The Hemispheres HIRE ACT Update and asset protection conference in Ambergris Caye, Belize has just come to a close.  There were numerous discussions on new ideas of how people can protect what they’ve worked so very hard for.  Everyone who gathered for the conference shared this one common goal and each of the speakers addressed the issue in different ways.

On the morning of Wednesday, August 3, 2011, our first speaker addressed a major issue on everyone’s mind, banking.  Many attendees are disturbed by the possibility of the United States falling into another recession and bank failures. Peter Zipper, President of Caye International Bank, Ltd. in Belize, addressed this issue by talking about the benefits of offshore banking and having multiple baskets for your nest eggs.

Belize ranks as one of the safest offshore banking countries because of its strict liquidity requirement.  The requirement is the highest in the world at 24%.  Zipper explained, “That’s a quarter of every dollar in a Belizean bank that has to be liquid reserves.”  As the highest reserve requirement in the world, this regulation offers superb protection from bank failures.

Another topic Zipper addressed was the bank secrecy law enforced in Belize. “It’s mostly Americans who blab about their money,” he said, receiving laughs from the audience.  But seriously, he noted, your account information in Belize is confidential between you and your banker.  It was a European idea to keep bank secrecy, and because Belize was a colony of Britain until about 30 years ago, it has kept this tradition as well.

The government of Belize doesn’t get involved in banking as the United States government does.  This is helpful, because no one is going to try to tax you based on how much money you have.  Because of this, Belize has not only become a tax haven for the wealthy, it has become a financial service center for anyone looking to do business in the region, facilitating transactions for property purchases and merchant accounts.

Our next speaker, Wayne Kurtz, President and CEO of Karlsberg International Insurance, presented a new spin to an old idea to the group.  His topic is the about how attendees can utilize the last, best legal tax shelter, which is buying life insurance outside the U.S.  The advantage offshore is flexibility and the ability to place assets you already own into the policy as premium.  This is a huge advantage.  In the United States, your insurance company selects a few mutual funds that you can pick from. If you buy insurance offshore, however, the same rule doesn’t apply.  “The big difference is that the flexibility of investment options is limitless,” Kurtz explained.  “You can use assets you already have.”

Kurtz also addressed the issue of taxes on the assets of the policy and tax-free nature of the death benefit.  This can be further enhanced by the use of a trust.   The benefit of having offshore insurance is that you won’t be taxed on your asset or the growth while it’s in the hands of the offshore insurance company.  The gains stay inside the policy.  Not only is it cheaper in that aspect, but Kurtz added that “the acquisition costs are generally lower than a domestic policy” as well.

Next, Maurice Glazer, Forensic Tax Accountant and CEO of Glazer and Associates, talked about the importance of proactive income and estate tax planning.  He began by mentioning that the biggest costs and hindrances to accumulating net worth are taxes and penalties.  He said that you should be prepared for problems that may arise in the future, and be ready to provide solutions.  He also made the point that it‘s important to keep up to date on changes.  “One of the things the government is doing is they’re trying to trace international assets,” Glazer said.  “Our philosophy is that you should not pay a penny more than you legally, morally and ethically owe.”  You have to do some lifestyle planning. 

Glazer provided his audience with some solid advice on how to do this.  “We’ve got to start with what we’ve got and protect our assets.”  One way to do this is to prepare your current budget and compare it to the estimated cost in the foreign country.  If it’s feasible, convert your home in the U.S. to your foreign home and your foreign home to your primary one.   His final words of advice for the audience, “You have to file the forms and they’re going to ask about foreign corporations and real estate.  Be compliant, because penalties are huge.”

Joel Nagel, founder and managing partner of the international law firm of Nagel & Associates, LLC, extended the talk about asset protection.  Joel began by saying, “If you want to think of a sports analogy, asset protection is the defense.”  He wrapped up with the Story of Two Kings, a powerful example of two men who followed very divergent asset protection paths.  The difference to their heirs was 90%.  Look for the complete story in an upcoming issue of Hemispheres. 

Mr. Nagel also discussed the serious nature of the HIRE Act.  He informed the audience about the new regulations, to be in effect in 2013 and 2014.  This act states that for every $100,000.00 sent out of the U.S. to a foreign bank, the U.S. government can withhold 30%.  Individuals will have to claim it back on their tax return, but in fact the proceeds become an interest-free loan to the government.  The law has also made the banks liable for any amount not withheld, if owed in taxes on the money transferred.  Banks will naturally err on the side of caution and withhold funds from international transfers.  This is important because, as Nagel says, “The biggest unintended consequence of this is the value of the dollar is going to deteriorate significantly.”

The best form of asset protection, he said, is to use different, more reliable, currencies.  “If all of your assets are in U.S. dollars, and the dollar becomes worthless, no matter how well diversified your assets, you’re still at a loss.”  You can have your money transferred to Swiss francs, for example, in order to better protect your money.  The foreign banks can keep your money private, but not if you keep it in U.S. dollars.

The next morning, Thursday, August 4th, Zafar Khan, CEO and co-founder of RPost, started the day with talking about his company's registered email and related services.  RPost is a technical monopoly created for legal and sensitive electronic communications.  Khan described it as “a new way to have business communications that is reliable.”

He mentioned the annoyances of your everyday emails, such as failure to send or bounce back when the subject matter is of high importance.  Those annoyances become significant on legally relevant correspondence.  There’s been a proven demand for this service, Khan said, as it is “more than the regular email product, it’s high value outbound messaging.”  Everyone is starting to pick up on this new technology, from the U.S. government to some of the largest law firms and insurance companies.

Mike Cobb, President and CEO of the ECI Development group, took the stage next to talk about real estate trends in Latin America.  He referenced studies by Zogby and TD Waterhouse showing that more and more people were gaining an interest in living in countries like Belize, Nicaragua and Panama.  In fact, over 5,000,000 US citizens already live outside the US, 10% of them retirees.  While the last four years have been tough in the real estate market, Cobb credits a conservative board and management style for the success of ECI. “We have survived the four to five worst years in real estate since the Great Depression because we don’t have mortgages on the properties we own.” 

Cobb talked about community living, and how more and more people want to work on building a community in Latin America where they have more privacy and freedom with their money.  He went on to describe what kind of community living people are looking for.  The Del Webb model is an example of what ECI is striving for.  “There’s only one community following the Del Webb model in Latin America, delivering community and geographic choice:  ECI.”  As real estate consumers come to the region to play or retire, ECI will be in the best position to serve them and their immediate, mid-term, and long-term needs.

Kelly German, Co-Director of Tourism in Belize for ECI, spoke next about the kind of lifestyle Belize has to offer.  Belize is different from other Latin American countries for many reasons.  For starters, the official language is English.  This makes it easier for people from the United States to relocate without having to learn another language.  It’s also a place of “extraordinary wildlife,” in the words of German.  It is home to several kinds of ecosystems and animals that you won’t see anywhere else.  It’s also home of the Blue Hole, one of three atolls in the country.  German told us, “there are only four atolls in the northern hemisphere, and three of them are here in Belize.”  This makes sense; the country’s slogan is, “Nature’s best kept secret.”

Aside from the wildlife the country has to offer, it also has a very small population.  This makes for a very down-to-earth feel and friendly, welcoming people.  German gave an example saying, “I love that manners still matter, I haven’t seen this person before and he/she’s saying goodnight to me.”  You’ll find this sense of community along with freshly grown produce and green grocers, making it a very attractive place to live.

Ann Kuffner, Vice President of sales for Grand Baymen and George Skidmore, Managing Director of Realty Executives International, took over from there to talk about the development coming soon to San Pedro.  “People often compare us to Key West 30 to 40 years ago,” Kuffner said about Ambergris Caye, Belize. George Skidmore described the Baymen Garden Condominiums, “It really has a garden feel to it, lots of birds and lots of plants.  The pools, clubhouse and tennis courts are already built and in use. Owners in the first building will have occupancy early next year and they have the option of living in their condo or renting it out.”   Baymen Gardens offers affordable residential living on Ambergris Caye, one of Islands Magazine's “Top 10 Islands to Retire On.”

Trevor Bradley, Marketing and Corporate Affairs Officer for Georgetown Trust, spoke next, and was our last speaker of the day.  One of the biggest things to affect business at Georgetown Trust has become retirement in Belize. The country was nominated as having one of the three best retirement programs.  Bradley said it was because, “You will not find any as easily workable and flexible as this one.”

Applicants only have to be 45 years old or older, non-Belizean, and show they have an income of $2,000 or more a month to qualify for a retired person.  “We have a wide range of services,” Bradley said, “including mutual funds and the handling of the buying and selling of gold coins.”

The Round Table Wrap Up Session was lively, as the attendees expressed pleasure with the conference, especially the small size allowing attendees to share quality one-on-one time with the experts.  One attendee, who had attended an earlier conference this year, stated that he has done very well with just one of the suggestions at the previous conference.  He had purchased Swiss Francs and had made over 30% in just a few months.  The objective of the round table is always to focus on the subjects attendees had come to learn, and the things they feel they will implement when they get home.  They agreed that, more than anything, this conference made them see the importance of reviewing their own portfolios and returning home to make one or two decisions for implementing new ideas learned at the event. 

What attendees had to say:

“A very informative conference.  I learned a great deal and I had a lot of fun.”
-Tim V

“We had personal attention from Trevor and he took two hours in his office to explain all the structures available in Belize.  That was my favorite part.”
-Paul A.

“I had three objectives when I came here, to gain information about asset protection, a beautiful vacation getaway, and a just-in-case place.  This conference answered all of my questions.”
-Hank T.

“Thoroughly enjoyed it, the integrity, honesty and sincerity was evident by the presenters.  Glad we came.”
-Vince and Sharon C.

“We expected a well run, dynamic conference, but the friendships formed among the attendees is a priceless bonus.”
-Dave and Deb F.

Editor's Note:  If you'd like to be one of the insiders at the next Hemispheres conference on international banking, asset protection, tax and investment strategies and the HIRE Act, contact us now for information and registration.