Take Action Now...Before They Change The Rules On You
In my Monday dispatch to you, I suggested Barclay’s international branch in London as a place to take a first step in diversifying yourself offshore…by opening a bank account there. A reader wrote in Tuesday to tell me that the boilerplate at the bottom of the website for Barclay’s London branch states that the bank doesn’t offer its products or services in Japan or the United States or to U.S. residents. Ouch.
When I had an account with that bank it was to support a rental investment in the U.K. I wasn’t, at the time, a U.S. resident, so, unfortunately, I can’t say whether this boilerplate policy is new or not. The bank certainly didn’t have a problem with my U.S. passport at the time (this was a few years ago). And my address for opening the account was the U.K. rental unit address, so the issue of my being a U.S. resident or not didn’t come up.
However, this brings up an important point: The offshore world is continually changing. If you want to do something somewhere, do it now before they change the rules.
This is particularly true if you’re an American. We are becoming personae non gratae with an ever- and fast-growing number of banks and other offshore service providers around the world.
Opening An Offshore Bank Account
That’s the big-picture current reality. But back to the question of an American opening a bank account with Barclay’s London branch. This raises an interesting nuance worth highlighting.
The bank’s website indicates it won’t open an account for a U.S. resident. It doesn’t, however, indicate that it won’t open an account for a U.S. citizen. So, in theory, to open a bank account with them, what you’d need is foreign residency, not a second citizenship. For the purposes of opening a bank account, your residency is typically established by a local utility bill, which bankers worldwide are generally happy to accept as proof of address.
Sometimes a banker will accept a copy of your lease or a letter from your landlord.
In other words, this is not the same thing as establishing legal foreign residency…as apensionado, an investor, or some other residency option. Legal residency is a different thing from physical residency. You could, in theory (and it happens all the time), have a resident permit for a country without having a verifiable physical residence in that country…and vice-versa. It’s a point worth making and understanding, as, in reality, depending on your personal goals and objectives, what you may need is not legal residency but practical, physical residency.
You don’t have to be a resident of most countries to buy real estate in them. Most countries treat foreigners the same as nationals when it comes to owning real estate and, as well, when making other kinds of local investments (some exceptions exist, but here isn’t the place to detail them).
On the flip side, in some countries, buying real estate is a way to obtain legal residency. Panama is one example where you establish legal foreign residency by buying a piece of property worth US$300,000 or more. (You can split the real estate purchase with an investment in a CD for a total investment of US$300,000 if you prefer.) In Colombia, you can establish residency by investing in real estate worth US$200,000 or more.
On the subject, it’s also worth remembering that residency isn’t citizenship, and you don’t have to be a citizen of most countries to be eligible to obtain residency in them. The flip side of this is that you can gain citizenship in many countries after having spent a certain amount of time in the country as a legal resident.
Understanding the pieces can get complicated…especially because, to return to my opening point, the rules are constantly changing.
But don’t let that keep you from pushing ahead to achieve what I see as the single most important objective for anyone anywhere in the world right now: Diversifying your life. Identify the puzzle pieces that make sense given your personal circumstances and agendas and then take action.
Before the rules change.