As America hurdles towards default, more of us are considering diversifying out of the United States and planting the first flag offshore. While there may be some last minute backroom deal to stave off disaster, many of us have lost confidence in a system out of control.
If this resonates with you, I suggest you plant that first flag offshore. Create a safety net and a conduit to move assets abroad before these avenues are blocked.
For example, most experts agree that it will soon become impossible to invest or move your retirement account offshore. In order to take control over your IRA, you must form an offshore IRA LLC and invest your retirement in to that structure. These LLCs have been around for 20+ years, but their demise is eminent as the US government attempts to gain control over its citizen’s savings and assets.
Another example is the much maligned Foreign Account Tax Compliance Act (FATCA) legislation. This law basically requires all banks around the world to report to the IRS. It doesn’t matter if that institution has a branch in the US or any ties whatsoever to America. So long as it accepts US clients, it must report to the IRS. Failure to comply will result in fines, penalties, closing of correspondent accounts, the inability to transact in US dollars, and basically, making it impossible to do any business at all.
As a result, many banks have closed their doors to Americans. Those who still accept us have had to put in place special data gathering, reporting, and investigating processes that have cost even the smallest of banks millions of dollars. These costs are being passed on to account holders in the form of new application and monthly fees…which only apply to accounts with American signors.
- FATCA doesn’t come in to full effect until July 1, 2014, so plant that first flag offshore as soon as possible.
What form might that first flag take? Here are a few options with links to find out more about each.
Offshore Retirement Accounts
You can take control over your retirement account, move it in to an offshore IRA LLC, open offshore bank and brokerage accounts, and get your savings out of the US. You can move some or all of your retirement assets from a prior employer. You can leave some with your current provider and transfer the balance to your LLC.
- For an introduction, see my article on Offshore IRA LLCs.
- For a different take, see my article on Making Your IRA Confiscation Proof.
- For the tax benefits of taking your account offshore, see Tax Benefits (about half way down, in the section titled Take Your Retirement Account Offshore).
You can form an offshore corporation, open a foreign bank account, and fund that structure with as much or as little as you like (depending on the bank selected). This will plant a flag, open a conduit to an offshore bank, and create a layer of asset protection not available in the United States. Should trouble arise, or you simply wish to diversify or move abroad, you are ready to go.
- The basics can be found in my article titled Offshore Corporations.
- For information on tax saving opportunities, see Eliminate US Tax in 5 Steps.
- Worried about getting scammed or in to trouble with an offshore structure? Checkout my article Offshore Asset Protection Scams and How to Avoid Them.
Invest in Foreign Real Estate
Want to get money out of the US and in to an appreciating asset that can’t be seized by Uncle Sam? Consider investing in foreign real estate. While I recommend Belize, Panama and Colombia as great growth markets that are sufficiently developed and therefore relatively safe, just about anywhere in the world will provide some level of protection.
There are only three exceptions to this rule. The US has IRS levy agreements with Canada, France and the UK that allow the government to grab and sell real estate in these three countries. No court action is required and no extra protections are provided. Real estate in Canada, France and the UK is just as vulnerable to attack as property in the United States of America.
- For the benefits of investing in offshore real estate, please read US Tax Breaks for Offshore Real Estate.
- For information on Panama, checkout Is Panama the Next Singapore?
- For information on Belize, checkout our Escape Artist portal.
I hope you have found these articles and reports helpful. Please contact me at firstname.lastname@example.org or (619) 483-1708 for a confidential consultation on planting your first flag offshore.