February 11, 2011
I’m spending a long weekend in the beautiful city of Temuco, located in Araucania, Chile’s southern lakes and volcanoes region. The further south you go in this country, the more the climate and geography changes from desert and semi-arid to something that looks like New Zealand’s south island.
Temuco looks a bit like Washington state or British Colombia– mountains, forests, and lush greens. I’m researching some real estate deals here before hopping on a plane for Panama next week for our first-ever Sovereign Man offshore workshop.
I’ll tell you more about Temuco on Monday– first, this week’s questions:
To start us off, Jim asks, “Simon, I’m attending the workshop in Panama and I have gold (200 oz’s in total) I would like to store outside the US. I would really like to know if it is legal to carry gold into Panama, can you help?”
It’s perfectly legal to bring gold into Panama… however Panama considers gold coins to be merchandise. As such, gold coins need to be declared at Panamanian customs if the market value (not face value) is above $2,000. You may end up having to pay 7% tax.
Because of this, I think there are much better places to store gold outside of the United States– Switzerland, Austria, Hong Kong, and Dubai to name a few.
Next, Julian in Germany asks, “Simon, if I hire a local registered agent to open a corporate bank account on my behalf, will I have any certainty that such service provider will not keep any back door open to access my bank account?”
That’s a great question. Often, forming a corporation overseas requires relying on lawyers and registered agents to incorporate the entity and open a bank account. Among the important things to understand are the requirements for directors.
Directors have legal authority over a company and it bank accounts. Each jurisdiction has specific requirements for directors– how many are required, of what nationality, etc.
For example, Panama requires a board of at least three directors, each of whom must be a natural person (as opposed to a corporation). This means that if you intend to own a company by yourself, you will need to pay annual fees to at least two strangers (your lawyers) to act as nominee directors.
Furthermore, Panama maintains a public registry of all corporations, and the names of each director are listed. This makes both control and anonymity difficult in Panama.
Conversely, in other jurisdictions, only one director may be required, and that director can be a legal entity which you control.
This makes it much easier to maintain complete control over the company, its bank accounts, and your privacy. I’ll be discussing this more soon at the workshop next week, and in an upcoming edition of Sovereign Man: Confidential.
Next, in response to yesterday’s letter, reader Eric T. chides me– “Simon are you nuts? Belize is no longer a safe banking haven. They will do whatever the USA wants. They have no choice.”
Cute. To be honest, I don’t particularly care for Belize as a banking jurisdiction, but I’m willing to make an exception for Caye Bank. Why? Because I know the owners quite well– they are freedom-loving, libertarian-minded gringos who run a very conservative balance sheet.
Caye Bank is a reasonable place to establish a small account just to have a financial toehold outside of your home country, though it is by no means the -only- option… just one idea. Many options exist in better jurisdictions.
Last, Alexandra asks, “Simon, what do you make of this Egypt soap opera? Mubarak is such an arse… he’s in, he’s out, he’s in, he’s out….”
Ha. Well, as I have just received a flurry of emails and text messages from some friends in the area, I see that he seems to be unofficially ‘out’. We’ll see if it lasts.
I suggested early last month that this would be the year for Mubarak and other ageing autocrats to finally croak or get kicked out. I really admire Egyptians’ dedication vacating this thug from office… but at the end of the day, they are only going to trade one crook for another.
These protests are underpinned by the erroneous belief that government is capable of providing solutions, and if they can just get the ‘right’ government in place, things will start ginning.
This is the same attitude around the world– it’s all about getting the ‘right’ people into office, whether by ‘free and fair’ election, by protest, or by force.
What people just about always find out a few years later is that the new guy is just as bad as the old guy… and that the more things change, the more they stay the same.
There’s right and wrong in this world… and standing against Mubarak is clearly right. But we all have a finite about of time, energy, and financial means at our disposal, and directing those resources towards political change, while just, generates a very low return and comes at a steep opportunity cost.
I would argue that resources are better spent solving problems at the individual and community level, not trying to get one set of criminals to relinquish control to another set of criminals.
Have a great weekend, more soon.