International Living

FATCA, fluctuating exchange rates, and the Expatriation Game

"It’s like the old British Fox Hunt. Instead of hunting foxes, the world is now hunting U.S. persons. Your objective is to NOT be captured. The consensus is that, over the long term, the U.S. dollar will depreciate relative to other currencies. This means that it will be worth less relative to other currencies. As the U.S. dollar depreciates, fewer Canadian dollars are required to purchase (what don’t we say $2,000,000) U.S. dollars. This means that the faster the U.S. dollar depreciates, the faster U.S. citizens abroad will become 'covered expatriates'. Notice that you are NOT doing anything yourself. It’s just that the the U.S. dollar is depreciating." Continue reading →

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How to Lose Friends, Citizens and Influence

"Imagine this: You were born in California, moved to New York for education or work, fell in love, married and had children. Even though you have faithfully paid taxes in New York and haven't lived in California for 25 years, suppose California law required that you also file your taxes there because you were born there. Though you may never have held a bank account in California, you must report all of your financial holdings to the State of California. Are you a signatory on your spouse's account? Then you must declare his bank accounts too. Your children must file their taxes in both California and New York and report any bank accounts they or their spouses may have." Continue reading →

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Gibraltar tries to lure London hedge fund bosses with promise of low taxes

"Gibraltar is launching a campaign to persuade hedge funds to ditch their plush Mayfair offices for the low taxes of 'the Rock'. Last week hedge fund managers were invited to the peninsula where they were told income tax could be limited to £30,000 a year no matter how many millions they earned. Gibraltar also boasts no VAT and social security payments of just £120 per family a month. In the UK the top rate of income tax is 45%, VAT is 20% and national insurance is levied at 14% of weekly earnings above £797. Corporation tax on activities undertaken on the rock is levied at 10%, compared with 24% in the UK." Continue reading →

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Gibraltar tries to lure London hedge fund bosses with promise of low taxes

"Gibraltar is launching a campaign to persuade hedge funds to ditch their plush Mayfair offices for the low taxes of 'the Rock'. Last week hedge fund managers were invited to the peninsula where they were told income tax could be limited to £30,000 a year no matter how many millions they earned. Gibraltar also boasts no VAT and social security payments of just £120 per family a month. In the UK the top rate of income tax is 45%, VAT is 20% and national insurance is levied at 14% of weekly earnings above £797. Corporation tax on activities undertaken on the rock is levied at 10%, compared with 24% in the UK." Continue reading →

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If You Are A Baby Boomer, You Will Go Bankrupt—If You Stay In America

"If you could get an 87% discount on your health care, would you take it? Or would you deliberately stand pat, pay 100%—and go broke? The answer is obvious. So if you cannot afford health care in the United States—or realize that, in the not-too-distant future, you won’t be able to afford it—then the smart move if you are living on a fixed income (or will be soon) is to try to look for a place where health care costs are manageable. A place where you can receive your pension or Social Security check or annuity or whatever, and yet not be afraid that you are one medical emergency away from losing your house and all your money." Continue reading →

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Beauty Offshore: A Caribbean Passport For A Chinese Restaurateur

"When Zhang Lan decided last year to file for an IPO in Hong Kong for her restaurant group South Beauty, she reorganized her holdings under an entity in the Cayman Islands. However, she didn’t just move her company offshore. She did the same to herself, applying for fast-track citizenship in the Caribbean state of St. Kitts & Nevis (pop. 50,000) under an investment scheme. Three months later a passport was delivered to her office in Beijing. In June 2012 Zhang filed for a share offering in Hong Kong as the foreign principal of South Beauty Investment Co. Ltd., a Cayman-registered company that earns its revenues in mainland China." Continue reading →

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Will IRS Find Your Small Foreign Bank Account?

"FBAR penalties can be enormous, a civil penalty of $10,000 for each non-willful violation. If your violation is willful, the penalty is the greater of $100,000 or 50% of the amount in the account for each violation. Each year you didn’t file is a separate violation. Criminal penalties are even more frightening, including a fine of $250,000 and 5 years of imprisonment. If the FBAR violation occurs while violating another law (such as tax law, which it often will) the penalties are increased to $500,000 in fines and/or 10 years of imprisonment. Many violent felonies are punished less harshly." Continue reading →

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9 foreign countries where you can use U.S. dollars

"There are many great pleasures of the globe-trotting life, but dealing with pesky Travelex lines is not one of them. Sick of exchange rates, transaction fees, and coming home with pockets filled with useless coins? Here are foreign destinations where you can pay with U.S. dollars, from the sunny and subtropical to the still-undiscovered." Continue reading →

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Internationalizing in Chile

"In Chile, there are incredible opportunities for those in the know. Opportunities for a guy like me, and maybe for you if you're really serious about planting a flag in a South American country where things actually work – and work quite well. I've been living in Chile for about 6 months of the last two years, fulfilling my residency requirements. So, while I'm not an expert in all things Chile, my intent is to share some up-front impressions and on-the-ground experiences in the hope that this information will be helpful should you decide to plant one of your flags in what I believe is a wonderful country. So, with that in mind, let's get started." Continue reading →

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Taxation of Americans Abroad versus the 14th Amendment

"The 'citizenship penalty' deserves consideration. Both US citizens abroad and non-resident aliens are non-residents of the U.S. The fact that the U.S. citizen pays higher taxes, because of U.S. citizenship, is arguably a violation of the 'equal protection' clause of the 14th amendment. Furthermore, the U.S. Supreme Court has ruled that 'citizenship classifications' are 'suspect classifications' and that they can be upheld only if the government can demonstrate a compelling state interest. Why should US citizens abroad pay a penalty because of their citizenship?" Continue reading →

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