International Living - Moving Offshore

Introduction – This article is for those of you that are looking to being international living by moving to an offshore tax haven in Central America from North America, Europe, South Africa, New Zealand or Australia. Some of you will maintain more than one domicile, others will just land in one country. We will go through various topics that will be of interest to those of you seeking an international lifestyle. Just read on down and skip what is not of interest to you. Moving offshore can be more complicated than it sounds and it is important to pay attention to details.

Furniture – As a rule furniture in Central American countries costs much less than it will in your departure country, even as much as 75% less. If you have a lot of personal effects and clothes that you are bringing then you may want to bring your furniture to fill the container. Remember that in some of the more humid full tropical climates your furniture may go bad fast. Leather does poorly in these climates tending to accumulate mold and mildew fairly quickly. The seat cushion fillings may also get moldy fast and start to smell. In Panama there are termites and a lot of furniture is made out of wood resistant to termites and this is another concern that needs to be taken into account.

Clothes – Bring them. If a container is costly try bringing five or ten extra suitcases on the plane, which may only cost an extra $100 each. For $1000 extra you can bring a lot of clothes. Remember you are not going to need your cold weather clothes here but you may want such items with you for use while traveling back home or to other cold climates.

Cars – It is generally a bad idea to bring a car. Now you can put a car in a 40-foot container that is mostly filled with other household items like furniture dishes, clothes, appliances etc. What is done is they load the car last usually. They nail into the floor some two by fours in the shape of the letter L. This stops the car from moving towards the boards and then they use a nylon tie down to pull the car tight against the boards preventing the car from moving. You can load things inside the car. What is common is a flat bed tow truck pulls your car onto the bed. Then the bed is raised to the height of the container and the car is driven onto the container or the reverse to offload the car.

Be prepared for taxes on importing a car. A car from North America is going to have different parts than a Central American car and this needs to be considered as well. Sending parts in via Fed Ex can be very expensive. The smog on the car can be different and the workmen may have difficulty working on the car. Bodywork is way cheaper in this region, maybe 10% of North American prices. Mechanical work in a dealership is perhaps 65% of the North American rate but independent mechanics would be maybe 25% of the North American price. Parts can run all over the place depending on what quality parts you buy. Most of the new cars in this region are Japanese and Korean. The high-end German and Italian brands are here. Very few USA cars are sold in this region. In some countries the French and Italian cars are common, usually more so in South America. Gas prices tend to run about the North American price these days.

Books – If you are going to a very humid country like Panama your book collection will suffer with mildew. You may think about using a dehumidifier but be ready to empty it two or three times a day. You could get a small room and run the air conditioner on low all the time which should work pretty good and this could be combined with a dehumidifier for added effect. Expensive but should work.

Cooking Equipment – It is all available in the region and probably best bought here unless you are using a container and have excess available space then bring it. Remember to be prepared to pay tax on all. Since this stuff is going to be imported expect to pay non-discounted prices.

Firearms – Ok this is complicated. Many countries require permission to export the guns, please check. Many countries require permission to import the guns. Panama and Guatemala allow guns but require import papers before you bring them in. This generally requires some sort of long-term residency or citizenship prior to getting the import permissions. Not all guns are allowed in Panama. Centerfire rifles will be a problem n that they view these as being military weapons, yes even a 06 deer rifle with a bolt action. Guatemala is looser.

The USA has every country south of Texas listed on a black list so guns made by Smith and Wesson, Colt, Kahr, Ruger, Kimber are not going to be exported to these countries. The Glocks are the most common hi-end handgun and they will run $1300 and up each. You can get H&K, Sig Sauer and Berretta all from Europe but expect to pay around $1500 each. Exotic self-defense ammo is hard to find. Much of the ammo is junk ball (FMJ) ammo from Philippines or Argentina. Some hollow points can be found. Things like Ranger, Golden Saber, Cor-Bon are going to be very scarce. Shotguns are common and 12 ga 00 Buck can be found as can be found 0 buck.

Usually there are two kinds of permissions. One to keep gun in home and another to carry concealed. CCW permissions are usually easy to obtain. With CCW you need to not carry in bars, airports, schools, government offices and most of the prohibited places you are used to already from your home country.

Rent or Buy – Always best to rent first but easier said than done. Try using a suite hotel and staying in the city for a month or two to get a feel for the town, if you really like it and which neighborhoods you like best. Sign nothing regarding any real estate unless a lawyer has read the agreements first. Same for handing over any sort of payment.

Friends – Be advised that in any country there are going to some from your country that have been living in the country for years. They will be friendly and know the customs and language. They will be eager to help. They will know lawyers, real estate brokers, furniture stores, insurance sales people, travel agents, stockbrokers, bankers, etc. They will be only too happy to help you. Most genuine people that have gone through the expat experience know how hard the adjustment is and how time consuming it is. They also know how much time it can take to help others and will be very reluctant to get involved with you if they do not know you for many years prior.

After you have been in a country a few years you will be reluctant to befriend others too. It is a real energy drain. They need help with everything – translations, phones, cable, utilities, car, car insurance and registration, driver license, residency, home, furniture, etc. These helpful guys are doing it because they get kickbacks from everyplace and everyone they bring you to. This means you will pay more and how much more is something they frequently control. For example you buy car insurance that should run $1200 a year from a broker they referred you to who packs in $500 for the referrer. Your new friend tells you he pays $1700 and that is the going rate and you trust him and go for it.

The real money comes when you buy a car from their buddies and they get a nice fee and then there is the furniture and the real estate. These new friends have found a way to make a tax free living off of new expats and if they are good at hooking in new ones they can make $40,000 a year or more. These people see you as a piece of meat and will fleece you. They will get you into awful deals real estate and otherwise. They are like sharks swimming around looking for victim. So if some one is all of a sudden so helpful and friendly and they have been in the country a long time, the picture is not right and run away. Tell them you are not interested in making new friends until you know the lay of the land next year, get rid of them sooner than later, it is cheaper this way. They can even get kickbacks from doctors, dentists, optometrists, etc.

Also be aware that some people down here are running away from some thing or someone. Usually not major criminality. A criminal that is wanted will be wanting to set up a new identity and never be interested in meet new people and the chances of you meeting such a person is extremely rare. The people you would meet would be more likely to be running away from civil problems, divorce, bankruptcy and other obligations. They have problems that they have left behind. Sometimes a new start is a great idea and other times they repeat the same mistakes. So again be careful about all these new buddies you make. If you like to go to clubs and bars be extra careful about discussing your affairs especially financial, legal etc with anyone you meet in these places.

In this part of the world it is common to see someone date and even marry someone of the opposite sex that is two or three times older than them. Generally speaking the older person will have considerably more money than the younger person. It is extremely rare to see the younger person have more money than the older person. Enough said.

Transition Ease – Get an assistant for your first year or so in the country. They can be your driver too. We are not talking about a maid. They know where to get everything. They know where to shop and where not to go. You will be working on your new home for months until it is all set up. You assistant should be bi-lingual and can assist with the native language until you are up to speed. The assistant can show you ways to hire a maid or even find one for you.

Make sure the assistant does not do the price packing kickback scenario on you. Have the law firm warn them about this and incorporate it into the agreement with penalties if they get caught doing it. Panama is very different in this regard. They have had the Americans there for almost a century (Americans left in 2000). They are extremely proficient in kickbacks and all the merchants play ball with them. They do not consider the kickbacks to be stealing it is an accepted way of life and the ones that partake in this are not necessarily criminals. They expect this as a job benefit and will act cheated when they realize the game will not play with you. Just speaking Spanish and dealing directly with the merchant will of course stop this. Do all negotiations keeping the assistant away from any business transaction. They will tell the merchant in Spanish hey give me 10% or I will tell my boss your company cheated my old employer. In Panama this kickback scheme is a way of life so just insulate the driver out of it. Have him drop you off and go somewhere else. Give them no details as to what you are up to so they cannot contact the merchant when you are there. Be careful when people come to house to quote on things, again keep them away.

This is really a problem more in Panama than elsewhere. The labor code in Panama is also heavily tilted against the employer so there are very few companies setting up shop in Panama and hiring workers. It is almost impossible to win in a fight. Best is to have your lawyer draft all agreements and termination notices. The labor code is too complicated for this article.