you’re an American, you have many reasons to want a second residency. Getting that residency in a tax friendly jurisdiction such as Panama is a no brainer.

First, Panama residency will allow you to maximize the benefits of the Foreign Earned Income Exclusion. If you’re living AND working abroad, you can exclude up to $101,300 of salary from your US taxes. A husband and wife operating a business from Panama could earn $200,000+ per year tax free.

I won’t bore you with a dissertation on the FEIE, as I’ve been known to do. Suffice it to say that, if you qualify for the Exclusion using the Residency Test, you can spend 4 months a year in the US. If you don’t have residency, then you must use the Physical Presence test and be out of the US for 330 out of 365 days.

Second, Panama allows you to plant a major flag offshore. Once you have your international bank account and your offshore structure, the next flag to plant is residency. Residency in Panama demonstrates that you are an international citizen – someone who is experienced at living, working and investing abroad.

Third, Panama residency gets you access to all of the international banks in Panama. About 90% of Panamanian banks prohibit US persons unless you have a residency permit. Big banks, such as Banco General, CrediCorp, Global Bank and Scotia Bank (the Canadian Bank with offices in Panama) all restrict access to US persons with residency in Panama.

Fourth, Panama residency gives you a place to “land” should you decide to leave the United States. Maybe you’re retired and don’t care about the tax benefits (the FEIE doesn’t apply to passive income or capital gains). If you’re planning an exit strategy, foreign residency is a must.

If you are concerned with the direction of our country, finding a safe haven, then residency is one of the most important flags to plant. First is an offshore structure, then offshore bank account, and finally residency for the trifecta.

Why Panama has the Best Residency Program

Panama has the best residency program because:

  1. If you are from a friendly nation, a residency visa is very easy to get.
  2. Panama is a place you can live and work tax free (if you have a portable / internet business).
  3. Panama is a place many people would like to live. It’s one of the top business and retirement options for those seeking a higher quality and lower cost quality of life.

Considering Panama is where you want to be for lifestyle as well as business reasons, and because their residency permit is easy to get, Panama is my number one recommendation.

Let me be clear, I’m not here to analyze a bunch of jurisdictions and hedge my bets. I’m here to tell you what I think. Yes, I’m a big fan of Panama… a cheerleader if you will. Bullshite like the Panama Papers have reinvigorated that feeling.

Premier is incorporated in Panama, it’s the home base of this business, it’s where I have lived for years at a time, it’s where I travel to often these days, and Panama City one of the best places in the world to live and work. Likewise, Boquete is one of the best places to retire on a budget.

Updated List of 50 Friendly Nations for the Panama Residency Program

In order to qualify for the Friendly Nation visa, you must hold a passport from an approved country. One that is “friendly” with Panama.

Here is the current list of friendly nations for the Panama residency by investment program. This list has been updated through May 24, 2016.

If your country is listed here, you may apply for residency in Panama under the friendly nations Panama residency program.

If your country is not listed, then you may apply for residency in Panama under one of their other programs. In most cases, you will need to enter under the Person of Means visa by making a substantial investment or a deposit of $200,000+ into a local bank.

For example, if you hold a passport from India, then you do not qualify for the Friendly Nations Panama Residency visa. The only way to get a visa from a non-friendly nation is to make an investment or deposit in a local bank.

For more information on countries NOT listed below, please see: Residency in Panama from Restricted Countries

Andorra Czech Republic Israel Netherlands South Korea
Argentina Denmark Japan New Zealand Sweden
Australia Estonia Latvia Norway Switzerland
Austria Finland Liechtenstein Poland Taiwan
Belgium France Lithuania Portugal USA
Brazil Germany Luxembourg Serbia Uruguay
Canada Greece Malta Singapore United Kingdom
Chile Hong Kong Monaco Slovakia Costa Rica *
Croatia Hungry Marino Spain Mexico *
Cyprus Ireland Montenegro South Africa Paraguay *

* Most recent friendly nations visa additions.

Italy: You might notice that Italy is the only Western European country not on the list. There are other EU countries missing (such as my favorite second passport option, Bulgaria), but Italy is the only major nation not on the list. This is because Italy and Panama have an unique immigration agreement that allows Italians to move to Panama without the Friendly Nations visa.

How to Get Panama Residency for Free

The typical cost for Panama residency under the Friendly Nations Visa is $8,750 for the first applicant. As I’ve said, it’s one of the easiest and least expensive foreign residency visas to get. It’s also one of the best because it’s Panama is a great place to live, work, and do business.

Now, here’s how to get residency in Panama for free…

Option 1: You can pay a fee, form a corporation and get Panama residency for $8,750 as I said above.

Option 2: You can make an investment in an approved project in Panama and get residency. Most projects are condos or other real estate costing hundreds of thousands of dollars. That’s not what I’m talking about.

There is one and only one investment you can make with a guaranteed return. One that costs only $20,000, including residency in Panama. One that doesn’t come with any carrying costs or tax obligations.

That’s an investment in teak wood….

Teak has always been a prized material. The tree that teak comes from, Tectona grandis, is native to the tropics. Since around the 7th century, it has been used to outfit and adorn the residences of the wealthy and powerful In addition to the most beautiful furniture, Teak is used in shipbuilding. It makes for an excellent ship wood due to its ability to ward off dry rot

Since the best wood furniture made from teak comes from mature trees, it can take around 25 years before a teak tree planted today is harvested for wood.

Here’s why I recommend only one teak program and why that investment is guaranteed.

The teak wood plantation I recommend has been established for years. The trees have been in the ground for 17 year already. The trees and the quality of the teak are  verifiable and proven.

This is not one of those mango or coffee “opportunities” you read about on the web. Some deal that you invest in now and hope your crop gets planted. This is teak that’s been in the ground for many years. Teak that is verifiable and guaranteed. Teak that comes with Panama residency.

As I said above, I’m a big supporter of Panama. I believe it’s where you want to have a second residency. Where you want to plan your exit strategy. Where you want to have your home base.

Combine this with the fact that you can get your Panama residency for free through an investment in teak, and I’m all in. This is truly a unique opportunity.  

I will close by telling you that I am writing about teak in this post on residency solely because I believe in it. No one has paid me to do this and I don’t make any money if you buy teak.

In fact, the opposite is true. If you hire me to negotiate your residency in Panama for $8,750, I make money. If you buy teak and get residency for free, I make nada. That should tell you how much I believe in this program. I am writing on this residency and teak program because I believe in it. Because I want to support the Panama I love and to let my readers know what’s available.

I hope you have found this post helpful. If you would like to learn more about the Panama residency program, or how to invest in teak to get your residency visa for free, please contact me at info@premieroffshore.com. I will connect you with experts on the ground who can help.

eb-5 visa
Christian Reeves

Coming to America Tax Free with the EB-5 Visa and Puerto Rico

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If you are thinking about coming to America, get ready for high taxes on your worldwide income. In this article, I will explain how to become a US citizen using the EB-5 Visa and Puerto Rico to pay near zero US taxes.

The US taxes its citizens, as well as green card holders and residents, on 100% of the money they make from all sources around the world. If you are living in the United States, America wants her share… and that share is often over 40% of your total earnings.

If you are operating a successful business from Hong Kong, and you move to the US, all profits of that Hong Kong business become taxable. If you move to America and then sell your home in Singapore, you will pay US tax on the capital gains realized.

There is one, and only one, way to get US citizenship without paying these taxes. That is to come to America tax free with the EB-5 Visa from Puerto Rico.

Because Puerto Rico is a US territory, US Federal immigration laws apply but US tax laws do not. The tax laws of Puerto Rico supersede the US tax rules for residents of the island. Because of this hybrid legal system, you can immigrate to the United States through Puerto Rico using the EB-5 visa and qualify to live tax free under Puerto Rico’s tax laws.

  • Resident: A “resident” of Puerto Rico is someone who spends at least 183 days a year on the island. Travel between Puerto Rico and the US is a domestic flight with no immigration checkpoint.  As an EB-5 visa holder, you may spend the rest of your time (180 days a year) in any part of the US you choose.

Once the EB-5 visa process is complete, you will be a US citizen with all of the rights and privileges of someone born in the US and who pays 40%+ in taxes. You will have a US passport and the right to live and work anywhere in the country.

The same is true of children born in Puerto Rico. Anyone born in Puerto Rico is a US citizen at birth, just as they are if born in a State. The only difference between Puerto Rico and the US in this case are its tax laws.

Here is a description of the EB-5 Investor Visa, a summary Puerto Rico’s tax laws, and how to maximize the benefits of both to become a US citizen tax free.

What is the EB-5 Investor Visa

The EB-5 investor visa is a path to US citizenship. Unlike many other US immigration programs, the EB-5 visa has no waiting lists, quotas, or lottery. The terms are simple – make the investment, wait five years, and become a US citizen by going through the naturalization process. If you follow the steps, citizenship and a US passport are guaranteed.

The investment required for the EB-5 investor visa is far higher than any other program. You must invest in a business that creates at least 10 new jobs and maintains those jobs for about 6 years (the total time to complete your citizenship process).

The amount of money you are required to invest will depend on where the business is located. Most cities in the US require an investment of $1 million. If you set up the business in a distressed region of the country, the investment is reduced to $500,000.

Basically, all of Puerto Rico is designated as a distressed region for the EB-5 investor visa. Any business created on the island will qualify for the discounted investment amount of $500,000.

Of course, you will need to keep the business operating and profitable for at least 6 years with 10 employees. If you can do that with $500,000 in capital, great. If it requires more, then you will need to invest more.

What is Puerto Rico Act 20 and 22

When the EB-5 investor visa is combined with the tax benefits of Puerto Rico, you may be able to immigrate to the United States, obtain a green card, and finally citizenship with a US passport, all without paying a dollar in tax.

In order to accomplish this feat, we combine the EB-5 Investor Visa with Act 20 and Act 22 in Puerto Rico. I will briefly summarize them here.

Act 20 is the business tax holiday that gets you a 4% corporate tax rate on any profits earned by your Puerto Rico company. The requirements are simple:

  1. The minimum number of employees required for Act 20 business is 5. However, to qualify for EB-5, you need 10. So, we setup an Act 20 company with 10 employees.
  2. The company must be providing a service from Puerto Rico to persons or companies outside of Puerto Rico. Internet marketing, call centers, import / export, sales teams, and any online business are good candidates for Act 20. Retail businesses, franchises and restaurants do not qualify for Act 20. They do qualify for the EB-5 visa, but not for the tax deal.

For more detailed information on Puerto Rico’s Act 20, see: How to Maximize the Benefits of Puerto Rico Act 20

Act 22 is the personal tax holiday. A legal resident of Puerto Rico, who purchases a home, spends at least 183 days a year on the island, and signs up for Act 22, will pay zero capital gains tax and zero tax on dividends from his or her Puerto Rico company.

When you combine Act 20 with 22, you get a corporate tax rate on profits of 4% and zero tax on distributions of dividends from those profits. The only tax paid is the 4% corporate rate.

I also note that salaries in Puerto Rico are lower than anywhere in the US and that they might be going lower. Minimum wage is $7.25 and a recent House bill exempts Puerto Rico from increases in the Federal minimum wage for the next 5 years.

For more information on recent legislation, see: Good News from Congress for Act 20 Business in Puerto Rico

How to Combine the EB-5 Investor Visa with Puerto Rico Act 20 and 22

In order to combine the immigration benefits of the EB-5 investor visa with the tax benefits of Puerto Rico, we can setup an internet business or other service based company for you on the island.  That company will have 10 employees and qualify under Act 20 and EB-5.

For example, the business might provide content, design, advertising, and SEO services to persons and companies outside of Puerto Rico. Alternatively, the business might import goods from China and sell them to a distributor in the US (may operate as a wholesaler but not a retailer).

For a complete list of services that qualify for Act 20, please send an email to info@premieroffshore.com.

You may fund the business with $500,000 to $1 million in capital. Remember that the business must be self sufficient for at least 6 years and that your investment should cover costs until break-even. Your business plan must show a stable and profitable business will be operating from the United States with at least 10 employees.  

As I said above, profits of this business will be taxed at 4%. Dividends to you, a resident of Puerto Rico, will be tax free.

What if you Don’t Want to Live in Puerto Rico?

You are not required to live in Puerto Rico to qualify for Act 20 or for the EB-5. Only Act 22, the personal tax holiday, requires you be a resident of the island.

If you immigrated to the US with an EB-5 investor visa, and setup an Act 20 company, but did not live in Puerto Rico, you would pay 4% in tax on Puerto Rico sourced income. You could then hold net profits from Puerto Rico sourced income in the corporation tax deferred.

If you are living in the US, you would pay US tax on any dividends or distributions from that Puerto Rico company. You would also pay US tax on income from your investments outside of the US.

So, Act 20 will get you tax deferral in your EB-5 business. Act 22 gets you tax free distributions from that EB-5 business. Act 22 also cuts your US tax rate to zero on capital gains on assets acquired after your move to Puerto Rico.

How to Use an E-2 Visa to Expedite an EB-5 Visa Application

The EB-5 visa process is a long one. Remember that it comes with guaranteed US citizenship and green card.  As such, the process is demanding.

It will take well over a year to have your EB-5 visa approved. If getting into the United States as quickly as possible is important to you, then you might apply under the E-2 visa program first.

We can setup an Act 20 business with an E-2 and get your temporary visa in 30 to 90 days. This gets you and your family into the country.

You then operate the business with 5 employees under E-2 until your EB-5 is approved. When you get your green card under the EB-5, you hire 5 more employees for a total of 10. This is because the E-2 and Act 20 require 5 employees. When you are ready to upgrade to the EB-5, you can add 5 more for a total of ten employees in Puerto Rico.

Note that the E-2 visa is only available to those from treaty countries and has different requirements from the EB-5. For more information, see E-2 Treaty Investor Visa

How I can Help

We can assist you from start to finish in setting up an EB-5 and Act 20 compliant business in Puerto Rico. This includes writing the business plan, financial analysis, and everything related to applying for the EB-5.

Next we will incorporate your business, lease office space, hire and train employees, and get the business operating. This will include an Act 20 contract with Puerto Rico that will guarantee your tax holiday for 20 years.

We provide a turnkey solution in Puerto Rico that will maximize the benefits of the EB-5 and tax benefits of Puerto Rico. For more information, you can reach me directly at info@premieroffshore.com or by calling (619) 483-1708.