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Q&A: Safety in Mexico and Offshore Banking

February 25, 2011
Tulum, Mexico

I woke up this morning to the sound of waves crashing on the beach in Tulum and the sun slowly rising over the Atlantic. There’s hardly a soul for miles… and the weather is perfect.

Matt, Tim, and I are staying out here for the next several days as a mini-retreat, discussing business and investment strategy, and trying to make sense out of what’s going on in the world.

For research purposes, I also wanted to spend some time living ‘off the grid’ on the beach to see whether desalinized water is an effective solution for personal water consumption, and the home we’ve rented here is a good test of that.

I’ll tell you more next week; moving on to this week’s questions, I’d like to start with reader Jim D who says, “Simon– if you are a US citizen, open foreign accounts, and you file the required tax reports, can’t they still freeze your offshore accounts?”

If you bank in your home country, whatever that country may be, there are legions of bureaucrats who have the authority to freeze your accounts, and even dip into your funds and help themselves to a little taste without your approval.

In the US, this can happen at both the federal and state level through hundreds of different agencies and courts. It’s really spooky when you consider the sheer magnitude of government agents who can exert control over your financial well-being.

It’s true that US taxpayers have to file annual disclosures, informing the government of their foreign accounts. You should absolutely do this; the Obama administration is hiring thousands of new IRS agents to sniff out cheats, and noncompliance isn’t worth the risk.

Frankly it only takes a few minutes to fill out the forms, and the peace of mind is worth it. Why? Because when you place your money in a jurisdiction outside of your home country, suddenly these legions of bureaucrats don’t have control over it anymore.

There is a huge difference between them knowing where the account is and having authority over the account. Just because you file the forms and tell them where your money is doesn’t mean that they can just snap their fingers and freeze that account.

Certainly you can add multiple layers, such as trusts and corporations, for extra protection… but for most people, simply holding a personal offshore account provides more security than 99.99% of the population can claim to have.

Also bear in mind that offshore banks may often be stronger than banks in your home country… financial institutions in places like the US and UK are quasi-government sponsored entities at this point, relying on taxpayers and central bank funny money for their profits.

In stronger jurisdictions such as Singapore (which has never had a bank failure), financial institutions are strong and stable, typically a better choice for deposits.

Next, Gary asks, “Hey Simon, Mexico is one of my favorite places to visit. I’m particularly interested in Todos Santos in Baja and the Tulum area for visiting and RE investment purposes. I’d appreciate any input you have– I’m planning on driving from San Diego to Cabo again this spring. Will I survive?”

Mexico gets a lot of bad press, and that’s one of the reasons I’m here. Clearly there are problems in the country… but the mainstream media have everyone terrified that they can’t cross the border without getting their heads cut off and displayed on YouTube. It’s nonsense.

I’ll tell you a lot more about this next week… but the short version is this: the main challenge in Mexico isn’t drug-related crime, it’s the US government’s influence over the Mexican government’s response to drug-related crime.

Existing SMC members should check our membership site for your discount and free shipping offer.

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About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

Comments on this entry are closed.

  • Diogenes

    The price is definitely wrong. There is no way it should cost anything less than $2000. At that price those contacts will be overwhelmed within 6 months.

  • Don Bull

    Simon, where in Tulum? Just got back from two weeks at Catalonia Tulum, lovely spot!

  • Maldek

    In response to your reply to RAUL:

    The whole idea of multiple flags is for people who have at least SOME assets to protect. If you live off food stamps or social security your best bet is to stay where you are and hug the socialist goverments, as they are your best friend.

    If on the other hand you DO have an independent life and some assets to protect (lets draw a line here and say $100K+) you are spending 1% on excellent information from people who know what they are talking about.

    I did physicaly move to south america in 2009 and I can assure you there are plenty of pit traps on the road ahead.
    IF you are serious about the multiple flag idea the deal is reasonable – if you are just trolling around the internet, dreaming of a better life that will never come true because you are too lazy to take action anyways, then you are right – for daydreamers the price is an investment with no return.

    • donkeyslobber

      smug weasel

    • Rob Gonzalez

      Where in South America did you move? I want to get out of the US. The government will soon be raiding our bank and retirement accounts as they did in Greece. They can’t pay their bills so they want the citizens to pay their bills AFTER they wasted our tax money and got the country deep in debt. I say this because of the recent news that the government raided the retirement funds of government workers. It will start there and they will then move to the citizens. We have to face that we have a criminal president and an extremely corrupt government who is gearing up to wage war on the citizens. Why else would DHS purchase 2 billion rounds of ammo? Napaleatano refuses to answer why to the senate. But insiders have said their goal is to match the amount of ammo the citizens have. Why do they need to match our ammo? There are over 100 million gun owners in this country. Even the municipal police departments are facing ammo shortages because of DHS and they are now bartering with other departments for ammo. What are they doing? Why is the government raiding retirement funds? It’s time to get out of here while you have a chance and particularly time to move any retirement funds you may have off-shore where they can’t be raided by our government. We have a true tyrant in the white house and he’s try to disarm us to make us a socialist/communist state so that they can control us and so become part of the NWO being planned. The US being armed is the only thing preventing them from succeeding. We have to protect ourselves from DHS and also protect our money.

  • http://twitter.com/MichaelPorfirio Michael Mason

    Yeah, I was thinking $1295 was pretty damn reasonable.

    – MPM

  • John L

    Simon, I now you think very highly of Singapore as a business/banking destination. What do you think of South Korea? The economy has been doing very well and with a potentially united Korea in the next few years it could become quite a substantial market.

  • David

    A bit off-topic, but I’ll be mailing in form 8854 in about a month. Will I eventually receive a letter from the IRS saying that everything’s okay or not? I know if they think you expatriated for tax reasons then you’re not even allowed to enter the US as a tourist. Want to make sure everything is closed off properly so I can move on with life…

  • Mike

    well how else can Simon fund such a big farm in Chile? ;-)

  • Guest

    Just received a letter from my Swiss bank that they are kicking me out.  This is the second time, the first I lost money after UBS closed my account. I have had it with our USA Bully Government. WWSD–What would Simon Do?

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