Offshore Asset Protection BLOG - Bob Bauman

Offshore Freedom

Cabo San Lucas, Baja California Sur, Mexico: That's from whence I am reporting today, the second day of the four day Sovereign Society Offshore Advantage Seminar at the Westin Resort & Spa (below).

Located at the southern very tip of Mexico's Baja Peninsula, our resort hotel enjoys a dramatic site at Land's End, high above where the Sea of Cortes meets the Pacific Ocean. Looking out over the blue-green ocean in the late afternoon we have seen huge whales leisurely swimming along with schools of dolphins as escorts. Deep sea fishing is a major sport here. 

Los Cabos, as it is known, is unique in its impressive desert landscapes of pinks, reds and browns, its very dry climate, with endless cactus plants framed by cinnamon colored mountains, and bordered by miles of white sandy beach and clear, deep azure waters.

If I sound as if I am an impressed tourist, that's because I am. I have visited other Mexican resorts, Cancun, Puerto Vallarta and Acapulco, but Los Cabos exceeds them all in beauty and unspoiled grandeur.

So much for the location.

Here for Business

There are over four hundred people attending our seminar, including 330 attendees, plus professional speakers and staff. During four days the attendees learn from experts about every aspect of offshore activities -- banking, trusts, family foundations, foreign residence and second passports, investing, currencies and asset protection -- as well as how to comply with U.S. offshore tax and reporting laws.

While many of the attendees are U.S. persons, there are people here from as far away as Switzerland, Denmark, Germany, the Isle of Man, Panama, New Zealand, Australia, Hong Kong, Canada, Austria and many other nations.

Unusual Zeal

Professionals in attendance, attorneys, investment managers, bankers, foreign citizenship advisors -- all have remarked on the palpable air of concern and determination shown by all the attendees. I have seen and heard it in many conversations I have had.

These good people share my fear about what is happening to the United States -- Obama's march to socialized medicine, the ignoring of the Constitution by Congress and the executive, the piling up of trillions in deficit spending -- and these people are determined, for safety's sake, to place some of their assets offshore, if not themselves.

Unparalleled Concern

In the more than 10 years of the existence of the Sovereign Society I have never before seen people at our meetings as determined as these folks are to follow a course of action toward financial and personal safety -- and they mean to act now.

Yesterday the chairman of the Sovereign Society, Jack Pugsley, (left) and I both delivered addresses describing the perilous state of America and the world. Believe me the people here understand the threats to, not just their wealth, but more importantly, to their freedom and the futures of their children and grandchildren.

We made clear once again that we believe that…

• Individual liberty is a prerequisite to prosperity.
• Liberty exists when every individual has the right to keep, control and dispose of his or her justly-acquired property.
• Individuals and their assets are not the property of government.

You Can See & Hear It All

Now, in the past we've made audio recordings available for a fee. But this year, we're doing something completely different.
The management has decided to give you the valuable content of this seminar in Los Cabos FREE… not just for the 2009 Academy - but for every future event we hold.

I have summed up the details in this attached letter. Give it a look. That way, if you're interested, you can get a video/audio copy of all that occurs here at Los Cabos soon after the conclusion of the Offshore Advantage Academy.

More U.S. Wealthy Opt to Surrender Their Citizenship

That headline in The Wall Street Journal (17 Aug) over an article by David Bain, may have surprised some, but here at the Sovereign Society we've been observing this phenomenon ever since out founding in 1997.

Indeed, the growing trend of Americans voluntarily ending their status as U.S. citizens -- the only legal way by which they can escape U.S. taxes and government controls -- has reached a new peak and shows no signs of abating.

The Journal reporter saw this trend in part as being due to offshore tax havens having been forced to surrender to tax information transparency demands by the major high tax welfare states.

I think that misses the more fundamental causes as to why many more Americans, both wealthy and middle class, are handing in their U.S. passports and moving abroad. I'll explain in a moment.

Exit Price

As proof of the increased numbers of American expatriates, private client lawyers and relocation specialists report a surge in wealthy Americans already living abroad who are prepared to give up their citizenship to avoid the scrutiny of U.S. tax authorities.

(They may not realize that prior U.S. tax obligations do not end when citizenship ends, although future U.S. taxes can be avoided).

Interestingly, although such a move offshore means departing Americans may have to pay an exit tax that the Democrat Congress and George Bush imposed in 2008, lawyers say this is a price people have become more willing to pay this year, now that recession and decreased asset values has reduced the size of this onerous and unfair tax.

(For my explanation of the exit tax and to whom it applies, click here. You may also want to read The Expatriation Report which I also authored).

Cruising Mega-Yachts

Needing a colorful angle for his story, the WSJ's Bain conjured up a fanciful picture: "Many ultra-wealthy individuals who have chosen to become stateless now cruise outside coastal waters in their mega-yachts in the belief that if they stay on the move, tax authorities will not be able to catch up with them."

Bain continued: "One analyst who did not want to be named, has estimated the number of stateless tax evaders amounted to a few thousand. This implies the quantity of money outside the grasp of global tax authorities could be trillions of dollars."

Liberty a Major Concern

I advise and have discussed the issues with scores of Americans who are considering acquiring a second passport and citizenship, (an absolute necessity before giving up U.S. citizenship).

I can tell you that while some are motivated by taxes, most are fed up with stultifying controls and interference by government and by what they see as President Obama's radical socialization of a once great nation many no longer recognize as the country of their youth.

Numbers Game

Official figures on Americans who end citizenship are reported by the IRS every quarter. In the first half of 2009 only about 90 people gave up citizenship. But one prominent lawyer, who did not want to be named, said: "There has been for some time a view that the IRS has been under-reporting these numbers."

My friend, whom I have often quoted, John Gaver, who edits the conservative web site Action America looks at this from a different angle: "What these lists fail to show is the vast and increasing numbers of wealthy U.S. citizens who are just ‘dropping out’ – taking all of their wealth and leaving the U.S. without renouncing. They just disappear off the U.S. tax rolls and appear on some other country’s tax rolls."

Fear Factor

Anecdotal evidence also suggests there has been a surge of inquires from Americans who are considering acquiring citizenship of another country.

Our long time associate, Christian Kälin, managing partner and citizenship planning consultant at Henley & Partners in Zurich, said his firm has had a big rise in such inquiries.

In Chris’ opinion: "Tax reasons might be the biggest reason why U.S. citizens will want to drop their passports, but security issues will also influence their decisions. For example, we saw a huge surge in inquires from U.S. citizens contemplating acquiring an alternative passport after the Mumbai killings."

New Passport Book Edition

In my latest (7th) edition of The Passport Book, you can learn all about how Americans legally can escape U.S. taxes by expatriation, whether the U.S. exit tax applies to you, as well as the specific residence and citizenship requirements of nearly 100 countries worldwide that could be your new home place, whether you are American or any nationality. The book will be "hot off the presses" next week. Click here for more information and advance orders.

The Sovereign Society is the recognized voice in the complex offshore world.  Join the Sovereign Society and keep informed.

A Transformed Panama

I always enjoy my Panama travels, and the few days I spent there last week was no different. It's always good to see old friends and make new ones, and to gage the progress and growth this leading tax haven is making.

It is also good to know that the government of Panama is now under control of a new president, Ricardo Martinelli, (left) and his conservative Alliance Party in the National Assembly.

One change since may last visit in October 2008 is the massive redevelopment of the Panama City waterfront along Avenida Balboa, the major thoroughfare that crosses Panama City from its busy city center to the Casco Viejo, the oldest quarter that dates back to 1519.

On the Waterfront

In a period of less than a year the entire waterfront, formerly home to the worst traffic jams in the city, has been widened and improved with parks, recreation areas and parking, as well as 12 lanes of traffic where once there were only four. This massive project is called the Cinta Costera (coastal beltway) and stretches for about an impressive mile and a half.

This project literally gives Panama City's impressive skyline, dotted with scores of high rises, a highly complimentary Pacific Ocean front parkland and promenade that frames the down town in a dramatic way.

Highway, Canal Expansion

Equally impressive is the completion of the new multi-lane transcontinental highway linking Panama City on the Pacific with Colon on the Atlantic. This modern highway, built in parts over the last several years, replaces the old, narrow, winding two-lane road that was marked by treacherous curves and many accidents.

Along with the Panama Railway, travel from sea to sea can now be accomplished in about an hour, depending on traffic and the weather. (Panama's tropical rain storms can be fierce).

The other major project underway is the modernization of the Panama Canal, the first major overhaul and expansion since the U.S. built waterway opened in 1912. This $5.25 billion project, scheduled to open in 2014, will add a wider third lane to the ocean-linking waterway, doubling its vessel capacity and allowing for the first time transits by the world's largest cargo-carrying vessels.

A Gash in the Earth

"Under leaden skies, mammoth yellow vehicles prowl an enormous gash in the earth. Excavators, bulldozers and loaders relentlessly carve the rippled black and brown ground, reshaping nature's handiwork." That’s how an excellent and informative article in USA Today began last week, describing the Canal project.

When it opened in 1914, the canal revolutionized sea transport. For ships steaming between California and the East Coast of the U.S.A., the canal, linking the Caribbean Sea to the north with the Pacific Ocean to the south, turned a 15,000-mile journey around the tip southern tip of South America at Cape Horn into a relatively swift, 6,000-mile transcontinental jaunt.

Well before that, during the California Gold Rush of 1849, thousands of Americans trekked across Panama 's jungles on their way to the hunt for gold.

American Built

"The creation of the Panama Canal was far more than a vast, unprecedented feat of engineering...Apart from wars, it represented the largest, most costly single effort ever before mounted anywhere on earth," historian David McCullough wrote in his magisterial account of the canal, The Path Between the Seas.

The U.S. exclusively operated the canal and the surrounding Canal Zone as its own colonial fiefdom until 1977, when it agreed to return the area to Panamanian sovereignty. On New Year's Day 2000, Panama finally assumed full responsibility for canal operations, amid widespread American doubts about the abilities of local officials.

Another Panama Boon?

A recent Business Week headline reads: "Retirement: Why Panama is the new Florida" and continues, "Panama's quality health care, low costs, and proximity to the states are attracting American professionals as a retirement haven."

According to a report by the Migration Policy Institute, the number of Panama visas issued to U.S. citizens began to rise dramatically after 2003, and an estimated 25,000 U.S. expatriates live here today.

See Panama for Yourself

During my visit to Panama I witnessed a new wave of immigrants arriving in Panama -- exiles from Hugo Chavez' socialized Venezuelan police state, and North Americans seeking an escape from the recession. Panama City's condo and apartment supply is in major surplus and real bargains are available.

If you are interested in living or investing in Panama our associate, Opportunity Travel, will conduct a "Panama Profit Expedition," November 28-December 5, 2009. More information on this extensive tour of Panama is available here.

** To learn about the many offshore opportunities offered by the Republic of Panama, my book, Panama Money Secrets, is a helpful guide.

** The Sovereign Society is a recognized voice in the complex offshore world. Join the Sovereign Society and keep informed.

Haven Panama – With My Apologies

Earlier today (see below) I took to task one Frank De Lima, identified by Reuters as a "top economic adviser" to Panama’s president-elect, Ricardo Martinelli (left). My concern was a statement attributed to Sr. De Lima that: "The perception that Panama is a tax haven is totally false."

With my usual editorial restraint, I called Sr. de Lima’s statement stupid and false, suggesting he should be fired even before his job began, because he didn’t know a tax haven even when he was living in one.

Correction

Fortunately for the sake of truth and accuracy, our friend, Panama attorney, Rainelda Mata-Kelly, (left) and a member of the Sovereign Society Council of Experts, read my raving and quickly straightened me out.

She wrote: "The argument that Panama is not a tax haven is based on the fact that we do not discriminate between nationals and foreign residents. We tax everyone the same. Our territorial tax system, which was reluctantly recognized by the OECD as a valid tax system, only taxes income produced in the country and this applies to everyone, whether they are Panamanians or foreign residents doing business in Panama."

By that accurate definition, Panama is not a tax haven, rather a country with a territorial tax system that benefits those who wish to base their offshore business there and avoid taxes on that business.

Long History

Tax havens, suddenly in the news because of President Obama’s demagogic attacks and OECD blacklisting, have been around for a very long time.

In ancient Greece, some Greek islands were used by sea traders as places to stash their foreign shipments to avoid a 2% tax imposed by the city-state of Athens on imported goods. In the Middle Ages, Dutch traders in the Hanseatic League set up business in London where they were exempt from Netherlands taxes. Prior to the Revolution, smart American colonials traded through Caribbean ports to avoid onerous British taxes.

What Is a Tax Haven, Anyway?

I’m glad I asked that question. Let’s hope I can answer it satisfactorily.

Simply put, a "tax haven" is a jurisdiction where taxes are levied at a low rate or not at all. In that sense, the State of Florida, where I live, levies no income tax, so it is a tax haven.

Tax havens benefit individuals and businesses worldwide because they create tax competition among governments -- and that means choices and cost savings.

Avoidance, Not Evasion

Geoffrey Colin Powell, a former economic adviser to the tax haven Channel Island of Jersey, claims: "What identifies a tax haven is the existence of a composite tax structure established deliberately to take advantage of, and exploit, a worldwide demand for opportunities to engage in tax avoidance." (Keep in mind that tax avoidance is legal and smart. Tax evasion is illegal and dumb).

Some have suggested that any country that modifies its tax laws to attract foreign capital should be considered a tax haven. Others say the central feature is that tax haven laws can be used to evade or avoid foreign tax laws.

GAO Definition

In a 2008 report on the use of tax havens by American corporations, the U.S. Government Accountability Office never found a satisfactory definition of a tax haven but they suggested the following characteristics indicate a tax haven: 1) no or nominal taxes; 2) lack of effective exchange of tax information with foreign tax authorities; 3) lack of transparency in the operation of legislative, legal or administrative provisions; 4) no requirement for a substantive local presence; and, 5) self-promotion as an offshore financial center.

By some of these GAO standards, Panama might qualify be a tax haven.

Ring Fencing

What especially upset the anti-tax haven brains at the Paris mansion that houses the Organization for Economic and Community Development (OECD) was what they termed tax "ring fencing" -- meaning jurisdictions that offered favorable tax breaks to foreign companies and investors, but discriminated against locals by taxing domestic income.

Such two-tier tax systems have all but disappeared among smart tax havens who answered this complaint by abolishing all corporate taxes. Such zero tax regimes are now in place in the Isle of Man and the Channel Islands. By this measure Panama is not a tax haven.

OECD Nonsense

When the mighty G-20 met in London last month, these great statesmen, detached from reality, mounted their phony attacks on tax havens disregarding any of the definitions above.

For propaganda purposes, the G-20 leaders, (President Obama included), decided to define "tax haven" to suit their political and tax needs. Using taxspeak, it is what they say it is.

Thus tax haven now means any jurisdiction that does not automatically turn over to the U.S. IRS, or any foreign tax collectors, requested information concerning one of their citizens who dares to have an offshore bank account or to do business offshore – a nation’s bank secrecy and financial privacy laws, be damned.

Bottom Line

So now a "tax haven" is any place the tax hungry welfare states of the G-20 say it is.

But don’t let these left-wing tax hounds steal the right to define in this war of words.

You and I know that there are very strong moral, economic and political reasons for tax havens. Click on the preceding web link and Dan Mitchell of the Cato Institute will explain in even greater detail.

Thank you, Rainelda.

President Martinelli could use your talents in the new government. You made us realize that the Republic of Panama is, (and is not), a tax haven.

Either way, we still love Panama for no taxes, asset protection, maximum privacy and residence and citizenship for foreigners – and my apologies to Sr. De Lima.

Obama: Curbing American Freedom

"An unlimited power to tax involves, necessarily, the power to destroy."

So advised Daniel Webster, one of America's leading statesmen in the pre-Civil War era, a member of the House of Representatives from New Hampshire and a U.S. Senator from Massachusetts for more than 30 years -- and a presidential aspirant who never made it to the White House.

But an ambitious young politician who served only three years in the U.S. Senate representing Illinois, (most of the time campaigning for president), did make it to the White House. Now Americans are paying a huge price in our lost freedom.

Obama & the Tax Dodger

On Monday, in the Grand Foyer of the White House, President Obama stood grandly alongside his grand, tax-dodging Treasury Secretary, Timothy F. Geithner and for good measure, the Internal Revenue Service Commissioner, Douglas Shulman.

There the president spelled out his grand tax proposals to finance his more than grand trillion dollar deficit budgets.

Obama's remarks echoed the overblown sentiments he voiced repeatedly during the 2008 presidential campaign when he pledged to crack down on what he conveniently defines as "illegal overseas tax evasion."

He did not repeat his Joe the Plumber theme, that wealth needs to be taken from those who have it in order to spread it around to those Obama (and his re-election chances) favor -- but that was implicit in today’s message.

You'll Feel the Pain

If one ever needed proof of his radical intentions, Obama made clear his leftist goals, including milking American taxpayers, especially those he calls "rich", for all he can wring from them. For just the rest of 2009, the government needs to borrow about $2 trillion. Long term Obama needs trillions more to finance his comprehensive program transplanting European-style socialism to America.

That includes government-run health uncare, federal control of education, handing over faltering auto companies to unions, selectively bailing out his Wall Street campaign contributors and buddies, nationalizing banks, confiscating private pension funds and stimulus for all.

Ignoring the need for true reform of the U.S. Internal Revenue Code, Obama claimed ominously that today was just his first step in a much broader effort to fix a "broken tax system."

Rahm Emanuel, the White House chief of staff, summed up Obama's goal: "Never let a serious crisis go to waste." Thus the president is using the recession as an excuse for big government ambitions that liberals have failed to achieve for decades.

Tax Havens: Obama's Phony Bogeymen

Mr. Obama said he is seeking to crack down on overseas tax havens in an attempt to "close the international tax gap," meaning he (and the IRS) want to end legitimate tax competition from low tax offshore jurisdictions. If you can't compete, destroy the competition.

At the White House Sec. Geithner noted that the G-20 group of high tax welfare countries had agreed to act against tax havens. "For years, we've talked about shutting down overseas tax havens," Obama said as he made a presumptuous and patently erroneous claim: "That's what our budget will finally do." (As if the president has some magical power, short of military action, to force independent nations to change their laws to satisfy his bloated budget needs).

Screw U.S. Corporations and Consumers

American businesses pay one of the highest corporate taxes in the world at 35% of profits, (closer to 40% when other fees and state taxes are included). But while corporations do pay taxes, every penny of those taxes is passed on to American consumers in higher prices for the goods and services corporations provide.

At a time when business needs money to preserve and provide American jobs, Obama proposes to abolish existing tax breaks and tax deferrals for corporate offshore activity and to tax at the 35% rate, all U.S. corporate foreign business as if conducted within the U.S. For a better understanding of why Obama’s plan is so damaging to the U.S. economy, I commend you to the views on this subject of my colleague, Mark Nestmann.

Biased and Prejudiced

Americans who have offshore bank accounts, investments and other financial activity are, for the moment, still legal under U.S. laws.

But Obama's tax plans announced today echo the traditional IRS and U.S. Justice Department attitude that assumes any offshore financial activity by a U.S. person probably is illegal, illicit or both. The president displays a virulent prejudice against "offshore" that he apparently he thinks is good politics.

In a way, Obama is heeding the philosophy of his fellow Chicagoan, Al Capone who said: "They can't collect legal taxes from illegal money." Obama's tax plans do everything short of making it a federal crime for hitherto innocent Americans to bank, invest or to do business offshore.

Read at your leisure the full text of Obama's press release describing the horrors he has in store for Americans who dare to go offshore financially, especially the section entitled "Getting Tough on Overseas Tax Havens."

Guilty Until You Prove Your Innocence

But one important point really should upset intelligent citizens -- Obama proposes to repeal the traditional, time honored legal presumption of innocence, specifically for those doing business offshore.

Instead, his proposes to make Americans who go offshore prove to the IRS, upon demand, that they are not engaged in tax evasion or any other crime. The White House said today: "These presumptions will make it easier for the IRS to demand information and pursue cases against international tax evaders. This shifting of legal presumptions is a key component of the anti-tax haven legislation long championed by Senator Carl Levin."

Indeed, many of Obama's proposals were taken right out of the Levin-Obama Anti-Tax Haven legislation they first introduced in 2005, although Levin’s legislative tax haven black lists mercifully have been dropped.

Coercion & Criminalization

Other provisions in the Obama anti-offshore plans:

* Using the current "Qualified Intermediary" system under which the IRS decides which offshore banks are acceptable to them, foreign banks will be forced to disclose any and all information the IRS demands, under the implied threat of being cut off from the U.S. banking system. In theory, QIs offshore banks would be required to report information on their U.S. customers to the same extent that domestic U.S. financial intermediaries must. All this it seems, without regard to the bank secrecy or other financial privacy laws that apply in the foreign country.

* U.S. investors who fail to report offshore investments now face penalties limited to 20% of the amount of the understatement. The statute of limitations for enforcement is typically three years. The penalty will be upped to 30% and the statute extended to six years. The plan will double certain other penalties when a taxpayer fails to disclose foreign financial accounts.

*  The Treasury Department will be given authority to issue expanded regulations on offshore financial institutions under the QI program.

*  The IRS will hire 800 new employees devoted specifically to international enforcement, including agents, economists, lawyers and specialists, supposedly increasing the IRS ability to crack down on offshore tax avoidance and evasion, including transfer pricing, financial products such as abusive trusts, and transactions such as purported securities loans.

What's Next Offshore

In coming days I'll have more to say about the impact of this blatant attack on Americans who dare to do business offshore. The ritual truism is that if you comply with the law, you will have no problems. But who knows what compliance with this morass of new rules will require, both in legal advice and fulfillment costs?

One thing is certain. This will accelerate a trend already well underway -- more offshore banks, unwilling to become IRS vassals, will reject new American clients and terminate some of those who are current clients. (If you need an offshore bank, we can help you.)

Unintended Consequences

Oddly enough, Obama's radical political crusade against tax havens could produce unintended effects he and the IRS wont like.

Fact is there remain very important and useful roles for offshore financial activity by Americans -- much stronger asset protection, better investment possibilities, real, though now more tempered, financial privacy, tax deferred life insurance and annuities, offshore residence and second citizenship -- all providing physical and geographic distance between Obama's tax police and your assets.

U.S. persons who have bank accounts or who are active in established offshore tax havens, such as Switzerland or Panama, or those planning future activity, probably will not suffer from Obama's and the OECD's political attacks, as long as they follow the law.

Tax Havens Will Survive

Thankfully, U.S. presidents serve four year terms. Some tax havens have been around for centuries

The history of the last ten years of anti-tax haven attacks has been marked by a welcome general offshore clean up and impressive tightening of offshore laws and rules.

The thrust of Obama's radical legislative proposals and the OECD's plans is curbing tax evasion. He and they have no real power to eliminate the tax advantages of independent offshore jurisdictions.

The general move toward greater scrutiny of tax havens undoubtedly will give pause to some, but it is unlikely to discourage those intelligent enough to understand and employ offshore's real advantages.

With our respected council of advisors, offshore professionals, books, special reports, newsletters and conferences, the Sovereign Society will keep you posted and tell you how to "go offshore" -- strictly within the ever changing law.

** Read about the many offshore opportunities in my best-selling book, Where To Stash Your Cash: Tax Havens of the World.

** The Sovereign Society is a recognized voice in the complex offshore world. Join the Sovereign Society and keep informed.

Your Papers, Please!

A visa is an official permission authorizing a person to enter the foreign country that issues the visa. A visa authorization may be a document, but usually it’s a stamp endorsed inside a person's official passport.

For many countries, the rule is -- no visa, no entry.

Some countries makes it difficult, if not impossible, for foreigners to enter, even for legitimate purposes. That accusation has been raised about the entry policies of the United States government that control who, when, and how foreigners may come to America.

Since the terrorist attacks of September 11, 2001, U.S. entry restrictions have become so severe, many say unreasonable, that hundreds of thousands of foreigners have been excluded or have just given up trying.

This has caused major economic loss, as business people refuse to suffer less than friendly treatment at U.S. airports and reroute their travel to avoid changing planes in American cities.

Thousands of foreign students have stopped applying for admission to American colleges and universities because of the time and red tape required to be admitted to the country, thus losing a chance to train a friendly needed group of future leaders whose knowledge of America will be limited.

Keeping Out the Unwanted?

It's a fact of international political life that citizens of certain countries, the U.S. among them, find travel abroad more difficult. For many reasons, some countries impose strict visa requirements on foreign nationals. It’s their way of keeping out supposed "undesirables."

In the wake of the 9-11 terror attacks, the United States greatly increased visa requirement for visitors from nations previously free to come to America without first obtaining a visa. Other nations have adopted similar post-9-11 visa restrictions where none existed before.

The U.S. already was one of the most restrictive countries in the world when it came to allowing visitors into the country, but the visa waiver program started in 1986 does allow the citizens of 27 selected countries to enter for stays of up to three months without a visa.

Official Red Tape

For American travelers headed overseas, getting a visa, when required, can be the worst part of the trip. It requires contacting a foreign embassy or consulate in the U.S. filling out forms, surrendering your passport for days or a week and paying a high fee, sometimes only with cash or a money order.

For a multi-country trip the time to get all the visas approved can take a month. It was that way decades ago, and even with the rise in global travel and online tools, that primitive system still exists today. When I visited China a few years ago it took me two weeks to get the visa, and I had to pay a visa expediting company to do it for me.

Visas Information Sources

Henley & Partners, a Zurich firm with which the Sovereign Society has worked for several years, specializes in international immigration, residence and citizenship law. On a continuing basis they analyze the visa regulations of almost all countries and territories in the world. They have just published their latest visa index and I think you may find it useful.

KLM Royal Dutch Airlines also has an excellent web site that allows you to cross check your home country with any other country in the world in order to determine if you need a visa for travel there.

The Passport Book

If you are interested in the possibility of dual citizenship, second passports and visa free travel, the 6th edition of The Passport Book which I authored is available.

In it I explain all about visas, plus how changing your country of residence, acquiring dual citizenship and a second passport can open up a world of opportunities. I show you how to obtain dual citizenship based on your ancestors, how to travel with greater safety, possible offshore tax savings and I may help you discover your own offshore paradise.

Click here for more about The Passport Book.

Carrying Several Passports? It’s Not Just for Spies

The New York Times traditionally has fancied itself as "the nation's newspaper of record," looking down its editorial nose at lesser journals.

But in recent times, the objectivity, relevance and indeed, the very existence of this leading left-slanted publication, ("All the news that fits we print"), has been called into serious question.

A few weeks back it was announced that The Times was mortgaging its New York City headquarters building to get $250 million it needed for operating capital. Only yesterday a Times business section article detailed a deal made with the reputed world's fourth richest man, multi-billionaire Mexico's Carlos Slim Helú, to put another $250 million into newspaper, making him the eventual largest stockholder. (When can we expect a daily edition in Spanish?)

All of which is my irreverent preface to that old adage that occasionally: "Even a blind pig can root up a truffle." With the price of truffles per pound exceeding that of gold, there's some value to the article The Times published yesterday about -- of all things -- the utility and increasing ubiquity of dual passports for Americans.

Increasingly Popular: Second Passports

Yes, I know -- since our founding over a decade ago, the Sovereign Society, (and yours truly), have been touting the attractiveness of dual citizenship and holding second (even third) passports.

Most of The Times article could have been lifted from my best-selling work, The Passport Book, to wit: "Dual passports are no longer the sole province of people who grew up in more than one country. Millions of American citizens potentially qualify for various reasons — ethnic heritage, religion, country of birth or where their spouse was born."

The article cited an Argentinean with an Italian passport who, last year, added an American one; a U.S.-Bulgarian who works in Warsaw and is thus able to roam the European Union without a visa; a dual U.S. -New Zealand citizen who travels frequently throughout Southeast Asia; even a dual Austrian-Turkish citizen who lives in Germany and avoids automatic suspicion when flying around the EU by not using his Turkish passport..

Added Safety in Dangerous Times

In The Passport Book, among the reasons I cite for a the need of second passport, one has risen to the top of the list -- personal safety.

I recount the tragic death of my constituent, (I was then a member of the U.S. House of Representatives), U.S. Navy Petty Officer Stethem, a victim of the 1985 terrorist hijacking over Greece of Trans World Airlines Flight 847, carrying 153 people as it flew from Athens to Rome. The young sailor was returning from an assignment in Nea Makri, Greece.

Over several days, the terrorists, later identified as Iranian Shiite Muslims based in Syria, forced the Boeing 727 to Beirut, then to Algiers, back to Beirut and again to Algiers. Groups of passengers were released during the initial stops.

The dozen terrorists threatened to blow up the airplane if anyone approached it on the tarmac. The terrorists systematically forced all passengers to show their passports, targeting U.S. and Israeli citizens for special, unwanted attention.

During a violent rampage, they beat Robert Stethem to death. Although in civilian clothes, Petty Officer Stethem was singled out from the passengers as a U.S. Navy sailor and American citizen, and killed when terrorist demands were not met.

It is hardly coincidental that, 23 years later, in the terrorist attacks last November in Mumbai, the terrorists specifically sought out American and British passport holders, releasing some tourists with other passports, then killing Yanks and Brits.

How About You?

"The fact is people don’t think about it until it is pointed out to them," The Times quotes Jan Dvorak, president of Travisa, a passport services company in Washington, D.C. Some Americans, he said, "don’t realize that they actually have dual nationality."

Under U.S. law, a second passport does not jeopardize American citizenship. However, U.S. citizens, including dual nationals, must by law use their U.S. passport to enter and leave the United States.

As I point out in The Passport Book, hundreds of thousands, perhaps millions, of U.S. citizens now also have automatic Mexican citizenship, either as former Mexico resident naturalized in the U.S., or as their descendants. Dual citizenship based on parents or grandparents also is available from Ireland, Italy, Poland, Lithuania, and with some qualifications, the United Kingdom, Spain and Israel.

Savvy Travelers

While there are no hard numbers, more Americans seem to be trying to qualify for additional passports. "Savvy travelers and business travelers want to make sure they have two passports based on nationality because there are certain advantages," Mr. Dvorak said.

Among those is the ability to work without restriction in various countries, particularly with passports from the 27 EU countries. Mr. Dvorak noted it’s "a way of hiding where one has been," when traveling among countries with soured relations.

The Passport Book

The 450 pages of the best-selling Passport Book include, among many other things, all you need to know about: 1) establishing a foreign residence; 2) obtaining a second passport; 3) facts and citizenship laws of nearly 100 countries, including what it means for Americans who are dual nationals. Click here for more information.

Universal Declaration of Human Rights 60th Anniversary

Today, December 10th, marks the 60th anniversary of the adoption in 1948 of the United Nations' Universal Declaration of Human Rights.

Spearheaded by former U.S. First Lady and U.N. delegate, Eleanor Roosevelt, the widow of President Franklin Delano Roosevelt, the UDHR guaranteed the political and civic rights of all people in the world, including the right to freedom from torture, slavery, poverty, homelessness and other forms of oppression.

Most people assume today that the guarantee of human rights is an essential feature of all civilized societies. But the UDHR was a product of a unique historical moment. It came out of the horrors of World War II, the Great Depression and the horrors of the Holocaust that made the world realize that something had to be said about basic human rights.

The newly created U.N. General Assembly ultimately passed the UDHR by 48-0 vote, but a huge diplomatic effort was required to get disparate nations to agree on exactly what "human rights" are or should be. Communist countries proffered one view, while democratic countries had their own perspective.

Freedom of Movement

On the subject of the right of persons to travel freely, the United Nations Universal Declaration of Human Rights is clear, stating:

Article 13 – Everyone has the right to a nationality. No one shall be arbitrarily deprived of his nationality nor denied the right to change his nationality.

Article 15 - Everyone has the right to freedom of movement and residence within the borders of each state. Everyone has the right to leave any country, including his own, and to return to his country.

It is not too cynical to say that governments have paid lip service to the UDHR, but then done as they please in violation of the document's terms.

These so-called "rights" of free movement, travel and residence have been, and are violated by almost every nation, including both dictatorships and democracies. The United States and the United Kingdom, along with the former and present governments of Russia, have been among the violators when it has suited their political convenience at the moment.

Need for a Second Passport

In these days of anti-terrorism as an official excuse for ever more restrictive travel policies adopted by governments, obtaining and using an official second passport should be a real consideration for prudent persons.

Holding a second citizenship and a passport issued by a small, peaceful, non-controversial country can save your life when traveling in times of political unrest, civil war, and in other delicate situations abroad. For good reasons, countless thousands of international businessmen, and others, active world wide consider an alternative passport as good life insurance.

Under U.S. law there is no need to surrender or change your present nationality while you enjoy the benefits of a second passport. Alternative citizenship is also increasingly important as a powerful tool for truly international tax planning. As a national of two different countries, you also can enjoy extra privacy in your banking and investment activities.

Government Threats

An even more immediate threat can arise from your own government.

Depending on your nation’s policies, your government may use your passport to restrict your UDHR-guaranteed basic human right to travel, rather than to guarantee it. Use of your passport can be made contingent on payment of taxes, however unreasonable, and on reporting of worldwide income and assets. Issuance of your passport allows your government to control, restrict, monitor, and record your travels.

So you can see why a second passport might be very useful. Your qualification for a second nation’s passport, one that comes with no restrictive strings attached, can serve as your passport to increased freedom of movement, expanded international investment, greater flexibility, and adventure.

The Passport Book

One of my most popular books has been The Passport Book, (The Complete Guide to Offshore Residency, Dual Citizenships & Second Passports), first published almost a decade ago and now in its 6th edition.

This book explains in detail how you can establish immediate residence in any one of nearly 100 countries and how to achieve eventual citizenship, in some cases based on the place of birth of your ancestors, such as Ireland, Italy or Poland. I also explain how two countries grant immediate citizenship and several nations welcome foreigners with discount prices and tax breaks. There’s lots more information here.

Dual Citizenship: Time to Consider

There's a new United States "citizenship test" and it focuses on the concept of democracy.

Any non-citizen submitting a U.S. citizenship application on or after October 1, 2008 will have to know the answers questions such as: "What are two ways that Americans can participate in their democracy?"

"What does the Constitution do?" Applicants for naturalization as new citizens will be quizzed on any 10 of the 100 and must correctly answer at least six. We're told that CIS bureaucrats revamped the test to emphasize understanding of American democracy concepts, rather than rote memorization of facts about history and government.

Citizenship

It's not something most of us think about much, but let’s examine the elements of citizenship and also the meaning of having a passport (Less than 30% of Americans do have passports, a fairly low number). Citizenship can be loosely defined as the legal relationship between an individual and the sovereign nation in which he or she lives. That status is defined by the law of each nation, conferring or limiting a person’s duties and rights. Citizenship usually can be acquired most simply by birth in a specific nation, or from one's parent(s). Only through the formal process of citizenship acquisition, called naturalization, can one legally acquire the right to a second or alternative citizenship.

Second Passports

The English political philosopher Edmund Burke (1729-97) observed in another time: "Early and provident fear is the mother of safety." His words of caution are still good advice for world travelers today. Safety means travel using a national passport that keeps the bearer as far away as possible from controversy. This can be a hard thing to achieve with a U.S. passport.

Travel in the Middle East, the Balkans, parts of Russia or Asia using a U.S. passport may mean you're a target for terrorism. But there are even more attractive reasons to obtain a second passport. Holding a passport from any of the 27 European Union nations gives you the valuable right to live, work and do business in every one of those EU nations.

Second passports can be obtained as a matter of right based on ancestors born in nations such as Ireland, Italy, Poland or even the United Kingdom. If you can afford it, economic citizenship can be obtained at a price from the few nations that still sell these; Dominica and St. Kitts and Nevis.

There's no need to surrender your current U.S. passport if you do acquire a second passport. U.S. law supports the right of Americans to enjoy dual citizenship. The Sovereign Society offers advice on second passports for its members.

In an unsettled world, acquiring a second citizenship is a wise decision; an investment in your future. Your second citizenship will last a lifetime, and that protective shield can be extended to your spouse and children as well.

Opposing Trends

Today, the world’s passport requirements are moving in opposite directions. Some are becoming more liberal and others more rigorous. With the advent of the European Union, national borders of 27 nations have fallen. Over 400 million people within the EU are able to travel freely without having to show individual national passports.

On the other hand, the 9/11 attacks have caused the U.S. government – and many other nations – to tighten formerly easy visa rules for foreign visitors. Eventually most visitors to America will be forced to have digital, biometric passports with detailed personal and physical information readable by computers. The EU and the UK are adopting similar passport standards.

Another restrictive development is the denial of passports for a host of civil and other wrongs. In the U.S. any parent in arrears for $2500 or more in child support loses his or her passport. Then too, the U.S. government keeps a computerized record of every exit and entry a US passport holder makes, together with the nations visited.

All of which commends the possibility that you should consider obtaining a second passport from another nation. We can tell you how – and it's fully legal.

* For my own estimate of second passports from many nations, see my latest version of The Passport Book, or explore legal tax-saving possibilities offshore in one of my best-selling books, Where to Stash Your Cash Legally: Tax Havens of the World.