Living and Investing Offshore: Top Things to Know, Common Questions

Living and Investing Offshore: Top Things to Know, Common Questions

Today’s questions relate to the issues of offshore living and offshore investing. Residence outside the United States remains an important wealth and lifestyle management strategy. So, the reader asks:

Question #1: Have you found Portugal to be a good place for expats to invest in real estate? Does the Portuguese “golden visa” program apply to married couples? For instance, if we were to purchase a property for more than 500,000 euros to obtain Portuguese residency, would we both be eligible for fast track residency? And do you have an attorney that we can contact in Lisbon?

Answer: Portugal is indeed a great place in Europe to invest in real estate. The Algarve and the area to the north of Lisbon … actually, the whole coastline of Portugal and much of the interior is a part of Europe that traditionally has not been as popular as places like the South of France or the Spanish coast.

I know that a number of South African friends of mine have bought retirement homes or property on the Algarve, and they love it. They go there during the summer time since it’s nice and warm. It’s a lovely Mediterranean climate. In fact, it reminds me a lot of the climate down in the Western Cape near Cape Town where my home is.

So I’d say, yes absolutely, it’s a great place to invest because it is becoming increasingly popular. Also, unlike the Spanish real estate market, which really nosedived after the 2008 financial crisis, Portugal bounced back really quick and prices seem to have risen just as quickly.

Now, the golden visa program in Portugal allows you to establish the permanent right of residency in Portugal for a property purchase of 500,000 euros or more. It does apply to household members, so if you apply for it in your own name, your spouse would be able to live with you and acquire residency in Portugal.

Residency in Portugal, because it’s a part of the EU, gives you visa-free travel all over the EU. You could get in your car in Portugal and drive through Spain, France or go anywhere within the Schengen area in the EU without having to produce a visa.

When you first acquire the golden visa, it is good for one year. After that, you simply renew it every two years. The renewal is basically guaranteed. The renewal is a mechanism that the Portuguese government put in place to be able to weed out people who may be abusing the golden visa system. But I’ve never heard of anybody not being able to renew it after having made an investment. It’s mainly to discourage criminals and fugitives from trying to take advantage of it. So, for all intents and purposes, once you acquire it you can keep it as long as you like.

As far as a contact in Lisbon, I would recommend that you contact Henley & Partners, which is a Switzerland-based immigration consultant company. They have offices all around the world. Google them and you’ll find that they have a Portuguese office that’s in Lisbon. Their email address is They could certainly help you both with the golden visa and with the purchase of land.

The last question is also related to offshore issues and comes from someone who has invested through some friends of mine … actually, my good friend Rob Vrijhof and his company WHVP based in Zurich. The question is:

Question #2: I opened an account with Bank Winter in Vienna through Goldstar Trust Company in Texas for my self-directed IRA. WHVP is investing my portfolio, and I take no income from this IRA yet. My question is, do I have to report to FATCA?

Answer: (FATCA is the Foreign Account Tax Compliance Act, which is an act that requires people to report any offshore financial interests or holdings to the federal government (the IRS) every year as part of your tax filings.)

Question #3: Living and Investing Offshore: Top Things to Know, Common Questions My custodian, Goldstar Trust, and my CPA say I don’t have to report to FATCA. My confusion is that Bank Winter isn’t a U.S. bank and I have over $250,000 dollars in that IRA. I thought that anything over a certain amount had to be reported if you’re a U.S. citizen. Please help!

Answer: You’re absolutely correct. You do have to report to FATCA, and I’m somewhat mystified that Goldstar Trust would tell you that you don’t. FATCA says that if you have more than a certain amount of money either in a bank account or as a financial interest in a business or any other kind of financial account like a brokerage account in a foreign banking institution, like Bank Winter in Vienna, then you must report that to the IRS.

Your CPA is absolutely wrong. Goldstar Trust is certainly wrong. I’ve said this before, but if you have a CPA who misinformed you about offshore reporting, get a new CPA. You absolutely do not want to be misled about these things, because the penalties can be quite high.

Now the reality is that Goldstar Trust, as the custodian of your self-directed IRA, is technically the legal owner of it. But they own it for your benefit. In fact, it says so on all the documents. It will say “self-directed IRA for the benefit of” whatever your name is. From the perspective of the IRS, that means that you have a financial interest in that account and, therefore, it has to be reported.

I would contact Goldstar Trust and tell them that Ted Bauman from The Bauman Letter at Banyan Hill told them that you do have to report to FATCA. I would also tell your CPA and if they can’t give you an adequate explanation for why they got this one so disastrously wrong, look for a new CPA. One thing you can’t afford is bad advice. The IRS will not accept that in lieu of the penalties that you have to pay if you get caught not reporting it.

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