Park Wilson, professional real estate investor, founder of Viva Tropical, Emerging Terrains and island owner joins the show. You may not know him yet, but he is Josh’s business partner and today they talk about everything you need to know about investing in real estate.
With over 30 years combined experience this is a can’t miss episode for anyone considering buying or investing in Central America.
Don’t miss this podcast/investment course on today’s show.
In this episode, we discuss:
- What makes property values increase
- How to avoid getting killed on your investment
- How to evaluate markets
- How to approach investing like a professional
- Find out how to spot appreciation
- How to control a market
- How assumptions çan kill your deal and what to do about it
And much more.
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The Show Notes
- Park and Josh’s island
- Get Pay Dirt! Our investment book free!
- Learn more about Real Estate Market Stages
- Our Panama Real Estate Listings
- Our Costa Rica Real Estate Listings
William Friar
Whether due to a need to supplement their retirement income or simply due to the same restless spirit that led them to move overseas in the first place, more and more expats are choosing to use their time abroad as an opportunity to begin an encore career in the tropics.
It’s a great way to experience new things and make friends in your new home. It’s also the ideal way to let your expat life pay for itself.
The idea of launching a new career in a foreign country or starting an expat business might seem daunting to some. However, with these help of these tips, the entrepreneurial expat is sure to find the right enterprise to suit his or her city and situation.
Rita Willaert
Step One: Do Your Homework.
Before you choose a business, or even a city to start it in, it’s best to find out everything you can about the area and its requirements. You’ll want to research local labor laws and employment practices. Find out what permits and licenses you’ll need.
Embassies and chambers of commerce can be helpful for this. They can also help you get referrals for credible attorneys, accountants, and other business contacts. Find out about your tax liability, if applicable, and your options for structuring your business.
Explore your visa options and make sure you won’t have any trouble finding an immigration path that will allow you to work or do business.
Step Two: Learn the Local Culture.
Doing all your research from afar is great. But there’s no substitute for actually getting your boots on the ground in your destination city so you can pick up on some of the more subtle nuances of the culture.
Talk to other business owners. Talk to local working people. Find out how difficult it is to find reliable employees and how high the turnover rate is. You’ll need to know where to find good employees and what is the best way to go about recruiting them.
You’ll also need to know what makes your employees tick. What’s important to them and what incentives will help them work to the height of their ability? What’s their idea of a satisfactory work-life balance, and how big of a commitment can you expect from them?
Even if you won’t be hiring help, it’s still important to get to know the ins and outs of the area where you’re moving. If you’ll be shipping (or receiving) products, you’ll want to know the cost and timeliness of deliveries. If working online, it’s important to consider how reliable the internet service is.
photo by William Friar
Step Three: Choose Your Venture.
You’d think this would be the first step, but oftentimes it isn’t. While some expats may know from day one that they want to open a surf school, others may prefer to be a little more strategic and make their choice of business contingent on the location they choose.
In other words, when starting a business or career as an expat, you have two options. You can either search for the best place to start the particular business you’ve always dreamed of launching. Or you can open the type of business you think might be successful in the one place you’ve always dreamed of living.
Here are some common paths expats take:
- Resume your same field overseas. There are many fields that transition easily from North to Central America. Retired medical professionals open small practices in their new city. The same goes for financial advisors and other professional services. Teachers can easily find jobs at international schools. Many workers even find they can continue their same jobs working remotely from overseas.
- Open a franchise. By opening a branch of an already established business, you can save a lot of time and headache. Chain businesses often have a proven business model, marketing strategies, and plenty of support to help you get started.
- Start an online business or website. Because of the low startup costs, Internet-based businesses are a great option for expats. Examples include consulting services, blogs, and other professional services.
- Fill a niche. Because the Latin tropics are still developing, most areas have a number of specialty product and services that aren’t available but that might be welcomed by other expats as well as the local population. You could open a wine shop, a yoga studio, or a restaurant serving up a specific cuisine the area lacks.
Delwin Steven Campbell
Step Four: Take Advice from Other Expats
When becoming an expat business-owner, there’s no better resource than other expats who have already paved the way. There’s much you can learn from their mistakes and successes. They can refer you to trusted attorneys and other professionals, advise you on business options that might not be viable, and fill you in on a number of invaluable tips and tricks.
Owning a business overseas can be rewarding on many levels. But it’s not a venture to be entered into lightly. Doing your due diligence and seeking sound advice from folks who know can help ensure that your expat life is as profitable as it is pleasurable.
Further Info
Viva Tropical founder Josh Linnes recently interviewed Patrick Vlaskovits, author of the New York Times best selling business book, The Lean Entrepreneur. They discussed this very topic and gave several great tips. Click here to learn how to start your own profitable business in paradise.
So, just how happy are you? Do you feel respected? Well-rested?
What about yesterday? Did you smile a lot? Or laugh? Did you learn or do anything interesting?
These are some of the questions participants were asked in Gallup’s recent survey, which compiled respondents’ “yes” answers into a Positive Experience Index. The survey queried residents of 138 countries and, not surprisingly, a whopping 9 out of the top 10 most positive countries are in Latin America.
Central America Dominates the Leaderboard
More specifically, of the 7 countries in Central America, 6 of them appeared in the top 11 slots. Panama took #2 with an estimated 86% of its population claiming positive emotions.
(The missing Central American nation was Belize. Only because it wasn’t one of the countries surveyed. And we’d easily argue that there are some darn positive people there as well.)
Paraguay, in South America, topped the charts for the 3rd year in a row, with 87% of respondents reporting positive emotions on the previous day. After Panama came a 3-way tie between Guatemala, Nicaragua, and Ecuador (83%) and then another tie (at 82%) between Costa Rica, Colombia, and Denmark (the only non-Latin American country in the top 10, which consistently reports high levels of happiness and well-being).
Honduras, El Salvador, and Venezuela, each of which has been plagued by political unrest and slow economic growth, came in next with 81% of their residents reporting positive feelings. The U.S. tied with 8 other countries for 19th place, at 78% positive.
Proof that Money Doesn’t Buy Happiness
What’s interesting about these results is that, while Latin America is certainly known for its laid-back atmosphere and satisfying quality of life, the region (particularly Central America) is also home to some of the world’s highest rates of poverty, murder, and social and economic inequality. Those are stats that aren’t often met with exuberance.
However, the survey’s results found that, while money does seem to influence people’s happiness levels, it’s only to a small extent. In the U.S., for example, previous research found that a higher income does impact an individual’s overall happiness, but only up to $75,000.
Beyond that amount, income seems to have little effect at all. In fact, the population least likely to report positive emotions was that of Singapore (36%), one of the wealthiest and most developed nations in the world.
So it would appear that some of the most prosperous nations in the world can also be some of the most unhappy ones. While those whose residents live in the depths of poverty bask in positivity.
Is It All a Facade?
You may be tempted to ask, as many critics already have, whether Latin America reports more positive emotions merely due to a cultural tendency to hide behind a smile and try to focus on the positive. It’s possible, as the region does seem to generally try to avoid negative statements regardless of their true feelings.
This naturally positive outlook could easily cause them to respond to these, or any, types of questions in a more favorable way than some of their counterparts. A valid point, but you’d have a hard time making a case for why that’s a bad thing.
Contrast this with countries like Iraq, Afghanistan, and Haiti where feelings of unhappiness are what’s socially acceptable. Or Armenia, for example, whose residents feel ashamed about positive experiences such as success.
Other critics claim that Latin Americans, while unarguably positive, are perhaps just emotional in general. This is evidenced by the fact that they also scored the second highest as a region (after the Middle East) in negative emotions.
Sure they laugh a lot, but they also claim to experience a considerable amount of emotions such as anger and worry. In response to this polarization, some Latin Americans agreed that the findings merely highlighted their culture’s habit of focusing on positive elements like family, friends, and religion despite leading day-to-day lives that can often be incredibly challenging.
Funky Tee
What Latin Americans Have to Say About the Results
Nothing explains the survey’s findings better than the words of the respondents themselves. Take the 33-year-old businessman from wealthy Singapore who said the following about his outlook on life:
“We work like dogs and get paid peanuts. There’s hardly any time for holidays or just to relax in general because you’re always thinking ahead: when the next deadline or meeting is. There is hardly a fair sense of work-life balance here,” he said.
Compare this to a 30-year-old surfing instructor in Guatemala, a country that barely ranks higher than Iraq on the U.N.’s Human Development Index, which measures factors like education, life expectancy, and per capita income.
“In Guatemala, it’s a culture of friendly people who are always smiling. Despite all the problems that we’re facing, we’re surrounded by natural beauty that lets us get away from it all.“
Perhaps no one said it better than the street vendor in #1 ranked Paraguay who wasn’t discouraged at all by the country’s tough economic conditions.
“Life is short and there are no reasons to be sad because even if we were rich, there would still be problems. We have to laugh at ourselves.”
It’s true that much of Latin America has struggles that first-world countries know nothing about. But this data proves those difficulties are doing little to get them down.
And if putting on a smile and facing one’s troubles with the world’s documented most positive outlook is wrong, then we don’t want to be right.
If you’re a would-be expat who has your sights set on an island destination, then it’s likely Roatan, Honduras, has found its way onto your radar. It’s relatively inexpensive, yet offers a well-developed tourist infrastructure.
And, hey, if some of the globe’s top cruise lines have added Roatan to their list of stops, then surely there must be something there worth seeing, right?
Roatan is great, and its recent spike in popularity has certainly been warranted. But just in case you’re looking for a little less tourist traps and a little more authentic island atmosphere, let’s see how it stacks up against Boca Chica, Panama.
Viva Tropical
Round #1: Accessibility
Winner: It’s a Tie
Thanks to recent and coming improvements in both countries’ transportation options, you’ll find both of these islands incredibly easy to get to. Roatan, Honduras, is now accessible via direct flights from several major U.S. cities, such as Houston, Miami, and Atlanta.
You can basically hop on a plane and be there in as little as 2 hours. Not too shabby. This is a drastic difference from a few years ago when the only way to get to the island was via a ferry to the island or a separate domestic flight from the mainland.
Similar improvements are soon to come to fruition in Boca Chica as well. While Panama is also already accessible by way of a short international flight, Panama City has historically been the only option for arrivals.
That’s about to change when David’s Enrique Malek International Airport opens its runways to flights from the U.S. and other nations for the first time. Once you land, it’s only a 30 minute drive and a 10 minute boat ride and you’re on an island archipelago that feels more like you’re hours from civilization.
So, while Roatan is a slightly quicker trip (for now, anyway), Boca Chica stomps its Honduran counterpart in terms of access to other nearby destinations. If you need something that you can’t get on the island, you have to take a 90 minute ferry ride to the mainland.
Boca Chica’s islands require only a quick trip in a motorboat. Once on land, there are a ton of options for everything from shopping and dining to getting your boat repaired or picking up your dry cleaning. You can also explore nearby places like Boquete, Volcan Baru, and other popular tourist attractions in the Chiriqui province.
Round #2: Consumer Goods and Services
Advantage: Boca Chica
Speaking of dry cleaning and repair shops, that’s another area where Boca Chica wins out over Roatan. In Roatan you’re pretty much limited to the options available on the island. Most consumer offerings are located on the west end in places like Coxen Hole and French Harbour.
The options are decent, but the prices reflect the fact that they’ve had to be shipped over from the mainland. Plus if the island doesn’t have what you need, then back on the ferry you go.
From Boca Chica island, you can motor over to the mainland where the town of Boca Chica has enough to meet your basic needs. However, if you’re seeking something a little less common all you have to do is drive the half hour to David which is guaranteed to have what you’re looking for.
It’s so convenient that it wouldn’t be unheard of for someone to spend their day out exploring deserted islands in the archipelago, then shower, change, and head into David for a world-class steak dinner. In the city you’ll also find hardware stores, modern hospitals, government offices, and even a Mailboxes Etc.
James Willmore
Round #3: Investment Potential
Winner: Boca Chica By a Large Margin
The fact that you’re at least somewhat familiar with Roatan, Honduras, but may have never even so much as heard of Boca Chica, Panama, should be your first clue as to which has the greatest potential for appreciation.
Roatan is a well-developed tourist destination that’s been drawing international attention for a while. Boca Chica Island is a hidden gem. The mainland town of Boca Chica attracts a few tourists, mainly because of its popularity as a sport fishing mecca. But most of the islands of its archipelago are virtually untouched.
Roatan has a fair share of real estate that’s a little further off the beaten path as well, but its prices still reflect the level of development available on the island itself. Boca Chica, on the other hand, offers the same (if not better) gorgeous scenery and opportunities for adventure and exploration. But at rock-bottom prices.
Not to mention, that airport expansion we mentioned is about to cause the entire Chiriqui province, including Boca Chica, to explode. More and more travelers from all over the globe will begin visiting the area. Infrastructure will continue to improve. New businesses will open. And the result will be a tremendous spike in property values.
These projections are huge for investors.
Round #4: Atmosphere
Outcome: It Depends
Both Roatan and Boca Chica are great destinations with a really cool laid-back vibe. They also both have a good bit of variety if you’re willing to move around a bit. But each excels in a particular genre the other lacks.
In the more populated areas of Roatan you’ll find your typical Caribbean atmosphere. There are your usual tourist developments and hotels within walking distance of bars and restaurants that offer a vibrant night life.
Boca Chica doesn’t have that. There are good times to be had in Boca Chica, but they generally come in a more low-key format, like a relaxed happy hour spent on a restaurant patio.
By contrast, Boca Chica offers opportunities for complete solitude that would make even Robinson Crusoe drool. You can relax in a hammock on your private patio with nothing but your thoughts and a few howler monkeys to keep you company. Roatan has a few more secluded spots too, but they don’t compare.
Viva Tropical
Round #5: Tourist Infrastructure
Advantage: Roatan by a Landslide
Whereas Roatan has all the activities and tourist offerings you’d expect of any world-class vacation spot, Boca Chica’s options are drastically skewed towards one genre: aquatic adventures. It’s a great jumping-off spot for deep sea fishing, sailing, and other seafaring activities. For much more than that, you’ll need to venture to one of the other destinations in the province.
Roatan has a variety of options for dining, lodging, and other amenities. It’s a well-developed tourist hotspot. But that also has its drawbacks. Like the hordes of cruise ship passengers that crowd the beaches every few days or so.
It’s important to note though that Boca Chica’s relative lack of tourist offerings represents another great area that’s primed for growth. As the number of visitors to the area increase, there will be tremendous potential for entrepreneurs looking to profit by opening attractions like yoga retreats and sport fishing operations.
Michael McDonough
Round #6: Host Country
Advantage: Easily Panama
Outside of Roatan, there just aren’t a lot of expats flocking to Honduras. With the world’s #1 highest intentional homicide rate (82 of every 100,000 deaths), to say the country has a crime problem is a gross understatement.
Likewise its education system is fair, and its infrastructure is well below average for the region. You can’t drink the water, and many cities have inadequate wastewater treatment systems. Health care is also subpar, with only 57 physicians per 100,000 people.
Contrast this with Panama, whose infrastructure rivals that of first-world countries in some of the larger cities. It has good roads, reliable public transit, and some of the best internet and cellular access in all of Latin America.
There are a number of established expat communities where large numbers of English-speaking immigrants have more than paved the way for newcomers. There’s also Panama City, a bustling cosmopolitan city that many compare to Miami.
Panama’s schools are good. Its healthcare is great. It’s also one of the safest countries in the region, with less violent crimes in a year than New York City has in a day.
Panama’s government is pro-business, pro-investor, and extremely friendly to foreigners. Its pensionado program, with discounts as high as 50% on things like entertainment and travel, is the reason it’s often dubbed one of the best places to retire in the entire world.
Round #7: Snorkeling
Winner: Roatan
Boca Chica has a few private beaches where you can spend an afternoon snorkeling. Most notably there’s nearby Islas Secas, which is a 45 minute boat ride away, or Coiba National Park. It’s one of the largest marine parks in the world, but it’s a good 2-3 hours by boat.
In the waters surrounding Roatan there are over 100 diving and snorkeling sites, many of which are accessible directly from the beach. And since the island is so popular with cruisers, there are a number of outfits offering snorkeling excursions for tourists.
Round #8: Diving
Verdict: Boca Chica by a Nose
Roatan does have the benefit of being located near the Mesoamerican Barrier Reef, which reaches down to the island from Belize. As a result, it attracts many divers and is great for beginners.
However, Boca Chica lies in close proximity to a spot that offers some of the world’s best dives, according to National Geographic. Just 27 miles south is Islas Ladrones, which is teeming with schools of jack, snapper, and barracuda. There are also smaller species like surgeonfish, parrotfish, triggerfish, angelfish, and more that can be seen year round.
You can also spot several species of shark and, at certain times of the year, giant manta rays and humpback whales. Visibility near the island is 30-80 meters.
Further away, as mentioned for snorkeling, is Isla de Coiba, where you can explore a 330,000-acre reef which contains 60 of the world’s 75+ species of hard and soft coral. In these protected waters you’ll also find mullet, stingray, puffers, moray eels, and gentle sea turtles.
Snowmanradio
Round #9: Fishing
Winner: Boca Chica Hands-Down
Due to the abundance of species represented in Boca Chica, the fishing in its waters is second to none. A large majority of its tourist accommodations are comprised of fishing lodges, and the number of world record catches that were landed in and around Boca Chica is remarkable.
Most of these were snagged near Hannibal Bank, a world-famous fishing hotspot where the ocean floor rises sharply from thousands of feet deep to a mere 120 feet. Where this cliff juts out, tremendous schools of inshore fish merge with the offshore species who feed on them. Marlin in excess of 1,000 pounds and tuna over 300 pounds have been caught in these waters, as well as snapper, amberjack, and snook.
Since the island actually started as a commercial fishing hub (until tourism began to dominate), you won’t be disappointed with the fishing in Roatan. That is, unless you’ve already experienced the fishing around Hannibal Bank in Boca Chica. That’ll definitely ruin it for you.
Viva Tropical
Round #10: Land Exploration
Verdict: Boca Chica Takes the Round
Roatan has a few areas available for exploration if you’re willing to venture over to the east side of the island and get away from the more heavily touristed areas. There are botanical gardens and nature trails, but it’s also somewhat of a controlled environment.
By contrast, the jungles and rainforest of the Boca Chica archipelago are absolutely prehistoric. There’s an abundance of old growth trees and entire islands that are completely covered in dense untouched forest. There’s also a general attitude of preservation and conservation among the local population, as well as the developers who are starting projects in the area.
Take for example Boca Chica Island, the site of our latest Adventure Colony. It’s a place where like-minded expats can own their very own unspoiled piece of nature. It’s a community with a shared vision of living in harmony with the environment, as evidenced by Monte Vida, the world’s first crowd-funded park.
Viva Tropical
Grand Champion
Just like many of the individual categories, the verdict of which island destination is the right place to establish your expat home is one that’s best left for you to decide.
If you’re looking for an established spot with amenities already in place and a thriving expat community, then check out Roatan. If you’re a more intrepid expat who wants to be one of the first on the scene, for both investment potential as well as bragging rights, then Boca Chica might be the place for you.
Map of Boca Chica
Boca Chica Fast Facts
- Population: About 1,200 (Numbers are hard to nail down, but this is a good guestimate)
- Typical temperature: From 70 to 88 degrees Fahrenheit
- Nearest airport with U.S. flights: Tocumen Airport. Domestic flights to Panama City, Panama and international flights to Costa Rica depart from Enrique Malek International Airport in David
- Nearest U.S. consulate: Panama City, Panama
Map of Roatan
Roatan Fast Facts
- Population: 50,000
- Typical temperature: From 80 to 88 degrees Fahrenheit
- Nearest airport with U.S. flights: Juan Manuel Gálvez International Airport
- Nearest U.S. consulate: Tegucigalpa, Honduras
A discussion with off-grid specialist Eric Youngren, one part adventurer and one part alternative energy expert. Eric is the perfect person to talk about off-grid technology for Viva Tropical readers and listeners. With extensive experience in remote and third world locations we set out to learn some practical advice from a qualified person. Eric can install systems anywhere in the world which makes him a potential candidate for any project you might have.
Tune in and find out if off-grid living is worth it for you.
In this episode, we discuss:
- How do you know how much energy you need?
- What system is right for you?
- Is living off-grid hard?
- What do I need to know before considering getting off the grid?
And much more.
Listen to the show
You can listen to the show using the player above or grab it and listen on the go via one of the following options:
- Click here to download the mp3
- Click here to subscribe via iTunes
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- Click here for the show archive
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We appreciate your reaction to episodes of Viva Radio and feedback about how we’re doing.
Send us your thoughts any time in an email or comment below.
The Show Notes
When looking at lists published by international living gurus citing the best places to live in and retire to overseas, the nations of Ecuador and Panama consistently appear among the places with the highest rankings.
As beautiful, affordable tropical destinations go, they’re among the best of the best. And, while they’re both excellent overall as places to retire, raise a family, start a business, or just live for a short time, each has certain areas where it shines brighter than the other.
We’d be hard-pressed to say which country is the best or, even more specifically, which one is the best for YOU and your particular situation. That decision is best left up to your family, based on your individual needs and priorities.
What we can do is highlight a few categories that are important to expat families and tell you which country excels in that area.
D. Bmcnicol
Round #1 – Lifestyle Hacks
Winner: It’s a Tie
One of the coolest things about living abroad is the ability to enlist help for tasks that you might be fed up with doing yourself, but would’ve never had the means to hire out in North America. Some examples are maids, gardeners, drivers, tutors, and nannies.
And domestic help is abundant and affordable in both Panama and Ecuador. We’d be tempted to give this category to Ecuador for its lower cost (around $10 per day for the services of a maid vs. $15 for the same work in Panama).
However, as is often true, you tend to get what you pay for. So some might argue that the quality of service you receive from domestic helpers is superior in Panama.
Eddie Codel
Round #2 – Connectivity
Outcome: Panama By a Nose
This is another area where both countries excel far beyond the reach of most of their Latin American neighbors. And, up until recently, this category would have gone to Panama by a landslide.
However, Ecuador is aggressively working to improve its internet coverage. As a result, the country’s connectivity is increasing by leaps and bounds with a goal of access in 50% of households by 2015. (It’s currently closer to 35%.) Free public access centers are also widely available across the country.
While Ecuador’s connectivity is great, Panama’s is excellent due in part to a long-standing U.S. military presence. In fact, it ranks #2 in all of Latin America for technology and internet penetration and #1 for wireless availability.
Most Panamanian cities offer affordable broadband service, and there are free wi-fi hotspots nationwide. Because of its technological advances, companies such as Dell, 3M, and Philips have chosen it for their regional headquarters and customer service centers.
Pavel Kirillov
Round #3 – Living Options
Slight Edge: Panama
Both Ecuador and Panama have a lot to offer in terms of variety of living options. When it comes to mountain towns, Cuenca, Ecuador, and Boquete, Panama, are among some of the top expat destinations in Latin America. There are others as well, such as Loja, Quito, and Vilcabamba in Ecuador and Volcan, El Valle, and Santa Fe in Panama.
There are also popular beach towns in both countries. Salinas, Ecuador, has been compared to Miami’s South Beach. There’s also Montanita and Manta. Panama has Bocas del Toro, the quintessential Caribbean beach town, as well as Coronado and Pedasi.
Panama City trumps places like Ecuador’s Quito and Guayaquil if you’re looking for something that more closely resembles a first-world city. The other place where Panama takes the cake is with its options for island living. Ecuador has the Galapagos Islands, a great place for tourists to visit or explore but not necessarily live.
However, Panama offers options like Boca Chica Island, which offer nature-loving expats the opportunity to own their very own piece of a private island that’s only a hour away from the country’s second-largest city and an international airport.
Wogo 24220
Round #4 – Green Living
Winner: Ecuador
While Panama has long had its sights on continuing to improve its infrastructure and commerce, it lags a bit behind in its sustainability initiatives. However, it is making some strides in the right direction. Take for instance the village of Kalu Yala, a development that has a goal of becoming the world’s most sustainable residential community.
Most green efforts in Panama are more grass roots and less government-driven. On the other hand, Ecuador has the unique distinction of being the only country in the world where the rights of the natural environment are protected by the nation’s constitution.
Sustainability issues are on the government’s radar in Ecuador as it battles issues like the threat of drilling in its Yasuni National Park, the most biodiverse place on earth.
Vilseskogen
Round #5 – Cost of Living
Clear Winner: Ecuador
Ecuador and Panama both offer the ability to live satisfying lifestyles for a fraction of the North American budget. As you can imagine, prices vary greatly from one city to the next, with some of the more developed areas running much closer to U.S. prices.
However, overall the cost of living is considerably less in Ecuador. In fact, it’s often one of the country’s biggest selling points, with many expat couples claiming to live just fine on a mere $1200 per month including rent, which averages around $450. This includes luxuries like high speed internet and once-a-week maid service.
Both countries have great discount programs for their senior adults, with Panama’s pensionado program being one of its most attractive benefits for retirees. However for most expats, particularly young families, it’s cheaper to live in Ecuador.
Rivera Notario
Round #6 – Ease of Access
Advantage: Panama
This was an easy one. Mainly because the majority of Ecuador’s incoming flights have layovers in places like Panama City (as well as Miami, Bogota, and places in the Caribbean). As a result, travel to Ecuador is longer and a bit more expensive.
It does have great public transportation once you fly in to Quito or Guayaquil, as well as connecting flights to a number of regional airports.
By contrast, Panama’s recently expanded Tocumen International Airport receives direct incoming flights from multiple U.S. cities, as well as various points in South America. David’s Enrique Malek International Airport will also soon begin welcoming international flights, opening up the western regions of Panama to expats and tourists from all over the world.
Matthew Straubmuller
Round #7 – Business Climate
Champion: Panama, Hands Down
To decide this category, you only need to look at the stats. The International Finance Corporation ranks Panama 55th in the world for ease of doing business, compared to Ecuador’s rank of 135th. This survey is based on factors that affect one’s ability to start and operate a local business.
This comes as no surprise, as Panama’s government has historically been extremely pro-business and pro-investor. It’s also somewhat of a tax haven and an increasingly popular place to open an offshore bank account. Panama also offers a whole host of visa options, with the number of choices increasing frequently.
Ecuador, on the other hand, has a reputation of being a bit unstable and unpredictable. It struggles with issues such as high government turnover rates and an economy that is based a bit too heavily on petroleum.
However, Ecuador’s economy is growing. The country is also taking steps to reduce the government’s influence in certain business sectors.
Gaspar Serrano
Round #8 – Banking
Advantage: Panama
Both Ecuador and Panama benefit from having a dollarized economy. However, both have seen requirements tightening in recent years due to laws like FATCA and other U.S. tax evasion agreements. As a result, it’s becoming increasingly difficult for foreigners to open an account.
That being said, the banking process is far more friendly to foreigners in Panama. It’s home to a number of international banks and is emerging as a major player on the global banking scene.
Ecuador, on the other hand, suffers from inconsistent regulations and subpar accounting standards, although its banks’ performance has improved in recent years. Due to the inconsistencies, however, the process of opening an account can be a bit long and tedious.
thinkpanama
Round #9 – Investment Opportunities
Our Pick: Panama
When you look at the ingredients for a savvy investment, they include factors like low costs, massive infrastructure projects, a focus on tourism, and government incentives. Both Ecuador and Panama have all of these. And lots of them.
Panama just has more. Its real estate is still affordable. The government has recently invested $15 billion in projects like airport expansions, new roads, and a metro system. There are tax breaks on everything from the importation of building materials to build a hotel to income tax on land purchased for reforestation.
Ecuador offers many of those same advantages, and often at a lower cost. So you could argue that in Ecuador there’s a bit more room for appreciation. However, the benefits of investing in Panama are just still too good to award this category to anyone else.
Presidencia de Republic de Ecuador
Round #10 – Health Care
Outcome: Another Tie
Ecuador and Panama both benefit from having excellent health care systems, with skilled medical staff and modern facilities. English is widely spoken by doctors in both countries, many of whom trained in the U.S, and hospitals offer the latest in technological advancements.
The low cost of care is also a big plus, with procedures generally running about ¼ of the price for the same service in North America. Health insurance is also affordable and widely available.
Both countries suffer from the same main drawback in this category: availability in rural areas. While they both have state-of-the-art hospitals, they’re found only in the largest cities. Clinics in more remote locations may be limited to basic services or even first aid only.
ThinkPanama
Round #11 – Consumer Goods
Winner: Panama
Both Ecuador and Panama have a surprisingly good selection of consumer goods. As a result, you usually need only drive to the nearest city to find exactly what you’re looking for, or at least a comparable replacement.
Where Ecuador suffers in this arena is due to its ever-increasing taxes. Many items have become more difficult to find, or at least more expensive, in recent years. Consequently, fewer and fewer items (like vehicles and cell phones) are being imported.
Panama, on the other hand, has become quite the shopping hub for folks all across Latin America. This is due in part to its low value-added tax of 7% (vs. 12% in Ecuador). We’ve even seen people who traveled from Ecuador to Panama City to buy several flat-screen TV’s due to the better prices and availability.
D. Rorfold
Round #12 – Foreign Land Ownership
Victor: Panama
In both Ecuador and Panama, foreigners who buy property have their rights protected by the constitution just the same as nationals of that country. There are also few restrictions on what land they can buy. Well, there’s only one really, and it’s in Panama where foreigners can’t own land within 10 kilometers of the border.
Both countries offer an abundance of land available at, in some cases, rock-bottom prices. However due diligence is absolutely necessary before buying land in either country.
Purchasing real estate as a foreigner can be a challenge, but the whole process is a bit easier in Panama. A good attorney is a must, so choose one who’s experienced in land transactions and can handle things like researching the title, drafting contracts, and registering the deed.
D Rorfold
And the Grand Champion Is…
Nah. We didn’t keep score. There’s just too much to love about both of these countries for us to try to give the trophy to one or the other.
What’s more important than our opinion is your own experience with each of these fine countries. So, if Ecuador and Panama are on your short list of potential expat destinations, then we suggest you open a new tab and start looking for flights. There’s no better way to pick a winner than to just let the two duke it out firsthand.
Map of Panama
Panama Fast Facts
- Population: 3.8 million
- Typical temperature: Temperature typically varies from 72°F to 91°F
- Nearest airport with U.S. flights: U.S. bound flights leave daily from Tocumen International Airport
- Nearest U.S. consulate: Panama City
Map of Ecuador
Ecuador Fast Facts
- Population: About 15.49 million
- Typical temperature: Ecuador is known for its micro climates.
- Major airports with U.S. flights: Quito, Cuenca and Guayaquil. Complete list of airports in Ecuador.
- Nearest U.S. consulate: Quito and Guayaquil
A R Vindgrove
There are so many good reasons to live in Panama. Some make the move for the climate, the friendliness of the Panamanian people, and of course because it is home to one of the best retiree discount programs in the world.
So it’s easy to see why Americans are choosing this country as their retirement haven.
But sometimes the best advice and position on life in the tropics comes from those who are living the expat lifestyle every day. Today, in our Expat Interview series we focus on three expats in Panama who share their living experiences and reasoning behind their decision to pick up their lives and move them to the tropics.
Expat Interview #1: Kris C.
Kris C.
Why did you choose to move to Panama? And how long have you lived there?
We were nearing retirement age and realized we didn’t have enough money to retire comfortably where we were, and that was if we worked until we were 70. We needed something more affordable.
We made a checklist of what we wanted – close enough to the US for visits to family, warm climate, stable government, crime under control, decent infrastructure…. and Panama just rose to the top of the list. We visited Panama City first and loved the country, but not the hectic pace of the city. Next we looked at David and knew it would work for us. We have been here 1-1/2 years and are very happy!
Where were you living previously?
Sarasota, Florida for 17 years.
What do you do with your time?
I don’t know how I stay so busy every day! There are still the usual daily chores, and I tend to cook from scratch more with all the great produce available here. I have more time for my photography hobby. I write a blog which is growing, and more and more people contact me through the blog. I’ve been riding my bicycle almost every day which is good exercise, and I’m also getting to know the city better and meeting new people.
I enjoy spending time with my friends. I try to study Spanish a bit every day. I like to work in the yard. I like to sew. Well looking at that list, it’s no wonder I stay busy. We are also traveling more both in and out of Panama.
What surprised you when you first came to Panama?
It is SO beautiful here. I think I loved it from the moment I saw those lush green mountains from the airplane window. I expected it to be really hot but it’s actually more comfortable than Florida in the summer. We hardly ever see mosquitoes and rarely get bitten or stung by anything even though we are outdoors a lot. The people are so friendly and welcoming, and adjusting to life here has been much easier than I expected. We have been made to feel like a part of the community, and members of a number of families.
If given a chance, which other South American country would you want to live in, and why?
When we decided that Panama was good for us, we really didn’t research other options. Something would have to change a lot before we’d consider moving. If it came to that, maybe Mexico, or Nicaragua? I hope to travel through Central America so when we get a chance to visit these other countries we should have a better idea of where else might work for us.
Expat Interview #2: Christopher Powers, Panama for Real
Chris Powers
Why did you choose to move to Panama? And how long have you lived there?
I chose to move to Panama because my wife, Marlene, is Panamanian, we lived 8 years together in the U.S., and we just decided we wanted a fresh, new start. Since she’d given my country a try for so long, it just made sense to try hers. Plus, I’d constantly moved our family from one place to the next in the U.S., at the whim of my employer, and it got to where my family was alone all the time.
For holidays, birthday, and any other significant event, it was only us. We’d just had twin boys, making it 4 kids total, and we wanted our kids to be surrounded by family and a warmer atmosphere. Panama is very family-oriented. Now, my kids have more of a life than we do. It seems they’re always at a cousin’s birthday party or a family get-together. We’ve lived in Panama going on 5 years.
Where were you living previously?
Prior to moving to Panama, we were living in Columbus, Ohio.
We’ve lived all over the place though. We started our family in Anchorage, Alaska, when I was stationed there while in the U.S. Air Force. From there we moved to South Florida (Boca Raton and Palm Beach Gardens) and then on to Chicago, Illinois before finally landing in Ohio.
What do you do with your time?
I spend most of my time working on my website, which is a site dedicated to helping people understand everything about Panama before they make the decision to move here. We (my family and I) travel all over this country. I write detailed reports and put together videos about each province, town, and neighborhood in Panama.
I tell you all about the cost of living, entertainment, utilities and infrastructure, medical care, and everything else you need to know. Plus, I write a lot of blog posts and articles giving people tips and pointers about living in or visiting Panama.
For example, I just wrote this post about the new Metro train system in Panama or my newest, probably most popular post yet on dating in Panama and if you just want to learn about one of the neighborhoods, here’s a video on the most popular beach town in Panama.
When I’m not working on Panama For Real, I’m busy punching out my next novel. If you happen to like dark urban fantasy (very action-packed and violent) check out my first novel, Mirror Images Book 1: The Darkness of Man. It’s only $.99 right now on Amazon (for Kindle).
What surprised you when you first came to Panama?
What surprised me most about Panama is how easy it actually is to live here. You spend so much time contemplating and trying to make sense of everything involved in a move overseas.
Then, when you finally do it, you realize it’s not all that difficult. You just have to adapt to your new lifestyle. The two most difficult things are learning Spanish (something I’m still struggling with all these years) and learning to truly relax.
Most people move to Panama because they want a slower pace, but they don’t realize what that actually means. Yes, it’s much more chill here in Panama. Everything slows down, but you have to realize that means EVERYTHING, to include anything involving the government. Don’t expect to get any paperwork filed easily. It takes forever here.
If given a chance, which other South American country would you want to live in, and why?
This is a tough one. Which country other than Panama would I like to try? If I could afford it, I think I’d have to say Argentina. Have you ever seen the photos and videos of the Argentina vineyards? I’m not even a wine drinker (I like my beer), but I think owning a vineyard would be awesome. And Argentina just looks so stunning. Yes, I’ll go with Argentina.
Expat Interview #3: Elizabeth Vance
Elizabeth Vance
Why did you choose to move to Panama? And how long have you lived there?
My former executive position brought me to Panama six years ago. We’ve lived since then – almost six and a half years.
Where were you living previously?
In the Chicago, Illinois area.
What do you do with your time?
I’m a writer and the bestselling author of two books about Panama. They include The Gringo Guide to Panama: What to Know Before You Go, and The Gringo Guide to Panama II: More to Know Before You Go. Both launched in the last 18 months, and have hit #1 and #2 for books about Panama on Amazon during that time.
In addition to writing, I run our household (which is more than it sounds like, but this is a developing nation, so everything takes longer than expected), and I consult part-time with companies considering moving to Panama and setting up business in Latin America.
What surprised you when you first came to Panama?
Ha! Almost everything. Probably the biggest thing that surprised me was that the city of Panama appears so glamorous with all the skyscrapers and glitzy night clubs and gorgeous hotels, but when you get down to conducting business and day to day life, the inefficiency and processes of getting anything accomplished can be exhausting.
Things here generally take three times longer to get done than they might in the U.S. I talk a lot about this and the realities of acclimating to life as an expat coming from North America to Panama in my first book.
If given a chance, which other South American country would you want to live in, and why?
I adore Colombia for the people and the culture. Bogotá is my favorite place, and my husband loves Medellín. The people are welcoming and warm. The food is delicious, and the shopping (especially for silver and leather goods) is fantastic.
Add that to the stunning mountain backdrop of either city and you have a winning combination. The ability to travel easily from Panama to every other capital in Central and South America is another reason why we chose to relocate here. That’s also a topic I cover in the second Gringo Guide book.
You can read more about me and my stories about Panama here.
In this episode Josh calls up his friend Rich Lipner, owner of Dos Jefes coffee farm in Boquete, Panama. Rich has been diligently producing his own coffee called Cafe De La Luna as well as giving coffee tours on his private farm. His knowledge is very high when it comes to the world of coffee.
Think of this show as your introduction to coffee growing as you hear from two passionate coffee drinkers.
In this episode, we discuss:
- Where is the best area on the globe to grow coffee.
- Perfect French Press, The exact time to wait before you press.
- What are the best ways to prepare coffee.
- Where the most expensive coffee in the world is grown, up to $300 a pound.
- Why you should ask where the beans come from at your local coffee shop.
And much more.
Listen to the show
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- Click here to subscribe via iTunes
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- Click here for the show archive
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Send us your thoughts any time in an email or comment below.
The Show Notes
Global Pacific
The decision to move abroad and join the thousands of expats who are living in Boquete, Panama, is an exciting adventure. But it can also be a bit daunting.
There are a million questions to answer and hurdles to surmount before you actually, finally find yourself living in your own tropical paradise. One of the biggest ones is the question of housing.
Renting is often the best option for those who might want to take their time finding a more permanent place to live. It’s also great for those who only plan to live in Boquete for a short time, like families who spend only a year or two overseas to experience other places and cultures.
Much like buying a home, finding the perfect property to rent can be a complicated process. But here are some great options and ideas to help simplify your search.
1. Walk the streets.
If you’re already on the ground in Boquete, one of the best ways to find a place to live is by strolling the streets in the area where you want to be. Look for “For Rent” signs. Check bulletin boards in grocery stores, restaurants, and other businesses to see if any ads are posted.
It’s a great way to meet people and get a feel for the area. It also allows you to immediately rule out any places that don’t look up to par.
2. Check local websites.
Even if a home exchange doesn’t work for your particular situation, local websites are a great resource when searching for rental properties. A few examples are Craigslist.com, Viviun.com, and Encuentra24.com.
Check these sites often for new listings, and follow up on all possible leads. Don’t rule out a potential property based on the posting alone. You never know what you might be able to negotiate if you just reach out to the seller.
In addition to searching, you can also try posting your own ad indicating what type of property you’re searching for. Post the same ad on all your social networking sites. You could have a friend who has a friend who has a property that fits your exact specifications.
3. Read blogs.
There are a number of local bloggers in Boquete who might have leads that can help you. Those sites are authored by folks who are right there on the ground. They have lots of knowledge they can probably share. You just need to ask.
A few local sites in Boquete are ChiriquiChatter.net and BoqueteGuide.com. The authors of this site also have a few connections to Boquete.
Kris
4. Try the local newspapers.
Most local newspapers, both Spanish and English, have classified sections with real estate listings. That’s another good place to find out about available properties. Most papers also have a website.
In Boquete, there’s El Visitante, La Prensa (the national newspaper), and El Informante (based in David). It’s also a great idea to place your own ad, much like with the classified sites.
5. Ask around.
In addition to asking friends and friends of friends, you can also reach out to Boquete locals on forums or by contacting members of expat clubs and organizations. You might come across someone who was toying with the idea of renting their property or stumble on a great listing before it’s even offered to the general public.
Boquete.ning.com is a great expat community site. Post a discussion or try reaching out to key people in the community.
6. Try a home exchange.
As times get tougher, many expats and travelers are looking to save a few bucks on costly hotels and apartment rentals by offering their home to willing residents in their destination city. It’s pretty simple. You open up your home to a Boquete homeowner, and they do the same.
What you get is comfortable, furnished living quarters for virtually no cost whatsoever. It’s also a great way to see what it’s like to truly live like a local.
You can find available properties by signing up for an online home exchange club or just by posting ads on local Boquete sites like forums and classified pages.
Best of the Better
7. If all else fails, contact a professional.
There are certainly ways to locate a property on your own, but if you find it difficult or if time is of the essence you can always hire a real estate agent. They can scour all of the resources available for property listings and set up showings for you when you come to visit. Or they can supply you with all the information you need to make a decision sight unseen.
Keep in mind that realtors are often paid a little differently overseas, so you might need to consider payment for their time and not just a commission when the property is located.
What’s on the Market Now
Just to give you an idea of what’s out there, here are a few properties that are currently listed for rent in and around Boquete.
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A monthly rate of $500 gets you a 1 bedroom studio apartment on an organic farm in the mountains just ten minutes outside of town. The property is gated, fenced, and monitored by a full-time caretaker.
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For $675 per month, you can rent a 1 bedroom (plus loft) casita in the beautiful Volcancito area of Boquete. It comes fully furnished and includes utilities as well as gardening services.
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$850 per month will put you in a recently renovated 3 bedroom, 1 bath home that’s a minute walk from downtown and offers sweeping views of the valley. It features high-end finishes and all new electrical and plumbing systems.
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For $1,350 per month, you can have a 3 bedroom, 3 bath home that faces Volcan Baru, Panama’s highest peak. It’s 5 miles from town and features two fireplaces and an outdoor kitchen.
These are just a sample of what’s available, but there are plenty more just waiting for you to give them a look. Whether you’re seeking a villa outside of town or a luxury condominium within walking distance of everything, you’re sure to find what you’re looking for in Boquete.
Call, click, or visit today!
Map of Boquete, Panama
Boquete Fast Facts
- Population: About 22,435
- Typical temperature: Average temperature is 70 degrees
- Nearest airport with U.S. flights: U.S. bound flights leave daily from Tocumen Airport, both domestic and international flights to San Jose, Costa Rica depart from Enrique Malek International Airport in David
- Nearest U.S. consulate: Panama City
New York Times best selling author Patrick Vlaskovits joins Josh for a Spunky Conversation. Their discussion touches on subjects from what you should really be thinking before you start a business to a broken board leash and a harrowing at-sea rescue. The latter occurred the last time they stand-up paddled in a secret location in Panama. Enjoy!
In this episode, we discuss:
- How to start a reliable business in an expat town.
- How to avoid dumb mistakes most people make.
- Why you should use Lean Business philosophy to make your next venture profitable.
- How the biggest obstacles to your success can be dealt with before you even start.
And much more.
Listen to the show
You can listen to the show using the player above or grab it and listen on the go via one of the following options:
- Click here to download the mp3
- Click here to subscribe via iTunes
- Click here for the RSS feed (non iTunes)
- Click here for the show archive
React to the Show
We appreciate your reaction to episodes of Viva Radio and feedback about how we’re doing.
Send us your thoughts any time in an email or comment below.
The Show Notes
- The Lean Entrepreneur by Patrick Vlaskovits and Brant Cooper
- Follow Patrick on Twitter
- Eric Ries the inventor of Lean Philosophy
- Boca Chica Panama – an article by Viva Tropical
- Boca Chica Island– Our adventure colony project in Panama.
Jeff McNeill
Opening an offshore bank account is a relatively simple process for those who plan to work or simply live abroad. It’s also a great idea even for U.S. residents who wish to diversify their portfolios and reduce their exposure to litigation or political risks.
However, as a U.S. citizen or expat with an offshore bank account, it’s important that you realize the tax and reporting implications of foreign account ownership. It’s also important to note that many of these requirements aren’t tied to income. Merely having a financial interest in the account is enough to get you on the hook.
Who Is Required to Report?
Well, for starters, foreign financial institutions are required to enter into an agreement with the IRS and report on all their clients who are U.S. persons, or else face a 30% withholding tax on all U.S. transactions. (Furthermore, if you as their client do not comply with federal reporting requirements, they’re required to impose the same withholding on any payments to you.)
The IRS can then cross-check this information with the individual filings they have (or haven’t) received. So, if you were wondering whether the IRS could or would ever find your piddly little account and actually do anything about your failure to report it, the answer is yes. And, if that happens, then a 30% withholding tax will be the least of your worries. More on that later.
Bottom line: If you’re a U.S. resident or citizen (no matter where you currently reside) and you have interest in a foreign financial account (no matter whether it’s generating income) that meets the minimum reporting threshold, then you need to keep reading.
What Forms Do I Have to File?
This is probably as good a time as any to mention that we are by no means tax or legal advisers. The United States’ tax and reporting laws are complicated and can change on a whim. They also vary from one individual to the next, based on your specific situation.
Our best advice? Use this outline as a guide to help you know where to start. Consult the IRS website for more specific information or, if your situation warrants, a tax or legal professional with experience in foreign account reporting.
To give you a general idea of the requirements at the time of this post, here are the 3 main forms you’ll deal with:
Form 1040 – U.S. Individual Income Tax Return
If you’re a U.S. citizen or green card holder you’re required to file a U.S. tax return, no matter where you live now. That is, as long as your total income (domestic and foreign) is over $9,350. That’s because U.S. citizens are taxed on their worldwide income.
The U.S. has treaties with a number of foreign countries that may allow you to reduce or even eliminate any U.S. tax liability (if you’ve already paid taxes on the income overseas). However, you still have to file in order to take advantage of these credits. You’ll do this by attaching Forms 2555 and 1116.
Whether or not you’ll need to file a state return depends on where you lived before you moved away, as it varies from state to state. New Mexico, Virginia, California, and South Carolina are among those that will still require you to file.
Form 8938 – Statement of Foreign Financial Assets
In 2010, the U.S. Congress enacted the Foreign Account Tax Compliance Act (FATCA), a statute designed to help recoup federal tax revenues by making it more difficult for U.S. persons to hide assets in offshore accounts. As a result, U.S. citizens are now required to report any financial interests they have in foreign financial accounts or foreign financial assets, provided they meet the minimum threshold.
For those living in the U.S., that’s assets totaling at least $50,000 on the last day of the tax year, or at least $75,000 on any day during that year. This threshold is raised to $100,000 and $150,000 for married couples filing jointly.
For taxpayers who don’t live in the U.S., those minimum limits are raised to $200,000 on the last day and $300,000 during the year for individuals. For married couples outside the U.S., it’s $400,000 and $600,000 respectively.
These thresholds are aggregate, so multiple assets that collectively add up to these amounts also put you on the hook. Amounts are based on fair market value in U.S. dollars as of the end-of-the-year exchange rate.
The Form 8939 is filed with your federal income tax return and is due when your taxes are filed. In one piece of good news, U.S. citizens living overseas are given an automatic two-month extension (to June 15th) on any filing and payment requirements. Additional filing extensions can be requested. However any due payments made after June 15th will be subject to interest and penalties.
Form TD F 90-22.1 – Report of Foreign Bank and Financial Accounts (a.k.a. “FBAR”)
The FBAR is a product of the erroneously-named Bank Secrecy Act, and it’s required of anyone owning (or controlling) foreign financial assets totaling $10,000 or more at any point during the year. The value is determined by reviewing periodic account statements to determine its maximum value for the year and is reported in U.S. dollars based on the end-of-year exchange rate.
While the FBAR is filed with the IRS, it’s done completely separate from your tax return. Due on June 30th (meaning actually received, not just postmarked), it should be submitted electronically through the Financial Crime Enforcement Network (FinCEN) e-filing system.
Image Money
What Happens If I Fail to File the Required Forms?
Well, that depends. Penalties vary based on whether you failed to file one or multiple forms, whether your omission was committed in conjunction with any other illegal activity, and whether or not your failure to file is determined to have been a willful one.
Since the above forms are filed independently of each other, they’re also penalized as such.
Let’s start with the Form 8938. Failure to report any foreign financial assets when you file your tax return can earn you an initial fine of up to $10,000, plus an additional $10,000 for each month thereafter, up to a total of up to $60,000. Depending on the circumstances, criminal penalties may also apply.
With the FBAR, the punishment is even steeper. Even a non-willful violation can be earn you a $10,000 fine. However the penalty for a willful violation starts at the greater of $100,000 or 50% of the total balance of the applicable accounts. This offense can also be criminally prosecuted with additional fines up to $100,000 and/or up to five years in prison.
The limit on that penalty increases to $500,000 and/or ten years in prison (per offense) if you’ve also violated another law (e.g. the Internal Revenue Code) or been involved in criminal activity involving more than $100,000. In other words, there’s a special place in penal hell for those who use offshore accounts to hide their involvement in illegal activity. Don’t do it.
The IRS claims that their goal in enforcing these penalties is compliance with the law, not revenue. We’ll take their word for it on that one, but the bottom line is that everyday unsuspecting citizens can and are being charged these fines for simply failing to do their due diligence on what’s required.
What Determines Whether a Violation is Willful?
An act is considered to be willful when it’s done with the knowledge that it violates the law. Ignorance of the law is a defense. However, it’s a difficult one to prove.
Obviously, if you’re the one who opened the account, you’ve got a weak case. You’re similarly screwed if you intentionally responded incorrectly to question 7a on your Schedule B, Interest and Ordinary Dividends, which asks if you had “financial interest in or signature authority over a financial account (such as a bank account, securities account, or brokerage account) located in a foreign country.”
Oh @$#%! I’m in Big Trouble!
There’s good news for those who’ve either newly become aware of their delinquency or who’ve decided to come clean about their intentional evasion. Under the Offshore Voluntary Disclosure Initiative (OVDI), U.S. persons are given one last opportunity to comply with the law.
In exchange for their honesty, their maximum penalty is reduced to only 27.5% of the highest value of their accounts during the period of which they failed to report. In addition to paying the fines, they must also amend their federal income tax returns for the previous 8 years.
Note, the OVDI program is a voluntary one and is not an option for taxpayers who have already been contacted or are being investigated by the IRS. The process should only be attempted with the assistance of experienced legal counsel and should begin with a phone call to make sure no investigation is underway.
While this amnesty program could be a bit of a relief for some individuals, it’s no substitute for forthright and timely compliance with U.S. tax laws. Owning an offshore account can be of tremendous benefit to expats and investors. But it carries with it some hefty responsibilities.
Don’t find yourself on the wrong end of an IRS investigation. If you choose to take advantage of the opportunities associated with banking and investing overseas, make sure you dot your i’s and cross your t’s.
As comfortable in a dug out canoe as as a yacht, Josh’s adventures take him and his business partner into uncharted regions all over Central America.
Viva Tropical Radio is about the people, places and ideas discovered on those journeys.
On its surface the show is about the Latin Tropics, but Josh’s multitude of interests take the show much deeper.
From strange local myths and unique plants, to how to retire to the region. From offshore investment strategy to how to build a sailboat.
We welcome you to an eclectic mix of subjects as diverse as the region.
In the inaugural episode Josh has a discussion with Park Wilson about what you should know before you invest in Central America.
In this episode, Park and I discuss the following:
- Why Market Stages are a must understand when buying property in the tropics.
- How to approach different regions in Central America
- Common mistakes most folks make when buying real estate in Central America
- If you only have 72 hours to buy how you should prepare for quick trip.
And much more.
Listen to the show
You can listen to the show using the player above or grab it and listen on the go via one of the following options:
- Click here to download the mp3 | 72.6MB | 45:12
- Click here to subscribe via iTunes
- Click here for the RSS feed (non iTunes)
- Click here for the show archive
React to the Show
We appreciate your reaction to episodes of Viva Radio and feedback about how we’re doing.
Send us your thoughts any time in an email or comment below.
The Show Notes
- Market Stages Chart that Defines the Stages – by Viva Tropical
- Map of Market Stages in Panama – by Viva Tropical
- Understanding Market Stages: The Key to Profiting on Central American Real Estate – by Josh Linnes for Escape Artist
The Transcript
Transcript coming soon!