Purchase a Piece of Paradise With a Self-Directed IRA

I have been looking into how to utilize a portion of my IRA for further investments in Panama and before I go into this let me set the stage for why.   Casey Research has long discussed the idea of moving some of one’s wealth outside the United States.  While he is promoting a project he has invested in in Argentina, the story line rings true and especially today with what is going on in the World.

Here is what he had to say.

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Freedoms – Secured

Time and again we have warned readers of the need to internationalize, both their money and their lives. This is due to the irrefutable truth that, done right, diversifying across political jurisdictions is the single most effective way to protect your wealth.

1. It gives you currency diversification.. In all of the hyperinflations, simply having money on the other side of a border was sufficient to save your wealth from the ravages of domestic inflation.
2. It raises a barrier against wealth confiscation. The US and other bankrupt democracies are growing desperate. While there is currently a lull in the rhetoric as the administration tries to recast itself as pro-business ahead of the next election, when the history of the next few years is written, it will be of higher taxation – more aggressively pursued. And the use of opportunistic lawsuits to extort assets from those believed to have “deep pockets” will only worsen.
3. It eliminates waking up one day to find your wealth trapped.The sole purpose for growing regulatory interference in the ability of Americans to open foreign bank and brokerage accounts, or to freely move money across borders, is to trap your money and make it available to the government. Before this is over, overt foreign exchange controls are a certainty.
4. It provides peace of mind Intelligently diversifying your assets internationally – and by intelligently, I mean staying well within the bounds of all applicable laws – can provide a tremendous peace of mind. Because come what may, your wealth is not subject to a quick grab or even a slow-moving debasement.

But diversifying your wealth across borders is only half of the equation. The other half is where things get much more interesting. And, I might add, fun.

Life Fully Explored

Most people have what Doug Casey half-jokingly calls a “medieval serf” mentality. Which is to say that they are born, live and die within the same geographic area. This point was underscored recently by a report that just 30% of Americans hold a valid passport!

While living a life of strict limits may work for most, there’s a far smaller group for whom the horizon spreads far beyond the local strip mall and encompasses the world as it is – a planet made up of an incredibly rich and varied landscape of customs, cuisines and cultures.

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With that philosophy in mind, I decided to make the move to Panama in 2006 and am I ever glad that I did.  Investing here is as easy as it is in the US and most modern countries for that matter, with the choice titled property, good protection under the law, title insurance with a number of companies including Chicago Title and the use of limited liability companies to hold ownership.  Take that a step further and to be able to invest in a future retirement home or business with your IRA opens up a lot of opportunities.  With a well placed land investment, you can develop a number of agricultural business investments including dairy and green houses for vegetables or a bed and breakfast hotel or even an Eco Resort for your retiment years.

There are a  number of firms that offer assistance in this area.  Before you make the move however, consult your accountant to make sure that whatever you do is in keeping with the framework of the law.  Self-directed IRAs and Real Estate IRAs come with an important caveat: You are required by law to avoid any “self-dealing” transactions that create a conflict of interest between you (the account’s fiduciary) and the account itself. In other words, every purchase/investment must be made to the exclusive benefit of the IRA. So the real estate you purchase with your retirement funds must be used for growing your retirement account.  We can assist you with this and we have local counsel in Panama that has worked with one of the nations largest companies in making sure that it is done right.  The process is fairly simple and here is the outline.

1. Form a Panamanian Corp. .

2. Writing up a shares purchase agreement between the corporation and the Company that you select to administer the IRA.

3. The client gives payment instructions to the Company via a ¨Buy Direction Letter¨.

4. The funds get wired into an escrow account held by your attorney here in Panama.

5. Then the corporation buys the property using the IRA funds.

We hope that you can visit us in Panama and see some opportunities that we have to offer.