Have You Heard? Going Offshore Is Your Best Bet

Traveling in the United States as I am right now, I am reminded, as I always am when spending time in this country, that this is one of the easiest places in the world to be.

Life in the Good ol’ US of A is nothing if not comfortable and convenient.

You might wonder, therefore, understandably:

First, because, for me, the flip side of comfortable and convenient is dull and predictable. Life in the United States is fully figured out, leaving little room for the unexpected and the incalculable.

Then there’s the overregulation, overreach, invasions of privacy, and poor government stewardship of the people’s money that dominate this landscape.

For me, these things add up to undeniable impetus to vote with my feet and my finances and keep moving both myself and my assets around the world at large.

That said, I think it’s important to approach going offshore as an opportunity rather than an escape.

This isn’t a political decision. It’s a practical one.

Diversification. It’s the key to success in all things, from personal happiness to a healthy portfolio. And you don’t have to go physically offshore, not immediately and maybe not ever, to reap the benefits.

Having a residence permit that allows you to stay in another country indefinitely, should you decide you’d like to, can be a cornerstone of any diversification program and a good idea even if you have no intention right now of moving yourself anywhere. A backup residency, as I think of it, keeps your options open down the line. Many countries allow you to obtain legal residency without having to be resident full time or even most of the time to maintain your residency status.

Furthermore, setting up residency in another country now can allow you to start the clock ticking toward a second citizenship down the road, and a second citizenship has become a more practical and urgent requirement in today’s world than it’s ever been. It opens doors and creates options in an age that demands options.

An EU passport, for example, gives you the right to work and live in any of the 28 member states, and a Panama passport allows you to work in protected professions and to own protected businesses—retail, for example—in that country.

Those are practical benefits of diversification of your life and lifestyle. What about the benefits of diversifying your assets?

Moving part or all of your business, if you have one, offshore can make it possible to defer taxes, helping your business to grow faster. It could also mean less regulation. It definitely would allow you to protect the business from the most litigious population on earth (that is, Americans).

Your nonbusiness assets can be protected offshore, as well. Moving some or all of your assets offshore accomplishes two things. The first is asset protection (with the help of holding companies and/or trusts).

The second benefit of taking nonbusiness assets offshore may not seem as important but is.

I’m thinking of the broader range of investments you then have access to. Your offshore investment options through an onshore broker are limited to those companies willing to go through all the SEC hoops to get listed on a U.S. market. Outside the States, you have tens of thousands more mutual fund and stock options.

In the States these couple of weeks over the holidays, I’ve met with longtime friends and colleagues who’ve asked the question they always ask:

I’ve been practicing and pursuing an aggressive and ambitious agenda of diversification for more than 20 years, and I’m more bullish on the upsides of this strategy today than I’ve ever been.

Note, though, that mine is not an international diversification strategy but a global one.

All these years I’ve been living and investing overseas, I haven’t been escaping or running from the United States… or any other country. I’ve been seeking out and acting on opportunities elsewhere… everywhere.

My point is that diversification doesn’t have to be (and I’d say should not be) an all-or-nothing, either-or agenda. My constant objective is more and better options. Categorically excluding the United States from my living or investing plans would be to reduce my options.

That’s directly counter to my program.

I don’t imagine Kathleen and I ever living in the United States full time again, but, after we take off from Panama this June, when our son graduates high school in Panama City, I don’t imagine us ever living anywhere full time.

Our long-term plan is all about moving around as our interests, curiosities, and agendas inspire and as global markets and locales tempt.

All that to say, my wife has set her goals for 2017. Among them is a wish to own a plantation house in Charlottesville, Virginia.

If you know of one for sale… don’t tell my wife.

Lief Simon

“Lief, thank you for all the valuable info you provide us.

“I got my pensionado residency card in 2013 and spent three months in Panama City. I have not been able to return since due to my husband’s serious illnesses. I project to visit soon. How should I present myself to the immigration and customs people? Tourist or resident? For now, I am a resident of Canada where we pay our taxes and do not know when we will be able to make the move.

“Thank you for your help as we certainly do not want any complications.”

V.B.

Technically, you have to be in Panama at least once every two years to maintain your residency status. Depending on the date of your last departure, you could have what you’re hoping to avoid—that is, complications.

I’d say enter the country using your residency card/cédula but check with your attorney to be sure.

Good luck.

Ask Lief Anything.