Contrary to popular belief, you don't have to have bags of cash to open an offshore bank account. Even if you invest a few thousand dollars in a non-U.S. bank, you can still avail of several key benefits of offshore banking. Benefits like...
First, let's set the scene: Common legal grounds enabling someone to acquire a second passport include marriage to a foreign citizen or birth in a foreign nation. In some countries like Ireland and Greece blood ancestry is a basis. Then there's formal naturalization, meaning you apply and qualify for citizenship status.
There are many countries around the world that offer you the right to residence without having to be physically there. The biggest benefit of having residence in another country is the ability to avail of offshore and financial protection strategies that would otherwise be unavailable to you as an America citizen.
One of my favorite scam stories is of the German lady living in Paraguay. Claudia Bettina Muller was arrested last year for printing fake passports in her basement. Police found printing and engraving machines, along with boxes of blank passports and counterfeit government forms. But before I had ever heard of Claudia Bettina Muller or the Paraguayan police caught up with her, I had heard of this scam. I had come across a speaker at an event in Nevada who claimed he could get anyone in the attentive audience a Paraguayan passport in as little as a month. This was possible he maintained, because he had high-level government contacts. The cost was only $45,000. (That's half of what any of the second citizenship programs I work with charge.) Right then, as he spoke, I knew it was a scam.
Why take your assets offshore with an international structure? Simple. It can make your assets virtually invulnerable to civil judgments. It can also protect you from risks such as civil forfeiture, exchange controls, repressive legislation, or political instability. It's more difficult for creditors to collect against international assets. No country automatically enforces U.S. civil judgments. Many countries don't enforce them at all. If you live in the States, a U.S. court can order you to repatriate your international assets. But if you've set up your structure properly, you won't have the power to bring the funds back. And that's a fantastic incentive for a creditor to settle the lawsuit.
In 1986, I walked into the main Credit Suisse branch in Chicago and told the doorman I wanted to open a Swiss bank account. I was led to a private office overlooking the Chicago skyline and was asked for my minimum deposit. Being just 31 at the time, I played it conservative and started with just $2,000 (about $4,300 in today's dollars). I was asked to fill out a one-page form and provide a copy of my driver's license. I gave him a check and away I went. It took all of 20 minutes. In 1986, "offshore" was still exotic. It was something regular people didn't really do. How things have changed in 29 years.
Furniture to fill their new home...shop and car repair tools...TVs...scuba diving gear...a brand-new computer...decorative tiles...and "too many clothes" for the warm, tropical climate and their relaxed lifestyle. When Barry Munson, 60, and Dena Carey, 58, joined Belize's Qualified Retired Persons program five years ago, they brought a shipping container full of household goods and possessions.
My wife, Suzan, and I have lived abroad for almost 14 years, and we've had several foreign bank accounts. I wasn't allowed to write checks on any of them. Not that foreign banks don't allow check writing—they have all the same services U.S. banks do. But the banks we dealt with in Latin America all seem to be much more serious about signatures than our banks in the U.S.
Is it un-American to go offshore? In the United States, government officials and the U.S. Internal Revenue Service have for years done their best to convince people that obtaining a second passport is somehow crooked, even unpatriotic. The media persists with this steady drumbeat of negativity, even though the U.S. Supreme Court has repeatedly upheld the legal and constitutional right of U.S. citizens to hold dual or even multiple citizenships. Indeed, a second passport—a second citizenship—is one of the most important tools in any sovereign person's personal and financial toolkit.
William Francis "Willie" Sutton Jr. was a prolific American bank robber. During his 40-year criminal career he stole an estimated $2 million, and spent more than half of his adult life in prison, escaping three times. In response to a question about why he robbed banks, he famously replied: "Because that's where the money is!" Willie would find it odd that these days it is more likely that your own government will be the robber that grabs your bank account.