Here’s the most important thing to understand about the “offshore world”:
The rules can (and do) change fast. You can’t assume you understand something today (to do with establishing residency, obtaining citizenship, opening a bank account, etc.) because you researched it a month or two ago.
The new “Specific Countries” residency permit that Panama’s President Martinelli created via an executive decree back in May is a good example. The program was put together hastily. After the decree was issued, it was realized that the U.K. had been left off the list of qualifying countries. The U.K. is one of Panama’s biggest trading partners and an important foreign investor in this country. The oversight was corrected a month later, when a revised executive order was issued that included both the U.K. and South Korea. The updated country list now included (and includes today still) 24 nations.
The objective of the decree was to make it easier for foreigners to work in Panama. The country is experiencing a growing shortage of qualified labor. Martinelli wanted to do something to address the problem. Great. However, as it was written originally, the order he issued addressed only residency for citizens of the two-dozen countries on the list. It didn’t even reference what was in fact the point — work permits for the same folks!
Now that oversight too seems to have been resolved.
The original decree stated that you simply needed to prove that you were from one of the listed countries and that you had US$5,000 in the bank (any bank). Do that, and you’d be granted residency. Those very straightforward requirements have since been amended or perhaps clarified. Now it is stipulated that you must either own property in Panama (held in your own name; most people hold real estate in this country through a Panama corporation) or set up a corporation and obtain a business license.
Finally, most recently, it was explained to me yesterday by my attorney here in Panama, Rainelda Mata-Kelly, that the particulars of the program have been expanded or clarified further to provide for the holy grail: a work permit. To get one under this new program, all you need is an offer letter for employment.
Unfortunately, still, the particulars of how this works in practice haven’t been thought through, it seems. The most recent “clarifications” have created a catch-22. Panama’s department of labor won’t issue the work permit unless you have your residency approved under the new program…and Panama’s department of immigration won’t issue the residency permit unless you have your work permit.
Fortunately, the bureaucrats involved aren’t as deaf, dumb, blind, and slow as we civilians give them credit for. It appears at the moment (remember, this is all a very fast-moving target) that the department of labor will start the work permit process if you’ve filed your residency application. The residency application can then be finalized because your work permit is in process…and the work permit can then be approved when the residency permit is approved.
As I said to Rainelda yesterday after she’d walked me through all this, it seems like we’re still missing some dots in this process. She agreed, but she also thinks they’ll continue modifying things to make sure the program works the way it was intended…which is to make it easier for skilled labor to come to work in Panama to address the growing shortage.
For businesses that need skilled labor (like ours), these new rules are a huge deal. Until this new ruling, businesses were limited to hiring but one foreigner for every nine Panamanian employees. I can tell you from experience that this could be a serious limitation.
As Panama continues to refine the process for applying for and obtaining the new residency and work permits, I’ll remind you again that the rules for these kinds of things change regularly…and not only the rules to do with how the programs work. No one knows how long the new permits will be available. The program should remain in place at least throughout the rest of Martinelli’s presidential term, but likely the next president will revoke Martinelli’s executive order creating this opportunity.
Fortunately, though, this new residency permit gives you permanent residency immediately (unlike current investor residency options, which grant only temporary residency at first). This means you don’t have to renew your permit multiple times before becoming a permanent resident.
Therefore, even should the next president revoke the order (as he likely would), those who have obtained residency under this new program shouldn’t have any problem. Additionally, Panama has a history of grandfathering people already in the system.
If Panama is on your radar and you’re from one of the 24 countries on the list, this is the best opportunity and now is the best time you’re going to have to obtain easy and quick permanent residency in this country…even a work permit. Assume it will all go away in 2014.
P.S. The offshore world is always a fast-changing arena, but this is truer right now than ever before in our lifetimes. Between now and the end of this year, critical changes to do with FATCA, the Bush tax cuts, and the global banking industry will continue to play out. It has never been as important as it is at this point in history to be diversified globally…diversified among markets, among currencies, and among asset types. It has never been as important to take control of your own financial future so as not to be at the mercy of any one government or economy.
For this reason, we have worked over the past few weeks to pull together one final Emergency Offshore Summit before year-end. We’ve coordinated with our conference team to add this new event to our conference calendar to give you one more chance to understand and act on your best options for going offshore before Jan. 1, 2013.
All our top offshore contacts have agreed to make time in their schedules to be able to join us in Panama Nov. 14-16, when this event will be taking place. With their help, we’ll walk you through what you need to know to protect yourself, your family, and your financial future…while at the same time positioning yourself not only to survive whatever changes lie ahead, but to prosper in the face of them.
This quite literally is your last best chance to get your house in order. I look forward to meeting you in Panama in November. Full details of the program we’re planning are here.
Just Announced: The 2012 Emergency Offshore Summit Encore
Due to popular demand and rave reviews from your fellow readers who joined us last month, we’ve worked, over the past three weeks, to create another Emergency Offshore Summit before the end of this year.
Slated for this November, the event is scheduled to give you enough time to get all of your finances in shape before the end of this year…before tax hikes and FATCA regulations are triggered.
Better yet, starting today, the first 25 readers who register will receive a free VIP Package, including airport transfer, exclusive networking events, and priority consultations.
“Lief, we have accounts at Caye Bank and have inquired to Banca Privada d’Andorra in Andorra regarding an account opening with them during a possible trip to Uruguay. My question is whether you have a recommendation(s) of an offshore bank where you can open an account without visiting the bank in person?”
You could try First Caribbean’s private banking branch in Barbados. They also have a consumer branch in Belize. Their website is www.cibcfcib.com.
“Lief, I wanted to ask a follow-up question to the reply you made to another reader asking about banking in Belize recently. If I were to open a bank account in Belize, should I open the account in their currency or the U.S. dollar?”
No, you wouldn’t open the account in Belize dollars. In fact, you probably can’t open an account in Belize dollars at any international bank in Belize…only at a local bank.
Thinking beyond Belize and to answer the question more generally, the currency you choose for any offshore bank account depends on your long-term strategy. Most banks allow you to hold different currencies at the same time, so opening an account in U.S. dollars and then transferring some of the funds into other currencies should be simple enough.
The information expressed here is solely the opinion of the author. Nothing on this web site or in subsequent communications is to be considered personalized investment advice. Although we may answer your general questions, we are not licensed under securities laws to address your particular investment situation. No communication by any associate or representative of Learn About Panama is to be deemed as personalized investment advice.