IL Magazine: Discover the Greatest Retirement Town +6 More SUBSCRIBE NOW AND SAVE 35% about subscribing to International Living Magazine The best beaches in Mexico are just 70 minutes down the coast from Cancun. Some are still deserted, dotted only with coconut palm trees and curious iguanas. Seabirds duck and dive overhead. It's a place of utter beauty and tranquility—azure blue water and total silence except for the roar of the surf. But it's not just about white-sand beaches here.
As a wise man once said, the journey of a thousand miles begins with the first few steps, and that's particularly true when it comes to making the move overseas. Those first steps are all about learning: learning what you want out of your move, learning what you really need to do to get there, learning what your courses of action should be, and learning where the edges of error lay.
I remember walking into Credit Suisse in downtown Chicago back in 1986 to open my first international account. It was as simple as filling in a one-page form, showing my driver’s license, and giving my opening deposit.
Until about 100 years ago, you didn’t need a passport for international travel. If you were traveling for some official purpose, or needed a way to identify yourself, you often had the option of carrying one. But you didn’t need permission from anyone to cross international borders. For better or worse, that’s not how things are today. Your passport doesn't belong to you. It belongs to whatever government issues you a passport and it can be taken away, for any reason.
An international bank account is always a good idea, particularly if you live, work, invest, or own property abroad. It allows you to control your money wherever you are on the globe, and it is your key to international investment opportunities. Even if you put a few thousand dollars in a non-U.S. bank, you still have the opportunity to take advantage of several key benefits of offshore banking.
If you’ve been keeping up with the stories about the Panama Papers in the mainstream media recently, you’d be forgiven for equating the word “offshore” with tax evasion, money laundering, and other criminal behavior. But there’s one small detail the media isn’t disclosing: The vast majority of the individuals whose confidential financial data was stolen weren’t doing anything illegal. According to the International Consortium of Investigative Journalists (ICIJ), which coordinated the review of the documents, more than 320,000 offshore entities appear in the leak.
Despite all the rhetoric out of Washington these days, you can bet we will see tax hikes this year. They might not be overt. Instead, we could see stealth taxes go up first…parking fees, garbage collection, vehicle registrations and the like.
Genevieve from Atlanta married a prince from Monaco. She moved all her belongings to her new home to live there with him. As a U.S. citizen abroad, she files her annual tax return with a status of Married Filing Separate. All assets are in her husband’s name and nothing is titled jointly.
FATCA, officially known as the Foreign Account Tax Compliance Act, is probably the worst law that most Americans don’t know about…especially if you’re a U.S. citizen thinking of investing outside the U.S. It basically requires you to tell the U.S. government a yearly breakdown of all financial accounts you hold outside the country—from bank accounts to companies to rent-producing real estate.
Not that long ago, you could buy a CD in a U.S. bank and get a decent rate of return…4% or 5% annually was typical. Sure, you wouldn’t get rich this way. But it was a safe and affordable way to build a nest egg. Today of course, times are very different. For nearly a decade, the Federal Reserve has kept interest rates at zero. And instead of paying 4% to 5% annually on CDs, now you’re lucky to get 1%.