Tag Archive | "Liechtenstein"

Ecuador Capital Gains Tax


Ecuador Capital Gains Tax

Ecuador capital gains tax is not due on occasional property sale profits.

This is another Ecuador earning idea… fixing up properties… like this.

This can be profitable. Plus these profits can be tax efficient as well.

In Ecuador there is no capital gains tax on the occasional sale of real estate… so you can take a property like this…

Cotacachi condos

fix it t look like this…

Cotacachi-condos

and sell it without incurring income or tax tax liability in Ecuador.

You may still incur tax liability in your country of residence or citizenship. For example if you are a US citizen you may have US capital gains or Alternative Minimum Tax liability.

This is why it is of utmost importance that you consult a tax attorney on such matters.

In fact it now more important than ever to have legal advice (US citizens at least) when you bank and do business abroad.

For year’s we have advised readers of the advantages of investing, business opportunity and banking opportunities abroad.

The main benefit is greater opportunity.  This is the era of the global economy and those who invest globally have the greatest opportunity. This is the story we have been preaching for 41 years this May.

For example right now the US property market is quite slow. Ecuador’s market is strong.

Banking abroad provides access to more experienced global investment knowledge and the ability to execute global investments and business more efficiently.

Another benefit is added asset protection.

I regularly get notes like this from readers who are professionals and in business…

“Gary, I continue to be bothered by an unjust lawsuit that is actually  extortion.  The legal fees are crazy. Such is the legal system now that even when you are totally innocent, you lose even if you win.”

When you invest and do business globally, assets held correctly abroad are safer from seizure via civil action.

However, we have also continually warned of the great risk of doing global investing and business  without good legal advice. Monday’s message looked at the importance of making sure that you use overseas banks in the correct way.

An excerpt from a recent article in the Financial Times entitled “Swiss agree to relax bank secrecy rules” points out the importance of this advice.

The article says:

BERNE, March 13 – Switzerland agreed on Friday to relax its strict bank secrecy rules and co-operate more on tax evasion in a last-ditch attempt to fend off a global crackdown on tax havens that is rattling the offshore banking industry.

In a landmark statement, the Swiss government said it would embrace standards for tax cooperation and exchange of information set by the Organisation for Economic Cooperation and Development, meaning more information on suspected tax evaders will be shared with other countries.

”Banking secrecy does not protect tax crimes. International cooperation on taxes has become more important given the globalisation of financial markets and in particular against the background of the financial crisis,” Swiss president and finance minister Hans-Rudolf Merz told a news conference.

A decision on Thursday by tiny offshore rivals Liechtenstein and Andorra to adopt more tax co-operation has put even more pressure on Berne.

It comes on the heels of moves by other centres, including Singapore, Hong Kong, Jersey and the Isle of Man, to open up.”

An article in the New York Times outlines the focus importance that taxing authorities have placed on tax havens.  The article was about how US President Barrack Obama acted as a mediator during a recent tense meeting between The French President Sarkozy and Chinese President Hu who were arguing about tax havens during the Group of 20 meetings.

The article said:

“Mr. Sarkozy wanted the big communiqué produced by the Group of 20 to endorse naming and shaming global tax havens, maybe even including Hong Kong and Macao, which are under China’s sovereignty. Unsurprisingly, Mr. Hu was having none of it. He appeared angry that Mr. Sarkozy was effectively accusing China of lax regulation, and that the French leader was asking China to endorse sanctions issued by the Organization for Economic Cooperation and Development, a club of wealthy nations that Beijing has yet to join.

According to accounts provided by White House officials and corroborated by European and other officials also in the room, Mr. Obama escorted both men, one at a time, to a corner of the room, to judge the dispute. How about replacing the word “recognize,” Mr. Obama suggested, with the word “note?”

The result: “The era of banking secrecy is over,” the final communiqué said. “We note that the O.E.C.D. has today published a list of countries assessed by the Global Forum against the international standard for exchange of tax information.” Hong Kong and Macao did not appear on the list.

In other words, be global by all means… but make sure you have a local attorney who helps you do everything legally and correct.

The attorney I use is Joe Cox.  You can reach Joe at jcox@coxnici.com.

Learn more about Joe Cox here.

Back to the fixer uppers.

If a person spends time in Ecuador  and stays alert, they’ll see many incredible fixer upper bargains.

Just over a year ago, Merri and I bought the four story office building shown above.   We began cleaning it up an converting two floors into condos.

I could sell these for double what I paid… and still have the two downstairs floors… though they are not for sale.

Construction costs are low. Local craftsmen are handy.  They’ll do things you ask.  So we can afford to use great tiles in the kitchen but keep costs down.

This was the third floor… the kitchen especially…

was a mess.

Here is the third floor now.

ecuador-banks

This if fully furnished with…

ecuador-banks

one bedroom and …

ecuador-banks

office/den (or second bedroom)  and…

ecuador-banks

balcony.   The kitchen now…

ecuador-banks

looks great.  The hardwood cabinets had not been installed when I took this shot.

This was the 4th floor, before…

now let’s head up the stairs and see  it after.

ecuador-banks

This is a loft studio with…

ecuador-banks

great light and an open feel with…

ecuador-banks

full dining area and…

ecuador-banks

kitchen.

ecuador-banks

These floors are among the highest points in the village and views from both units are the best around.  Morning’s give…

the sunrise over Mt. Imbabura.

ecuador-banks

Evenings offer sunset in the east on Mt. Cotacachi.

ecuador-banks

Views are great at night with the village alight.

ecuador-banks

and you can see the entire village…

ecuador-banks

and both mountains during the day.

Where we had huge walls we said…”How about windows with a view?”.   The builder  figured out what height was needed to see Mt. Cotacachi and simply knocked the window openings in the walls. Then he built hardwood window surrounds that frame this view.

ecuador-banks

The bathroom includes a full tiled bathtub and spa shower like this.

ecuador-hotel-savings

The king size sleeping nook has this view also and is fully curtained…

ecuador-banks

with full hardwood closets.

ecuador-banks

These units are available for rental on a three, six or 12 month lease by the way.

Fixing up has property provided Merri and me with sopme nice extra profit… that is totally tax free in Ecuador. Though our last Ecuador fixer upper profits did create some US tax liability.

In these times of change the best ways to gain opportunity are with real estate, commodities, stocks and your own business.  For those who want to live full or part time in Ecuador and earn extra tax efficient profits, that avoid Ecuador capital gains, consider buying and fixing up Ecuador property.

Gary

Join us in Ecuador.

Ecuador Coastal Real Estate Tour May 16-17. $499 Enroll here.   $749 For a couple.

Imbabura-Cotacachi Real Estate Tour May 20-21.  $499 Enroll here.  $749 For a couple.

Ecuador Amazon Herbal Tour May 22-24.  $399 Enroll here. $499 For a couple.

Take Two for One. Attend any of the three international business & investing courses below and select any one of the tours above free.

July 24-26 IBEZ North Carolina + Tangled Web

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Nov. 6-8  IBEZ Cotacachi + Tangled Web

Sign up for our three May 2009 tours and attend any of the IBEZ Cotacachi + Tangled Web seminar above FREE.

Attend any two Ecuador courses or tours in a calendar month…$949 for one.  $1,349 for two.

Attend any three Ecuador courses or tours in a calendar month…$1,199 for one.  $1,799 for two.

Learn about our July 2009 Ecuador export tour 2-4-1 deal here.

See our full 2009 schedule here.


Multi Currency Problems & Solutions


Multi currency investing becomes increasingly harder as increasing numbers of banks abroad refuse to accept US customers. A recent message at this site shared how the large Dutch Bank, ABN Amro, stopped accepting US customers and gave existing US clients 30 days to liquidate their securities.  If you missed this see Multi Currency Investments Easier

multi-currency-meeting-in-autumn

See below how autumnal colors can help you solve multi currency problems.

Now another large Swiss bank has found it too much to deal with aggressive US regulatory tactics and shut down its US business. Here is what a recent Financial Times article entitled “UBS tells unit staff to avoid US visits” by Haig Simonian says:

“UBS has told members of its former private banking team responsible for rich US clients not to travel to America.  The Swiss bank has also made lawyers available to the more than 50 bankers involved, many of whom have left UBS since it decided last November to wind down its cross-border private banking business for US ­customers.  The move follows the recent indictment of one of the unit’s former senior executives, Bradley Birkenfeld, who US authorities have accused of helping a billionaire client evade taxes. Mr Birkenfeld has pleaded not guilty and his lawyers have made no public statement on the matter.”

I am very pleased that Jyske Bank, my banker for about 25 years has decided to stand by its American customers. The bank created a wholly owned subsidiary Jyske Global Asset Management (JGAM) that is registered with the SEC.

The changes, however, create many questions which I would like to answer at this site. Please send your questions.

As a financial publisher, I cannot give independent advice.  I cannot even give you a personal reply nor comment on your specific personal investments or portfolio.  I can, however, answer your questions here in a general way.

Here is the first question received.

JYSKE BANK QUESTION

“What is going on with Jyske Bank and their JGAM program which will make it more difficult to do multi currency sandwiches unless one has invested at least 1 million with the bank.  As I understand it, my portfolio will be managed without my input which does not make me feel comfortable.  What is your take on this?”

JYSKE BANK ANSWER

I have spent hours reviewing how JGAM will work with Thomas Fischer.

First, let me clarify several points…the first being that only Americans will use JGAM.  For non Americans it is business as usual at Jyske.  This will have a pretty big impact on my business since I have so many non US readers.  Our site ranks well for visits in Ecuador, Canada, China, Germany, New Zealand, Singapore, United Kingdom and Mexico as well as the USA.

This means I’ll have to write everything twice once for us Yanks and once for the rest of the world.

Second, minimums have not changed at all.  For some time the minimum has been $50,000 to open and account and $100,000 is minimum for a multi currency sandwich…not 1 million.

Though JGAM will manage each portfolio on a discretionary basis, the client still has a great deal of input on how they will manage each account.

Jyske has a number of portfolios ranging from low risk – medium risk – high risk and speculative.

These portfolios are then again split into portfolios with and without US securities.

Then the accounts are again split  based on assets under management.

For example, clients with less than $200,000 will have a different diversification than larger accounts.

Every portfolio is monitored and tracked on an individual basis.  There is no specific JGAM portfolio so all investors will have their own regular performance up-date.

The JGAM investment committee will meet once a month deciding on the tactical weight of the asset classes and the underlying investments.

When a client joins, the Jyske account manager will work first to help the client decide on a risk profile. Once this is decided, Jyske will be invested in one of the 16 options above.   Every investor’s portfolio will be designed and will change according to the time of entering the portfolio.

Here are the latest recommendations as of late May 2008 of the speculative NON US dollar portfolio.

Asset type                Recommendation       Tactical weight
Fixed Income                  Underweight                  20
Equities                           Neutral                          60
Alternatives                     Overweight                    20

Cash                                Neutral                            0
Investment                               %
Asset type

FIXED INCOME
USD       7.2% Porsche 01.02.2049                         3%
USD       7.875% Turanalem 02.06.2010                 2%
USD       8.5%  Titan Petrochemicals 18.03.2012    1%
EUR       Var% Bombardier 15.11.2013                     3%
GBP       8.7% Cable & Wireless 06.08.2012             1%
AUD       5.5% Rabobank 27.01.2010                       3%
BRL       12.5% Brazil 15.01.2016                              2%
HUF       6.75% Hungary 12.10.2010                        2%
TRY       15% Intl. Bank Recon 15.07.2009                2%
ISK         8.5% Rikisbref 12.06.2009                         1%
Subtotal                                                                  20%

EQUITIES
CHF                   Novartis                                      4.2%
EUR                   Siemens AG                                 4.2%
EUR                   Adidas AG                                   4.2%
DKK                   Carlsberg A/S                             4.2%
EUR                   EDF Energies Nouvelle                4.2%
DKK                   NKT Holding                               4.2%
DKK                   Neurosearch                               4.2%
EUR                   Bayer AG                                     4.2%
EUR                   L’Oreal                                        4.2%
SEK                    Hennes & Mauritz AB                  4.2%
Latin Equities Mutual Fund       4.0%
Chinese Equities Fund              4.0%
Indian Equities Fund                 4.0%
European Equities Fund             5.0%
Subtotal                                                              60.0%

ALTERNATIVES
USD                    ETFS Crude Oil – CRUD LN         10.0%
USD                    ETFS Aluminium l ALUM LN          5.0%
USD      ETFS Metal Secs Phys. Gold – PHAU LN       5.0%
Subtotal                                                                 20.0%

CASH                                                                       0
TOTAL                                                                 100.0%

This looks like an interesting portfolio, and in future messages we’ll be looking at
the equities in this portfolio.  Plus we will review the other three (high medium and low risk) portfolios.

I believe that Multi currency investing is a must in these times of inflation.   Using international investment managers still has main advantages.  First, this provides some excellent asset protection. This also provides access to more experienced multi currency managers with different points of economic and world view than anywhere in just North America.

This also provides some privacy.

May I add one more word on privacy?  If you are a law abiding citizen then an overseas account gives you as much privacy as you need.  If you break the law and have almost any government looking for your financial data, then no system or structure you use is enough.

I have not touched on this subject for years because this is such old news…but knowing we have many new readers…let me repeat what I shared with readers clear back in the 1990s.  “Bank privacy is dead”.

Here are just a few of my articles at this site in the archives  from the 1990s and early 2000s.  Please read them carefully.
https://www.garyascott.com/privacy/77/
https://www.garyascott.com/privacy/50/
https://www.garyascott.com/privacy/167/
https://www.garyascott.com/privacy/60/
https://www.garyascott.com/privacy/59/

Yet here is one more brand new story….about what is known as the most private place in the world…Liechtenstein.

Here is a direct quote from a February 22, 2008 BBC article entitled
“Liechtenstein fury at German tax snooping”  by Steven Rosenberg

“Liechtenstein also has the reputation of being one of the most secretive tax havens in the world.

“Just ask the Organisation for Economic Co-operation and Development.

“This financial watchdog says Liechtenstein is one of only three states left on its blacklist of ‘uncooperative tax havens’ (the others are not a million miles away – Monaco and Andorra).

“Liechtenstein this week attacked the authorities in Berlin for buying information on German businessmen clients that have bank accounts in the tiny Alpine principality.

“Germany has launched a tax evasion investigation using the data, which was supplied by an anonymous informant who was reportedly paid 5m euros (£3.75m; $7.3m). “

So I will say this again.  Please for your sake, don’t break the law anywhere…anytime.  This could come back to haunt you in unexpected ways.

Here is an example.  The data the German authorities obtained about accounts in Liechtenstein covered people from around the world…not just Germany…so the Germans began sharing it.

According to my European banking sources, only one European tax authority turned the data down…the Danes.   They believed that since this data had been illegally obtained it should not be used.

One reason I have banked for so many years with Jyske Bank is the same reason why I live half the year in Ecuador.

I like Jyske’s services, their very reasonable fees and their solid banking foundation…but in addition I like the Danes…feel an underlying honesty, sense of fair play and sound judgement.  The have never let me down which is why I am not surprised that they worked for several years setting up this structure so they can continue to serve Americans…when so many other banks have cut us Yanks loose and run.

I expect that the service JGAM will provide is still a work in progress and have noted the people there questioning, adapting and smoothing out a new system.

Everything I have seen to date suggests that I will be happy with this new program
because the people there like I have always seen seem focused on giving a service that is safe, wealth preserving, ground breaking and easy for the customer.

I’ll be adapting our multi currency course to reflect the changes and will keep you informed about new ways we can continue to learn about this mysterious, interesting and profitable world of multi currency investing.

I am not paid a penny for writing this about Jyske Bank and have always been able to write that I keep them as my bank simply because I like them the best of all banks I have used.

I can continue writing this and hope until next message that you find all these qualities with whomever advises you on your finances, savings and wealth.

Gary

You can join me with Thomas Fischer of JGAM at our October 2-5 lifestyle International Investing & Business Made EZ North Carolina

We have selected these dates for our next course because this is traditionally the weekend when the fall colors are best.  We’ll meet here for a meal multi-currency-meeting-place

at our house on the farm.

Here is Thomas Fischer talking with a group at a previous course.

multi-currency-meeting

You can still  make to our June 19-21 Ecuador Shaman Tour

See dates for our Autumn courses and tours:

Ecuador Coastal-Quito Real Estate Tour

Ecuador-beach-meeting

We’ll see properties in this developmet and stay at and walk that beach below.

Ecuador Super Thinking + Spanish Course

Ecuador Imbabura Real Estate Tour

See houses for sale in the San Miguel development
Cotacachi-real-estate-for-sale

like this.

cotacachi-house-for-sale
Learn about this Imbabura real estate for sale at Cotacachi Real Estate at San Miguel

Ecuador Ecuador Import Export Course

International Investing and Business Made EZ Ecuador

See discounts for attending more than one course.