JS 93: Living, Investing & Retiring Overseas with Domingo Silvas CEO of EscapeArtist.com

January 28th, 2015 by Jason | Comments Off on JS 93: Living, Investing & Retiring Overseas with Domingo Silvas CEO of EscapeArtist.com

Domingo_Silvas

Domingo Silvas is the CEO of EscapeArtist and comes on the show to talk to Jason about his company and offer information and insight on international travel, real estate, and owning businesses off shore.

 

 

Key Takeaways:
1:47 – In 2015, a lot of people are becoming more aware of their privacy.
2:40 – EscapeArtist has been in business for 20 years.
3:09 – A lot of countries are now requiring a five-year plan or a large investment to get a passport.
4:33 – Panama is one of the easier countries to get into.
6:19 – The EscapeArtist website has good country ambassadors for Chile and Panama.
8:09 – You can gain residency and citizenships in other countries by using ancestry.
9:47 – The five flags are core business, your residency, your citizenship, where you do your core investments, and your recreation.
15:21 – The Mayan River area by Tulum, Mexico is really up and coming.
17:20 – There are tax advantages of having a business off shore.
20:59 – Right now the Singaporean dollar is really strong so a lot of people are having bank accounts opened in Singapore.
24:37 – Before you decide to just get up and move somewhere, go rent a place, go live there for three or four months, and make sure that you like it.

 

Tweetables:

“Residency isn’t so hard. The passport is the hard one.”

“If you’re an American, you are wearing the Scarlett letter on your forehead.”

 

Mentioned In This Episode:
www.escapeartist.com
Doug Casey, The International Man
Diane Kennedy

 

Transcript

Jason Hartman:
It’s my pleasure to welcome Domingo Silvas to the show. He is the CEO of EscapeArtist, and he has some great insights and overviews on the international landscape, everything from real estate deals, asset protection, expat living, all of the rest. It’s a pleasure to have him join us today. Domingo, welcome. How are you?

Domingo Silvas:
Doing great. Thank you for having me on the show. I really appreciate it.

Jason:
Well, the pleasure is all mine. Give our listeners a sense of geography. Where are located?

Domingo:
I’m actually right now in Alabama.

Jason:
So do you live in Alabama then?

Domingo:
I have a home there. Yes, I do.

Jason:
My mom lives in Alabama.

Domingo:
Oh, really? What part?

Jason:
In Gulf Shores. Yeah, Gulf Shores.

Domingo:
Oh. Yeah, it’s where I have a home, and then I find myself traveling a lot, obviously, to the different countries.

Jason:
So what’s going on in the world of international living and investing and working? I guess we can start wherever we want because you’ve got such a good overview. You’ve got a lot of contributors to your website that write about different things. So I thought I’d ask you and kind of start there?

Domingo:
There’s a lot going on actually. In 2015, a lot of people are becoming more aware of their privacy, some of the travels they want to achieve or some of the movements they want to make to different countries. So we’re seeing a lot of movement in that direction. What a lot of people are really starting to pick up on – and this was a famous move, I don’t know, maybe 10 years aback about the Jason Bourne Identity, you know, where everybody has some sort of – what he called at that time was a burn bag, a way for you to have alternate options, you know, more like ways to protect your home, secure your business assets, a way to invest offshore, a way to have foreign currencies, second passports, and so much more. As we get more and more into that, EscapeArtist has been around for 20 years, and we provide that kind of information and we have a lot of trusted partnerships that we bring to the table. So it’s exciting actually. This is our 20th year in business.

Jason:
Tell us a little bit about that. I mean getting a second passport is no easy task. I’ve had guests talk about that on the show. You hear about so many scams out there too. You just don’t know who to trust and where to do it. Every country has different programs and different complexities. What is your top choice?

Domingo:
Well, here’s the thing. First of all, if someone tells you it’s quick and easy then, you’re right, it’s most likely a scam. There is no such thing and quick and easy. A lot of countries now are requiring either a five-year plan or a very large investment. Most likely – like St. Kitts, if you’re making a $400,000 investment, you can get one from there, but there are other countries that are low entry points like Panama. Panama doesn’t necessarily require a $400,000 investment, but it could be anywhere between 15,000, 25,000 to start the process.

Jason:
Well, define investment, if you would. What does that mean?

Domingo:
Investment means that you’re going to actually invest into a piece of property over there. Most of them are real estate driven. If you buy yourself – in St. Kitts, for example – a nice condo that’s $450,000 and above, that qualifies you for their program. Most people who can do that do that route.

Jason:
The problem is those condos are not very good investments. I mean I’ve looked at that deal in St. Kitts, and there’s just no rental market in these places, depending on expats, to be vacation rentals. I mean basically you’re probably paying $200,000 for the second citizenship there, given that the investment could be so much better elsewhere. That’s kind of the way I look at it. I’m not keen on that one. I know that’s been around for awhile, but go ahead with what you’re saying because there’s definitely some interesting stuff in South America and other interesting stuff in the Caribbean too.

Domingo:
Yeah, there is. I mean Panama has a really nice program. Panama is becoming the up and coming – well, it’s been around, but it’s becoming a lot easier because, one, they deal with the American dollar. Two…

Jason:
They’ve got American infrastructure.

Domingo:
Exactly. Actually, if you go down there, a lot of people refer to the southern Miami because if you go down to Panama it actually does look like Miami, the high rises and everything. It’s changed a lot over the last 10, 15 years. It’s a lot more stable, a lot more welcoming. You can establish yourself pretty nicely down there, and it wouldn’t bee too bad of a move to adapt yourself to a Latin culture that has the mix between a lot of Americans and the Latin countries.

Jason:
So Panama you like, right?

Domingo:
Panama is good. I like Panama. There’s also – well, there’s a couple others, but they’re a little bit more difficult to gain entry into. Ecuador is always a nice one to go down and live and to be a real part of it, but the problem is you’ve got the government there. It’s kind of – it’s one of those – yeah, that’s one way of placing it.

Jason:
Corrupt. On those lists, you know, which have their own reliability issues, of course. I mean I freely admit that. They always say Ecuador is one of the most corrupt countries in the world. Certainly, there are many others. In the U.S. the corruption is here, but it’s – I call it legalized corruption. There’s an oxymoron, right?

Domingo:
Yeah. It’s legal for them, right? You have to look at it. I mean there are very few places. What I tell people, it’s like it’s really where you find yourself and that you can call yourself home because a lot of people do love Ecuador. They just ignore the government component of it, and they just love the atmosphere. The same thing with Chile. Chile is an up and coming. There is a lot of stuff going down there. If you actually go to our escapeartist.com website, you can click on the Chile portal, and we have two great EscapeArtist ambassadors that actually provide some amazing information. The same thing with Panama. We have a country ambassador for Panama as well. You can get a lot of your information directly from someone who actually lives there, and it’s up to date. It’s not one of those articles that you read two years ago and then no one’s updated it. Our stuff is pretty well updates, and you have our ambassadors to reach out to. The same thing on the one in Columbia.

Jason:
The idea is, though, if you’re talking about the burn bag concept or the bug-out bag concept, the idea really is to have that second passport, that second citizenship as a plan B. It’s not to live there necessarily. It’s just to have the option to travel and not have your travel restricted. There is some fear, and I think it’s worth considering. I call it economic Berlin Walls as countries and even states. I think the state of California is doing this to some extent, my former home, where they’re putting up these barriers to moving one’s money. If things get really bad at some point, they might put up barriers to travel in addition to capital controls. Which is the best place, in your opinion, for not moving there, not living there? Residency isn’t so hard. The passport is the hard one.

Domingo:
Yeah, it is. The passport is the hardest, which is why most of them require – the good ones will require some sort of investment. We go back to the St. Kitts option, for example. You’re right about the investment component. It doesn’t really have a resale market or something that’s there, but if you’re seriously looking for another option for a passport, you’re going to pay the money. That’s just the way it works. A lot of countries out there are doing that. Now, you can gain residency and citizenships in other countries by ancestry. So there are a lot of countries, especially in Europe, that are using the ancestry component. If you have a grandparent that, for example, was an Italian citizenship, you can actually go and claim your Italian citizenship, your parents. Hungary has been doing that for a couple years now and a few other countries that are up and coming because they’re starting to see that other people are looking for options and there’s got to be a way to gain another citizenship that potentially gains them another passport.
Now, depending where their citizenship is is going to be, obviously, depending where the passport and value behind it. Having one in Italy, for example, gives you the little – the EU benefits that most people may require. Then you also have the Latin countries that are doing the same. Mexico has an ancestry citizenship. If your grandparents or parents are from Mexico, you can apply to get your citizenship from Mexico. Now, obviously the U.S. does not publicize this, or they don’t encourage it, but it is another option for most people. When we talk about the burn bag or the get-out back, a lot of people also refer to the Five Flag Theory, having a different place where your citizenship, residencies, where you do your core business, investments, and where you like to have fun are completely in a different location.

Jason:
Okay, so that’s like Doug Casey back in the 70’s when he wrote about the international man. This sort of goes along with that, and this is a great thing. What are the five flags? One is where you actually conduct your core business.

Domingo:
Right. It’s core business, your residency, your citizenship, where you do your core investments, where you have your accounts and your assets, and your recreation, basically where you like to play.

Jason:
In designing these five flags, how do you pick those various five spots?

Domingo:
Well, let’s go back. Let’s go through the five in a sequence. First is citizenship, having at least one citizenship outside your home country. Like I said, if you can go with the ancestry component, if you’re listening and you happen to be from – your parents are from Italy or your grandparents or other countries throughout the EU or Latin America, gaining your second citizenship that way is a great component. Having your citizenship outside of the U.S. is one way to go and then getting a residency. You move out from your home country. You may be a citizen of, for example, Italy, but you actually live in Belize. Having them completely locations, not on the same. So not getting your citizenship and residency in the same country is not what Five Flag Theory is about. The third one is getting your business core. If you do, for example, have a citizenship in Italy and you live in Belize, then you’d get your IBC, your international business company out of Panama. So it’s keeping them all completely separate.
Your investments. You may want to go with an investment firm out of St. Martin or other places. So where you keep your different currencies as well. That’s a big part of it. Having your money in different banks, different currencies. So you provide a level of security for you. The fifth one, which is really the one that’s fun, is basically go play and have fun, but don’t do it in the countries where you have either your citizenship, your residency, your business, or investments in.

Jason:
All right. Good. One of the objections that I find people have – and I share it with many of my listeners, Domingo – is that many of these countries they’re just so primitive. I mean most of our listeners are U.S. based. They’re thinking about, you know, just have some options, as you’re saying. It’s a valid thing, I think, to say you want to have some options. Who wants to live in Belize? Belize is a really backward, high crime country, if you ask me. I have friends that live there, and I bug them about it all the time. I’ve been there twice. I know what it’s like. I’ve explored it in a reasonable amount of depth. Why would an American want to do that? I had John McAfee on my show when he told his horror story about Belize. I thought, wow, you know, it’s just kind of amazing that people actually think that’s better. I don’t know. It’s strange.

Domingo:
Well, one of the things I’ve learned being a part of EscapeArtist is that everybody has their own…

Jason:
Their own thing, right?

Domingo:
Their own thing. Where we find Belize as a place to live is difficult to live, it’s high crime, people will choose that over Detroit, not picking really on Detroit but…

Jason:
Fair enough. That’s actually a good point you bring up. Detroit is a socialist disaster. There is some thought that it’s coming back. I can see some spots of light there but, gosh, if you live in the inner city in Detroit you probably would be much better off living in Belize. Certainly, weather wise you would. I would agree. The funny thing is that’s not most of the people who are considering this or listening to this show. Most of the people listening to this show have saved and invested. They’ve got a few bucks. They can do some stuff. They’ve got some choices. That’s the one that strikes me kind of odd.

Domingo:
Yeah, that’s a good point. Let’s go back and use Belize as an example. I’ve been there several times. I’ve enjoyed it, but I have not lived there. I’ve gone to Ambergris Caye, and I’ve been there. I stayed on the resort, and I enjoyed the beach, and I enjoyed the atmosphere.

Jason:
Did you enjoy the fumes from all those golf carts that go by that don’t have any catalytic converters or the unsanitary restaurants? I mean I don’t know. How about the cockroaches in your hotel room?

Domingo:
You have to look at it. It’s a different type of living. It’s a little bit of sometimes freedom for some individuals, has a certain tolerance to it, so they’ll allow that kind of living because that’s what they want. That’s the kind of freedom they want. They want to wake up and go to the beach and just enjoy it. Others will like a little bit more U.S. feel to it, and that’s why they may choose, for example, Panama. I mean the same thing with Costa Rica. Costa Rica is great. Great environment. Blue zones. You still wonder about the crime there, and you think about the government as well.

Jason:
I don’t know. I’ve never heard any complaints about the government there. It seems sort of pretty laissez-faire but, my God, the potholes are the size of a VW Bug in the road. Everybody has got huge fences with razor barbed wire and bars on their windows. I mean I don’t want to live like that. It’s probably better than the inner city of Chicago or Detroit. I certainly agree with you there. If you love warm weather and like to wear shorts all the time, that’s great like that too, just like Belize is. This is a good conversation about this. I think it’s a more honest look at it than some people have.

Domingo:
There’s another option that’s up and coming. It wasn’t really on the map. It was for a while. It was really big in the 80’s, somewhat in the 90’s. The Mayan River area by Tulum, Mexico is really up and coming. It’s where I’m actually spending some time lately because it’s one of those places where the infrastructure is there that you’re looking for, the security is there that you’re looking for, and the prices are still in an area where people can live a decent life there, but it’s a little bit more expensive than Belize. It’s a little bit more well put together. I think Tulum, Mexico is definitely a place for people to take a look at.

Jason:
Okay. Interesting. Yeah, I’m looking at some TripAdvisor ratings right now as you’re saying that.

Domingo:
The reason why say it’s up and coming is because, if you look at it this way, Cancun was really big in the 70’s and 80’s. Right? As you go down to the 90’s and early 2000’s, Playa del Carmen became really big and popular. Well, Tulum is what Cancun was in the 70’s and what Play del Carmen was in the 80’s where it’s nice and quiet, plenty of opportunity, plenty of investment. There’s going to be a lot of growth there over the next five to seven years as tourists come in because 30 percent of all the revenue that comes into the country of Mexico actually comes from this area. It’s a huge tourism area. You have the resale value. You have the – a better sense of what you’re looking for. You’re definitely going to see more about Tulum on EscapeArtist in the next couple months.

Jason:
You were talking about the five flags, and we got off on a little bit of a tangent, Domingo. Talk about some of those other flags and your suggested locals for those.

Domingo:
That’s an interesting question. For example, we covered citizenship and residency somewhat. When you’re looking at a business venture, right now the more popular ones are the ones from Belize and the ones from Panama.

Jason:
Okay, so tell us about that. What kind of business ventures?

Domingo:
When you look at a business venture and you structure something, there are certain ways – there are certain tax advantages that you get. Obviously, get your own tax advice from your own tax expert. There are tax advantages of having a business off shore. There are ways to really create an alternative option. You create an IBC off in Panama, for example.

Jason:
That’s international business corporate.

Domingo:
That’s correct. Some people have it international business corporation or international business company. You establish one out there. You open up a bank account. Most likely, if you get established in Panama, you open a bank account in Belize. If you get established in Belize, open a bank account in Panama. Although, you’ll find ever since FACTA came out that it’s going to be very, very difficult as an American to actually open bank accounts. They’re going to have you sign so many documents. You have no idea. Send original documents. Send this. Send that. It’s going to take a couple weeks.

Jason:
If you’re an American, you are wearing the Scarlett letter on your forehead.

Domingo:
That’s right, no matter where you go. Once you establish that, you go ahead and get yourself an off shore employee that works for you and that does a lot of your work. In other words, your accounting, your reaching out to your companies. There are a lot of ways that you can actually then start having your customers pay that off shore entity and have a level of protection that you won’t necessarily get in the states. So that’s part of your asset protection to protect what you’ve created as far as a business.

Jason:
Do you have to have an off shore employee? Is that important to making your IBC legit?

Domingo:
It is critically important. It’s critically important that you have the business established off shore, that you have an off shore employee, and that you have a location off shore because there is always the chance that the IRS will come back to you and say, “Hey, just because you did a business off shore but all your business being done in the states doesn’t make it a legitimate off shore business.” They won’t allow you to defer some of the income that that business has created unless you create an actual business off shore, an actual – have an actual employee that does the work for you, and you have a location that makes it more legit. Then you’ll be able to take a lot of your income.
For example, one of our clients they actually did that. Last year they actually were able to save over $200,000 in taxes because that entity off shore took the income. They didn’t claim the normal one million dollars in income that they normally did. They actually only claimed $200,000 because that’s exactly what they pay themselves from the off shore entity. Then the off shore entity went out and did some purchases for them, real estate investments, did some precious metals, and did some other things and was able to defer any taxes that they would normally take in for that million dollar revenue. You want to take a look at a lot of options you have. One of the experts out there, Diane Kennedy, who is a great tax expert…

Jason:
Yeah. She spoke at our last event just a week and a half ago.

Domingo:
Yeah. She’s fantastic, and she can help you structure things properly. I think she’s great. That’s the benefits of having a business off shore. You’re able to defer the taxes and make some other investments off shore that you can defer your tax liability until later.

Jason:
Okay. Interesting. Good stuff. So other flags. I think we have maybe two more.

Domingo:
Yeah. Well, you’ve got the investments and the recreations. So the investments same thing. Have an investment house off shore that you’ve vetted, that you can work with. Also, you want to be able to have multiple bank accounts. Having a bank account in Panama, having a bank account in Mexico or a bank account in Belize and having things in different locations actually provides a level of protection, but you also want to in different currencies. Right now the Singaporean dollar is really strong so a lot of people are doing that, having bank accounts opened in Singapore.

Jason:
It’s not easy to do, though. I was just in Singapore a few months ago and check that – I know with a couple of bankers – and checked that all out. You’ve got to form the company there because you can’t open an account as an American because discrimination, of course, if you’re an American. You’ve got to form the company is what they told me. Forming the company in Singapore is not cheap. You can do it in a lot of other jurisdictions for a lot let less money, but in Singapore the formation costs and the maintenance costs are considerably higher. I mean it’s worth it if you put in quite a bit of money over there but just a point I wanted to make.

Domingo:
Most of the people looking at the Five Flag Theory are ones that typically have the money to do something different.

Jason:

Right. Right. That’s why I said, hey, they’re not living in the inner city of Detroit.

Domingo:
Then the last one really is the recreation. It’s go have fun and go to – one of my places I enjoy is, obviously, Shanghai, Malaysia, Montreal, and few places in Europe and just really go out there and have a good time but try not to do anything where you actually have any of the other four flags planted because for a lot of reasons. You just don’t want to have any business or you don’t want to do something that could – I will just say could cause issues for your entities that you created.

Jason:
Right. Right. One of the things I’ve done a couple of shows on that I’m very intrigued with, and I’ve been there a few times, but I’m actually going to go back and visit again on my way to Necker Island in about a month and a half, and that is Puerto Rico. Pretty awesome for Americans. The tax deal in Puerto Rico is probably for an American the best on the planet, unless you’re willing to give up your citizenship. Then a whole world of options opens. Nobody seems to want to do that, and I would agree with them. I think the American citizenship is pretty awesome. For tax wise, Puerto Ricro, wow, you can’t beat that.

Domingo:
Yeah. Here’s the thing about Puerto Rico. I can speak for this from experience because one of my parents is from Puerto Rico. Puerto Rico is great. I think to move there and to take advantage of the tax I think it’s fantastic, but you have to be aware that it’s a different country. It’s part of the U.S. but it’s a different country.

Jason:
It is and it’s not. Yeah.

Domingo:
Right. So you have to understand that there are things that you do over there, and there are some things you just don’t do. They do have a high crime rate. I mean it is part of the deal.

Jason:
The murder rate is very high in Puerto Rico so watch out. It may not be worth your life.

Domingo:
Yeah. So how much is your money worth really?

Jason:
When that’s quoted, that’s likely to be in the cities, in downtown San Juan. You’re not out where Peter Schiff lives, for example, in this gated home tract where there are a lot of expats and hedge fund manager type of people that are probably mostly Wall Street crooks. Not that I’m cynical or anything. I mean you’re not going to have that problem there. I don’t know. Maybe you would. Thoughts on that, just to speak to the crime rate issue?

Domingo:
I guess I’m going to say it like this. I guess no matter where you decide to live, Detroit, Puerto Rico, Belize, Mexico, you’re going to have your certain level of crime. The truth is you’ve just got to protect yourself. You’ve got to know your surroundings. You have to know your environment. Like you talked about, buying the right place in Puerto Rico, the same thing goes for any other country. Just make sure you know your surroundings and make sure that you know exactly what you’re getting into. I would advise anyone before they decide to just get up and move there go rent a place, go live there for three or four months, and make sure that you like it because, I tell you, sometimes it may be the perfect place, but you may be allergic to something in the water or something who knows where, in the liquor, and the next thing you know you’re…

Jason:
In the liquor. That’s good. Yeah, in the air certainly. There are all kinds of issues. Yeah. Definitely renting is the first thing you do. No question about it. Okay. Good. As we’re wrapping up, Domingo – this has been very insightful – give out your website if you would. I know you did earlier but just mention it again.

Domingo:
Sure. Our website is www.escapeartist.com.

Jason:
Any final thoughts that you have on international opportunities?

Domingo:
Like I said, up and coming, Tulum, Mexico. Keep an eye on that. You’re going to see a lot of press on that in the next few months not just from us but from a lot of others. Panama, Chile is up and coming. Take a look at that. Come visit the site. Take a look at the countries that are represented on EscapeArtist. Get a feel for the articles that are written. You get a good sense of what those countries are about and feel free to reach out to any one of our ambassadors. They’ll be glad to help you. Singapore or anywhere in Latin America we’re there.

Jason:
I like this ambassador business model. That’s interesting how you do that. Can you elaborate on that? What is an ambassador, and what’s the business model behind that?

Domingo:
Yeah. Real quick. The idea behind it was I can sit here and write articles about places I go to but, listen, I’m not the one living there. I’m not the one diving into the culture and diving into the food and their religion or the government there. So we partner with Escape Artists, the people who actually live there, people who love the essence of actually living in those countries, the good and the bad. We ask them to write articles about the specific countries and guide people and be the point of contact so that when you go to, for example, Ecuador you can reach out to Hector Quintana. You go to Columbia, reach out to Davis Steckenreiter. If you go to Panama, you’re going to reach out to Debbie. At least you know and get to build a relationship with these individuals that can help you kind of guide yourself into that country. Then the same thing with Nigel in Singapore. Before you plan your trip, reach out, build yourself a wealth of knowledge, and go explore.

Jason:
How are they compensated? What’s the business model behind that so people know? Are these ambassadors looking to help people find housing and is that how they make money?

Domingo:
A lot of them do real estate. Some of them they have partnerships with attorneys that you can use. The great thing about it is that they’re trusted resources. You don’t have to go and try to find someone on Google. Just reach out to the ambassadors. We work with a select few partnerships, and they’re the point of contact. You can work with them and you have the name of EscapeArtist that’s been around for 20 years to trust.

Jason:
Fantastic. Good stuff. Domingo Silvas, thank you for the insights and thank you for joining us today.

Domingo:
Thank you very much.

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