Our News Bulletin On-Line:  Topics Include Banking Investments Interest Rates Small Business Free Zones - Taxes Incorporation Services Mutual Funds Offshore Life insurance Annuity Retirement Products  - Panama Dominican Republic Belize Bahamas Chile Argentina Ecuador Tax Havens

news headlines money market bank
                  interest

 Offshore Incorporation Services   |   Offshore Information & News Articles   |   Offshore Banking Services
.

Send an Email Via Reply Form 

offshore incorporations news

Write an Email Message Direct 

.
<
 
Return to Ascot Advisory Main Directory Page from Here  >
.

<  GO TO MAIN NEWSLETTER DIRECTORY PAGE FOR BACK ISSUES >
..

 ... ...


NewsLetter Update Bulletin On-Line.........  
In The News, Editorials, and Readers Write In (with our answers to Questions)

.
APRIL 2005
.
PANAMA TAXATION FOR RESIDENTS UPDATE: 
.
As we mentioned before, there has been much discussion and even confusion regarding these new taxation measures put into place by the Panamanian Government recently in terms of new taxation measures for residents.  A reader has written in to give us his opinion on the matter and the following is what he has to say about it:  In addition, the Panamanian Government has finally come out publicly to clarify once and for all, what will or not be taxable under this new legislation (see both below)
.
The Following Written by a Reader:
.
Without having exact paragraphs to point to currently, here is the breakdown.  Foreign sourced income is non-taxable (territoriality upheld, and there is a specific statement of such) except for employment income for diplomats abroad and those who live in Panama most of the time - This is a change.  There is a time test to determine who lives in Panama and works abroad.  Investment, interest income exempt and local bank interest is exempt.  The nasty gray area is pensions.  Most people are comfortable foreign pensions will not be taxed.  That is the word from several government people.  However the wording is such that they could be.  It is very cloudy and the writing is poor.  Pensions will not be taxed, but if that were my source of income I would be nervous.  If the pension comes from a life of work that was entirely abroad, it should be fine.  If they wanted to tax them, the law is probably already there.  I find this a poor way to create law, but that is what they did.  This is my opinion but also fits in with general consensus.
.
From The Panamanian Government:
.
http://www.mef.gob.pa/comunicados/2005-comunicados-ingles-
National%20and%20foreign-07-4-2005.asp

.
Government of Panama National and foreign retiree pensions continue to be income tax free:  Since the enactment of Public Law 6 of 2005 (Whereby a Fiscal Equity is Implemented) there have been some publications, specially on the internet, that in a vicious and distorted way have been spreading misinformation regarding the effects of Law 6. This information could affect negatively our national economy and the legal security environment for foreign investors in the Republic of Panama. Hence, the Economy and Finance Ministry clarifies the subject as follows:
.
FIRST: The pensions and/or retirement benefits that foreign residents of Panama receive from abroad, DO NOT PAY Income Tax in our country, neither are obliged to declare such income.
.
SECOND: Law 9 of 1987, "Whereby exemptions are granted to Retirees, Pensioners and persons retired from active live", is still in force.
.
THIRD: The interests generated by savings accounts (i.e. Time Deposits, Regular Savings Accounts) DO NOT PAY Income Tax in Panama.
.
FOURTH: The Republic of Panama only taxes income that is generated within the territory of the Republic of Panama. Therefore, foreign source income is not taxable in Panama.
.
We invite those who have inquiries regarding the effects of Law 6 of 2005, to contact with the General Department of Revenue of the Economy and Finance Ministry (507) 207-7753; Fax (507) 227-3852, Email: dgireclamos@mef.gob.pa,
Website: http://www.dgi.gob.pa
.
EDITORS NOTE:  It is about time that the Panamanian Government has clarified this issue, and we are very pleased to note that they have done so.  However, the above statement or comment has been made by the Finance Ministry publicly (by the government) in response to all the commentary and banter found on various websites and Internet news forums.  In fact, the exact quote from above claims that the various message boards and news forums have been disseminating information in a distorted and vicious way.
.
While I have not read or seen all of these chat boards or forums (in which case I could not say if in fact there was anything vicious or misleading), I do think the better term that can be used is Economic Democracy at work, or perhaps even Civic Activism at work.  No democratic government or government official needs to be over sensitive to public debate (and possibly public anger) over any law or regulation enacted which negatively effects the population, especially a very ambiguous one.  Everything in this regard is pure cause and effect.  Which is to say, expatriates are a unique breed of individuals and the kind of new residents you want to have, if you are a country.  They usually are well educated, self sufficient, economically stable, law abiding and independent.  They are often retirees or people that have owned small businesses before, who would consider starting a new business in the new country where they relocate.  They usually are NOT interested in taking jobs away from locals, and they usually want to nothing to do with any social welfare schemes (either to pay in or to take out).  In other words, rugged, self motivated go-getter do not give me anything for free but do not take my money away either salt of the earth kind of people.  However, tick them off, raise their taxes, make life difficult - and they WILL leave.  Be nice to them, make your country an attractive place for them to relocate to (tax wise and other wise) and they will invest, buy homes, put money into the local banks and generally bring new skills (and new jobs via the businesses they create) possibly not available before.  It is that simple.  Countries are in competition with each other for business investment and jobs, this is abundantly clear and a sore point at the moment with so many US businesses relocating elsewhere.  However, countries are also in competition with each other for well-educated, responsible new immigrants or citizens as well.  Not the poor and uneducated, but rather people with the economic resources and capability to truly contribute in a meaningful way.  Does this then sound like a slight or mean spirited comment directed to poor and uneducated immigrants?  It is not meant to be, but rather to point out the difference.  As we have stated before, the so-called wealthy industrialized nations are getting the poor and uneducated as the bulk of new immigrants, who in turn often take the jobs that the exiting educated middle class do not want to do (for minimum wage, if not less).  However, what is happening at the same time is, the educated wealthy middle class are leaving the US, Canada and Europe - and are heading for places like Panama, Ecuador, Dominican Republic, etc., etc.  One might say a trading places sort of scenario, but with a major difference.  Meaning the financial capacity and education found with these wealthier middle class immigrants will have a much different impact on the economies where they are going, in contrast to the kinds of people that you might say are taking their place.  Factor this out over a 10 or 15-year period and the net effect is quite profound (and why we believe the backlash will be increased restrictions on money or asset transfers, taxation and maybe even other kinds of restrictions in terms of the middle class moving out of these wealthier industrialized nations, as the impact starts to take full economic effect).  Stated or explained another way, you have a case of middle class people leaving the US (as just one example) with perhaps 100 or 200 thousand in cash to start a new life elsewhere, and the people taking their place might be Mexicans with $10 in their pocket who will take a minimum wage job.              
.
However, all of this leads up to the idea that there is a very new and interesting paradigm at work at the moment in general with regards to taxation and general lifestyle issues (both in the so-called developed or industrialized nations and in the emerging markets that might be getting the new expatriates as new residents).  Namely the concept that many middle class people are willing to vote with their feet (and their money).  This is a brand new concept, as many politicians are under the impression that the local citizens or residents will take whatever comes down the line because they have no where else to go - or that they would never think of leaving to go live in another country.  How wrong they are.  For example, we have a few Danish clients that love Denmark, but not at a taxation rate (or we can say confiscation rate) of 70 percent in terms of income tax.  So, while they were born in Denmark, have friends and family in Denmark, they are not about to continue to turn over 70 percent of their income to the government for the so-called privilege of living there (even though they might still love their homeland).  At 25 percent or maybe even 40 percent, perhaps it is worth it to some.  At 70 percent - forget it.  And so it goes with many of the other countries in both Europe and North America as well.  In addition, this general idea also applies to the country that a person is planning on living in as well.  The Dominican Republic, Panama, Thailand, Ecuador, and so on are attractive because of lower living costs, lower housing costs, lower labor costs, lower taxation rates, better climate, etc, etc.  However, if any government thinks they have the cats meow in terms of infrastructure, climate or lifestyle - they are sorely mistaken.  Just as in the private market place, there are price pressure points.  Meaning, you may prefer Coca-Cola over Pepsi assuming they are priced about the same, but if Coca-Cola costs twice or three times as much as Pepsi, maybe it is time to switch even though the other is probably more to your liking - but not likeable enough to pay three times the cost of the other.  So it goes with government, because government is really in the public or civil services business (and why they call government employees civil servants, even though they often do not do too much serving at all).  In this regard, hopefully governments will start to realize very seriously that citizens are it customers - and that customers can change service providers (change countries where they are living and even change citizenship) fairly easily these days.  So, Denmark may be your first choice as a place to reside, but then again, maybe Panama or Ecuador or The Dominican Republic is a better all around deal considering the cost.  Because that is what taxes are - payment for government services.  Government then is a service provider, just like the cable company or the telephone company, or anything else you pay for in life.  Are you getting your monies worth?
.
Sure, the downside or argument might be (in regards to the new country) some of the roads are not exactly perfect, maybe it is missing some things from back home, but then again, you are not working 8, 9, 10 months out of the year for the government in terms of income tax either.   This is the real burning issue for the politicians - competition.  But is it not true that competition is good and monopoly bad?  Competition forces better service at lower rates, and if not, you loose customers to the other guy.  The new reality today is that many, many middle class people are starting to realize that this applies to government as well and where they might choose to live as a function of that.  Imagine that!  Another government that wants you bad enough as a new citizen or resident to offer you lower or zero taxes, lower cost of living, little if any red tape to start a small business and a better lifestyle.  What a novel idea.
.
.
DOMINICAN REPUBLIC INTEREST RATES:
.
Bank Account interest rates both for US Dollar and Peso deposits have come down in the Dominican Republic - way down.  What is going on and why is this taking place?  Is the Dominican Republic still a worthwhile banking option?  Here are the answers.
.
As we mentioned before, the current government has implemented a number of economic policies to starve off inflation, stabilize and grow the economy while at the same time trying to pay off all of this debt incurred under the previous administration.  To a large extent the current Dominican Government has made major inroads towards these goals.  The Dominican Central Bank has reported the current rate of inflation is way down from last year and they also just announced (April 2005) that the economy is growing at a rate of 4 percent in the first quarter.  However, one concern of the current administration is the over liquidity of the banks.  Meaning, the banking sector has too much cash that is not getting filtered into the economy.  As a result, in the recent past, why would a businessman or individual consumer invest or purchase real estate when they were better off keeping the money in the bank at 24 percent interest tax-free?  Using a consumer and real estate as one illustration, let us say you had 4 Million Pesos in cash in the bank (about US$135,000) earning 24 percent interest.  That would give you about RD$80,000 Pesos per MONTH in tax-free income.  Let us also say you had the choice a buying a brand new 3-bedroom super luxury apartment or penthouse in the capital with this money.  Let us also say that if you rented the same place, the monthly rent would be about RD$25,000 per month.  So, what do you do?  Take your money out of the bank and buy the apartment for cash (giving up your RD$80,000 in monthly interest) or keep your money in the bank and rent?  You would rent, because it would be a better deal to pay the RD$25,000 per month rent and keep the remaining RD$55,000 (out of the 80,000) in your pocket.  And so in goes with businessmen as well.  Do you keep your money in the bank earning 24 percent or do you invest it and expand your business.  If you elected to invest it to expand your business, obviously you would need to see a return far greater than 24 percent to make it worth your while, and the bother.  So, as a result, the banks have been sitting with a ton of cash and account holders were neither spending it nor taking out any bank loans either.
.
The net result has been a push by the Dominican Central Bank to push interest rates down to encourage capital spending, investment and even real estate purchases.  While not a favorable situation for investors living off of bank account interest, it is a very sensible idea for the overall economy.
.
This leads us to the question - Is the Dominican Republic still a good place to bank in terms of interest.  Well, one side of the coin can be that if you have the choice of earning say 2 percent on a US Dollar bank account in the Dominican Republic Tax-Free, and the choice of earning the same interest rate elsewhere whereby there might be a local tax on the earnings, then in reality you are earning a higher AFTER tax return in the DR.  But this leads us to a more broad based discussion about being able to take advantage of higher returns worldwide.  Meaning, you are truly a sovereign individual and a citizen of the world.  You can live where you want, you can choose to become a citizen of whatever country that you want and you can invest where you want.  While many things remain uncertain in our lives, one thing is for sure.  Interest rates, stock markets and the economies of many countries go up and they go down in cycles.  In addition, it is also true that politicians constantly tinker with new laws and new economic policies as well to respond to whatever situation.  As a result, there are times when this is of benefit to you and times when moving your money (and maybe even yourself) elsewhere is a good idea.
.
While it is true that the world economy is somewhat connected in many ways, it is also true that when the US stock markets are going down, the markets in Europe, Hong Kong or Australia might be going up.  The same thing is true with bank interest rates as well.  So, the concept is that you can be able to take advantage of whatever country offers the best return worldwide for yourself.  This is what the well-known investor George Soros does and you can do the same, albeit on a much smaller scale.  So, why not have an account in the Dominican Republic, Hong Kong, Panama, Austria, Ireland, Australia and wherever else?  When interest rates are high in one and low in the other, you move it to get the best rate.  Obviously, as we said, these things move in cycles and you might find out two years later, the interest rates are now higher in the previously low rate country and vice-versa where you have you deposits at the moment.  Of course, having some sort of banking or investment relationship in each one of these countries is the key to allow you to do this easily and quickly.  In this regard, you might choose to live in one country because of the best cost of living, housing, climate, etc. - but your money might be living in yet another country (even though only temporarily) because interest rates are higher there.  Why not?
.
Keep in mind though that this also ties in to bigger picture of taxation and politics as well.  Meaning, US citizens specially will find it very difficult to invest or bank abroad these days.  Not because it is illegal in any way, shape or form - but rather because the US Government has put a tremendous amount of pressure on many banking and investment institutions for reporting and other issues.  As a result, many US citizens will be perplexed to understand why a bank in Switzerland or some place else will not send them an application form.  However, the same case with a Dominican or Panamanian or some other nationality will find a very different (and probably welcoming) reception.  Also, it is very interesting to note that MOST nations do not tax their citizens on income or earnings from outside the country and or allow their own citizens resident in another country (living in another country) to be excluded from tax liabilities in the home country.  Unfortunately, the US is not one of these shall we say, tax rational nations.
.
However, the latest development we have noticed with some institutions is that they put a disclaimer saying they will NOW not accept Dual Citizens who are also US citizens.  In other words, it would seem enough US citizens have pursued Dual Citizenship, which is perfectly legal for them to do so, and this has now popped up on the radar screen of the US tax authorities as one way they (US citizens) have gotten around the previous (and current) agenda of making it difficult for US citizens to invest abroad.  You got to love them.  Meaning, it is often enough the case that the US State Department does not know which former or current US citizens have dual citizenship (and a second passport) because this is not reported (why should it be by the new country of citizenship?).  However, it would seem that there is enough awareness in general that they are now pressuring banks and investment firms not to accept a foreign citizen that might also be a US citizen as well.  However, we believe that most financial institutions abroad, especially those that have no US ties or affiliates could care less. Which is to say, just as bad as the US Tax Authorities might be perturbed about all those US Dollar deposits abroad, anonymous and tax-free  - it is also true that many foreign nations want and need foreign investment or deposits and probably feel it is ridiculous for another foreign nation to even think of asking such a thing (that they refuse accounts owned by a particular nationality simply because of tax issues).
.
Regardless, we see these things as part of the aggressive focus we have talked about earlier, in terms of trying to stop US citizens from leaving (with their cash).  Which is why an action plan and ability to be able to make choices is so important today.  Meaning, the establishment of banking and investment options today before it becomes more difficult later on, the establishment of various entities such as a Trust or Foundation (if applicable for a client) and even dual citizenship as well.  Many, many countries (other than the US) do not tax its residents or citizens on foreign source investments or income.  In addition, bank account interest inside the country where you are residing may be tax-free (as is the case in the Dominican Republic, Panama and a few other jurisdictions also).  In addition, many high tax nations (such as the US) have incentives in place to allow foreigners to invest on a tax-free basis (which certainly are not reported back to any other foreign government in most cases), so in the end, in the case of the of the US especially - it is a scenario of the pot trying to call the kettle black.  They want foreigners to continue investing in the US (and have tax incentives in place accordingly) yet they do not want Americans to move their own money abroad (at least not without a way to confiscate a part of it).
.
Regardless, we have said that you are a sovereign individual with the right and freedom to both live and invest where you want.  However, this does not mean it will be simple or easy.  All of the industrialized nations that have very expensive welfare and government pension schemes in place are going broke.  As a result, they will continue to try and chase revenue to make up the shortfall, and possibly look to stop citizens from expatriating with their own legally and honestly earned assets - if they possibly can.  Its about the money, it always was and always will be.  You have it, they want it - it is that simple.  It may come to a point in the future that the only way to extricate yourself from such a situation is to not only become a resident of another more tax rational and tax friendly country, but perhaps renounce your previous citizenship as well.  For the moment, Canadians and Europeans have it a bit easier in that their governments will excuse their citizens resident in another country from the local tax system.  However, a real problem does indeed exist for US citizens, as the US government becomes increasingly aggressive and restrictive in this regard.  But, because of this, we do foresee the numbers of US citizens expatriating and possibly even renouncing US citizenship to increase dramatically.  Again, as we stated earlier, governments are nothing more than service providers, just like the cable company.  Is it worth it for you to stick with Cox Cable, offering 90 channels for $125 per month, or is Adelphia Cable a better deal with only 70 channels, but a monthly fee of US$45 - you decide. 
.
DOMINICAN REPUBLIC REAL ESTATE:
.
Gordon Green, an American real estate agent in Punta Cana - Playa Bavaro tells us he has an interesting situation for someone looking for a business in that area.  The listing is a 65 seating capacity restaurant - bar on the main street with a one bedroom apartment attached for the owner (or to rent out).  Apparently some German Women bought it a few months ago and could not make a go of it (but knowing nothing about the restaurant or bar business probably did not help matters), so they are selling.  However, this leads me to comment that this is a common problem for some foreigners in regards to these kinds of businesses.  Maybe it is not such a bright idea to own a restaurant or bar in an area with nothing but all-inclusive resorts (guests staying inside the resort sure as heck are not about to spend one dime on food when it comes included).  But, maybe there is some opportunity there for someone with imagination.  Perhaps the building could be converted to a bed and breakfast inn - appealing to tourists that would rather not stay at a large resort.  Perhaps the space can be converted to a specialty food store - delicatessen catering to the European expatriates living in the area with imported food products from back home they cannot buy anywhere else.  Perhaps some other kind of business would do well there offering activities to tourists not found anywhere else.  A small Dominican Cooking School offering a program of cooking lessons - a Make Your Own Surf Board business - Make Your Own Dominican Coconut Lamps.  Granted, these things are not to every persons liking, but the point is find or think of a business idea that is unique and one of a kind to the area.  But please, please, please do not open another beach bar restaurant in an area chock full of all-inclusive resorts.  It is a recipe for disaster (no pun intended).
.
Mr. Gordon Green
Island Realty Punta Cana
Direct US Tel. 281-380-3790
Punta Cana Office: 809-503-5098
Punat Cana Fax: 809-552-1635
Email:   ggreen337@yahoo.com
.
Note: Gordon Green is an American and native of Texas who commutes between Texas and the Dominican Republic at the moment.  His business partner is in the Punta Cana office full time, but Gordon invites any North Americans who might have any questions or inquires to contact him directly via his cell phone, which is functional both in the US and in the DR also (or email as well).         
.
.
READERS WRITE IN:
.
John - Your recent article about the new world wide income taxation enacted for Panama (January 2005) certainly upset my plans and hopes to live and invest there.  I already opened up a bank account in Panama City in preparation for such a move. Fortunately it was a small amount (to start) but I can change direction and go elsewhere.  Maybe I will have to revert back to the Dominican Republic solution on the hope that the country will be stable, but that is another discussion. (If it can still be reached with $200 a barrel fuel costs).  I saw the same scenario in Canada a few years ago when the Chinese and Taiwanese sold everything and moved out when worldwide income was placed in the tax code.  As you said:  Adios, Bocas Del Toro, Panama - Hello, Montevideo, Uruguay (or where ever else you might consider) without too much disruption.  Signed - Disappointed Pensionado
.
EDITORS REPLY:  Well, do not be too disappointed.  It would seem that some government folks a bit higher up the food chain got the message.  I do think Panama, The Dominican Republic, Uruguay and a large list of many other places make for some interesting choices in terms of relocation options.  However, as I also said, countries are certainly in competition with each other both for business investment (factories and jobs) and new well heeled economically solvent residents or citizens also. Take away the incentives, start giving people a reason not to come (or leave if they are already there), and you (as a country) are only shooting yourself in your own foot.  Expatriates especially are people that are very aware of what is going on, and who have the knowledge plus the resources to live where they want.  A government, any government, is nothing more than a service provider.  This is the new paradigm or way of thinking that many people are starting to realize.  In addition, it is important to know that you do have a voice, but that the voice you have is economic in nature.  This is also a new paradigm for many people as well.  Which is to say, forget about writing letters to your elected officials or promising to change your vote to the other party in the next election.  Just switch service providers - in other words, switch countries and take your money with you.  If enough people did just that, then and ONLY then - will you start to see some changes - And if there still are no changes?  Better off for you because you switched over to something better - legally and correctly of course. 
.
It is very interesting to note that this response came about from all the on-line discussion, news forums and so on.  Lightening fast dispersal of information in direct reaction to something viewed as negative - economically speaking for the residents and citizens of Panama.  True democracy and open discussion at its best - with possible negative financial consequence as the end result.  This is wrong?  This is vicious?  I think not.  The politicians are the vicious party when they attempt to take away or tax its residents or citizens unfairly.  Taxes are a necessity for the functioning of government, but how much is enough?  What about patriotism?  I love my country, but there is a limit.  I do not love it so much as to allow politicians to destroy me, or my family economically.  Which is to say, there is a line between love or patriotism and stupidity.  Why do foreigners move to Panama or the Dominican Republic or anywhere else for that matter?  Why do they put money into the local banks, invest, buy homes, etc.?  Do they do so because they are so in love with the local people and want to help them? Or do they move there and invest because it is worthwhile in some way for them to do so (lower taxes, lower cost of living, pleasant climate, etc.)?  Let us be brutally honest and realistic.  People are not relocating to Panama because they have some nice mountains and maybe even some nice people living there.  Ecuador has some nice mountains and nice people too, so does Costa Rica, so does the Dominican Republic, and so does Germany and Switzerland.  Are the mountains in Switzerland that much nicer than the mountains in Panama considering the Swiss Government may tax you at a rate of 60 percent, and the Panamanian Government not at all?  I do not know, only you can decide.
.
In any event, the summary is, just as the boy scouts say - always be prepared.  We have talked about banking and investing globally.  We have talked bout setting up your affairs in such a way that you have options or choices.  Getting another citizenship is just one part of that overall game plan.  Having banking relationships in Europe, Asia, South America, and so on yet another.  Keep your small bank account open in Panama, and maybe even relocate there, but be prepared.  Things may be great today, but maybe another socialist government will get in power ten years from now and they may want to open the tax box all over again.  Who knows?  None of us do, but set yourself up in such a way that you are able to have choices and options no matter what.  We all have choices and options.  You may decide to live in Panama because you want to, out of choice.  You may decide to live in Chile, Argentina, Thailand, or the US or Canada or anywhere else - out of choice.  You decide to become a resident or a citizen of any country - out of choice.  Like wise, you can decide to leave and move on as well, if the tax situation becomes unbearable, if the economy or society is not to your liking (crime rates, etc.).  You do have a way to vote (with your feet) and you do have options.  Do not let anyone convince you otherwise.  If your neighbors want to stay in Canada and turn over 70 percent of their income to the government, and they think it is worthwhile to do so, let them stay.  In fact, wish them well.  You have other options.  Hopefully the place you relocate to will remain very attractive and to your liking for a long time to come.  But if things change there, there is always someplace else to welcome you as well.  Governments need to be reminded of that, although politicians are often arrogant enough to think otherwise.  They think you exist to serve them, when in reality it is they that exist to serve you - and the greater good of their nation.
.
.
ANOTHER READER WRITES:
.
John:  I really can't tell you enough how fortunate I am to have found you (your services).  I have contacted you before and you were very helpful.  These newsletters do me a world of good as I am a 26 year old male from NJ and am balancing two lives (one here in NJ and trying to lay the groundwork for my mid 30's in DR).  My father found the DR about 15 years ago and since then I have gravitated towards living my life there (way before retirement age).  I have 2 questions for you.  One reason I still live in the US is because of the notion that I should work, work, work here and stockpile a nice sized savings account.  Then relocate to my home in DR, and live off interest.  Do you know of a shortcut (perhaps an enterprise in DR) that seems feasible?  Also in regards to extradition laws--- I was under the impression that at one time the DR would only extradite to the US for murder only.  Does that still apply? I have a clean criminal record.  But this question has been posed to me by friends numerous times - and I have always said that only murder is grounds for extradition.  Is this true?  Do you have any news about the IRS cracking down on off shore accounts and using of debit cards, also I have a question about IBC can I purchase a house or a car here in the states and not using my name and using my IBC name.
.
EDITORS REPLY:  Well, to answer the first question, I do not know of any particular shortcut other than to say there are quite a number of business opportunities to consider anywhere.  The Dominican Republic certainly has less red tape, lower taxes and less regulatory nonsense as you have in the US (I know of a client that was refused permission to open his bagel store in San Francisco because his public bathroom was painted the wrong shade of white, and the inspector said the next earliest appointment he had to come back was 45 days later to check on it again).  However, it is also true that business can be difficult anywhere and there is no easy ticket to business success in the Dominican Republic either (although you will get to keep a heck of a lot more in terms of what you earn).  There is no magic formula other than using some common sense.  I can only offer my own advice, which comes from experience, which is as follows.
.
You are a young and intelligent guy.  Intelligent because you are actually thinking about these things now and are trying to secure your own future accordingly.  Try to save as much cash as you can, try to cut your expenses to a minimum and be patient.  The problem with many young people in the US today is that they want it all - right now.  The society and culture has taught you that you MUST go out and buy or spend.  In other words, if you do not own your own home (in reality most people never own their own home in the US, the bank owns it and the occupants make payments to the bank for their entire lifetime), if you do not own the latest model car (which again they encourage you to do by going into debt with easy leases and so on) - you are made to believe that you are a failure (that you have not acquired the so-called American dream and that there must be something wrong with you).  Forget all of that baloney.
.
Having a financial base under you is one of the most important near term goals for yourself.  How?  Save your money.  Accumulate enough so you can buy a home building lot, a single-family home or apartment for cash in the Dominican Republic (if that is where you think you might be living).  Remember, a real estate purchase need NOT be reported under current US tax regulations.  It is not an account and it does not create a US tax liability for yourself either (only banking or investment accounts abroad need to be reported).  So, if you have the capacity to save anywhere from US$60,000 to about US$115,000 in cash - it is possible TODAY to buy a home or apartment for yourself in the Dominican Republic.  If you prefer, buy a nice building lot in a nice residential area for about US$20,000 on up (depending upon the size, etc.) and hold onto it with the intent to building your own home for CASH later on when you have some more money saved.  Apart from that, start building a cash nest egg for yourself so when you do decide to make the move, you will have a fully paid for home or apartment that YOU own free and clear PLUS enough cash to hopefully invest so you can cover your monthly living expenses from the interest.  Granted this was much easier to do at 24 percent tax-free, but even 10 or 15 percent tax-free makes the idea possible as well.
.
Remember that this is a long-term goal that might take you some time to accomplish, but have faith in yourself and be patient.  You are building equity and wealth for yourself whereas your friends are accumulating debt.  Five to Ten years from now you will have a fully paid for home (in the Dominican Republic) and the capacity to support yourself, or at least cover your basic monthly living expenses from your bank account interest.  What kind of life will your friends have ten years from now?  They will be broke.  They laugh at you now because you are not living off of credit cards and not getting yourself into debt.  You will be laughing later.  They will drive a car they do not own (with monthly lease payments they can barely afford to make), they will live in a home they do not own (and will barely be able to make the interest only mortgage payments) and they will have NO SAVINGS - NO MONEY.  What they will have is fear and ulcers, because at any moment if they loose their job  - the whole thing will come falling down like a house of cards.   Stay out of debt.  Debt is slavery, but most Americans today only know how to be enslaved because this is what they are taught and encouraged to do.
.
To answer your last two questions, I do not know why someone is so concerned about extradition unless that person is a criminal.  Most countries certainly cooperate with each other when it comes to major felony matters, such as murder or drugs or kidnapping and the Dominican Republic is no different.  The Dominican Government is not interested in harboring criminals nor are they interested in having criminals apply for residency.  They do not want problems, and you cannot blame them.  So, my advice is do not break the law where you are living at the moment, and certainly do not brake the law in your new country of residence either. With that said, I do think that many US citizens are a bit paranoid but that comes from that fact they often do not know what is true and untrue. As an example, most Americans do not know that Dual Citizenship is perfectly legal and recognized.  The only thing that the US State Department does say is that a US Dual Citizen must always use their US passport when entering and leaving US territory.  But this is just one example of rumors, myths and so on that people hold to be true when it comes to a number of these kinds of issues, including taxation matters as well.  So, read and educate yourself as much as possible.  What you think you know and what is in fact law or true may be very surprising.  The US likes to pride itself on saying it is a nation of laws (perhaps too many some might say, but that is another topic for another day).  If this is the case, then just make sure you know exactly what the law is and what your rights are.  Again, you may be very surprised in terms of what you learn as many people do not know the law and how to handle certain situations - legally speaking that is.
.
On the last question, I think we have touched upon this quite a bit already in general so I will not repeat here again.  However, I do think it safe to say, expect more aggressiveness, and not less.  Also, I have spoken with a few young men like yourself that have told me they see no future for themselves in the US long-term.  One guy who will be graduating this year from a University in New York with a degree in IT (information technology - computer sciences) told me there are no jobs.  He said, either all the jobs are going to India or where ever and what is left is very disheartening as far as a career is concerned.  Apart from that, he told me that he does not expect ever to be able to get any benefit from Social Security, etc. - yet he knows he and his friends will be paying through the nose in terms of taxes and contributions to support the bankrupt system for the baby boomers.  It is a no win situation, and why he, just like you, is trying to figure out a way he can stake his future someplace else.  And this is the catch 22 - or the cause and effect.  As more middle class people figure out that they can leave (and do so) the more aggressive I think the authorities will be to stop it, but with a focus on the economics (banking abroad, sending funds outside the country, etc.) because this is where the real concern and bottom line is.  Which is why I do think anyone with the capacity to do so should consider having assets safely tucked away while they still can.  Buying real estate is one very worthwhile idea, especially when that real estate is still inexpensive in comparison to US prices, and since this does not trigger any sort of US reporting or tax requirement, you are not violating the law by not reporting it (whereas in theory you are in the case of a bank account).  What is the worst that could happen?  You have property that is located in a growing or emerging market that should have at least some appreciation down the road, you own it for cash (always a good idea) and you have a place to live that is yours later on - if that is what you want to do.
.
ANOTHER AMERICAN READER SENT IN THE FOLLOWING:
.
TAXES: Accounts Receivable Tax, Building Permit Tax, Capital Gains Tax, CDL license Tax, Cigarette Tax, Corporate Income Tax, Court Fines (indirect taxes), Dog License Tax, Federal Income Tax, Federal Unemployment Tax (FUTA), Fishing License Tax, Food License Tax, Fuel permit tax, Gasoline Tax  (42 cents per gallon), Hunting License Tax, Inheritance Tax Interest expense (tax on the money), Inventory tax IRS Interest Charges (tax on top of tax), IRS Penalties (tax on top of tax), Liquor Tax, Local Income Tax, Luxury Taxes, Marriage License Tax, Medicare Tax, Property Tax, Real Estate Tax, Septic Permit Tax, Service Charge Taxes, Social Security Tax, Road Usage Taxes  (Truckers), Sales Taxes, Recreational Vehicle Tax, Road Toll Booth Taxes, School Tax, State Income Tax, State Unemployment Tax  (SUTA), Telephone federal excise tax, Telephone federal universal service fee tax, Telephone federal, state and local surcharge taxes, Telephone minimum usage surcharge tax, Telephone recurring and non-recurring charges tax, Telephone state and local tax, Telephone usage charge tax, Toll Bridge Taxes, Toll Tunnel Taxes, Traffic Fines  (indirect taxation), Trailer registration tax, Utility Taxes, Vehicle License Registration Tax, Vehicle Sales Tax, Watercraft registration Tax, Well Permit Tax, Workers Compensation Tax
.
READERS COMMENTS: Not one of these taxes existed 100 years ago and our nation (UNITED STATES) was the most prosperous in the world, had absolutely no national debt, had the largest middle class in the world and Mom stayed home to raise the kids.  Enough Yet?
.
EDITORS REPLY:  Is this a rhetorical question?
..
The information has been compiled and provided by John Schroder of Ascot Advisory Services.  Ascot Advisory assists clients with the formation of Panama Foundations and Offshore Company Formation, offshore banking introductions, Residency Services and other related services.  For more information:
.
Telephone 809-334-5387 or 809-756-1917 
Email: info@ascotadvisory.com