By Brad Thomason, CPA


So maybe you’ve heard about people moving their money offshore and wondered if it might be for you?  Could be.  Turns out there are several reasons why people start conducting transactions outside of the US – and a lot of them are not what you think.  In this piece, I’m going to try to hit some of the highpoints, and also offer you a few folks to contact for more information.


Let’s get this one out of the way first.  As a general rule, if you are a US citizen and you earn money, you owe US taxes on it.  Where you earn the money is largely irrelevant.  Why?  Because when you travel to another country, you do not stop being a US citizen, and you retain the privileges that go with that designation (think access-to-embassies, military-protection, etc).  Since you get to keep the privileges, you keep the obligations too.  That’s the theory.

But like most areas of the tax code, there are exceptions to the general rule, and provisions that apply specifically to people engaged in a certain activity (like, in this case, living and working in another country).  The applicability of these provisions will be determined by exactly what your foreign dealings and transactions are.

The point is that simply moving money offshore is not effective as a tax strategy in and of itself.  But if you have foreign transactions anyway, there are likely to be certain tax treatments that may be available which could make one way of operating more tax efficient than another.  Which is a general theme throughout all of the tax code.

If you want some real expert insight on this topic area I suggest you contact Dallas-based CPA, Maurice Glazer.  Morey created and runs the Glazer Financial Network ( and he specializes in tax work for professionals and business owners with complex returns.  Many of his clients have offshore aspects to their dealings, and he is a frequent lecturer on these topics.

Asset Protection

There was a time when moving money to a foreign country was a good way to hide it in case anyone ever tried to sue you.  But it’s probably been a generation since that was an effective strategy.  With the abundance of electronic data that is now available and the degree of reporting that goes on within the financial industry in the post-9/11 world, finding assets is a lot easier than it used to be.

But getting to them, even if you know where they are, can still be a bit tricky.  In a world obsessed with suing the deep-pocketed for all infractions real and imagined, that’s a big deal.  Which is why Asset Protection remains a major reason that people put money offshore.

If a US creditor shows up at a foreign bank with a judgment from a US court and asks for the keys to the defendant’s account (which will probably be in a foreign trust or corporation, controlled by a trustee), the foreign banker will most likely smile (smirk…) and point out that the bank is not subject to US law.  Silly American.  In order to get any assets out of the bank, the creditor will have to come back with a court order from a local court.  And it turns out that foreign court orders are often a whole lot tougher to come by than the US version.

Beyond that, even if they could get the foreign court to agree, there is still the matter of the additional time, hassle and expense.  Simply put, moving assets offshore still creates a big headache for would-be beneficiaries of frivolous lawsuits, even when the creditors know the assets are sitting there.  Which in turn, has a deterrent effect.

Now, I’ve dramatically over-simplified the story to make it concise.  The real thing is more involved, but the general point is valid.  Joel Nagel, a lawyer from the Pittsburgh area, is a very experienced expert in this field, who can guide you through the actual ins and outs.  Like Morey, he spends a lot of time out on the speaking circuit, and working with clients who have complex financial issues and structures.  You can reach his office at (412) 749-0500.

Doing Business

Oddly, this is the one that seems to get overlooked, yet may be the most common.  People who do business internationally often need banking, legal and other services outside of the US as a simple convenience to efficiently executing commercial transactions.  Enough said.

Investment Opportunities

It’s no secret that certain areas of the globe are experiencing faster growth and a faster pace of new opportunities than some of the more mature economies.  True, you can often invest in the securities of foreign firms right on the US markets (in the form of funds, ETFs, ADRs, etc).  But to invest in smaller firms, or deals that are local in nature (like real estate or farming) you may need to actually be there.  The expense of investing offshore puts this set of options out of reach for the typical US retail investor.  But at the economies of scale available to accredited investors and other high-net-worth types, these costs can easily become a logical price to pay for entry.  And you may get an ongoing series of cool trips out of it too.

Whether for diversification, or because there is a belief that the deals are better than what’s available domestically, the desire by some to invest overseas is not new; nor is it going away.

Conference in May

If you are interested in learning more about these topics you might want to consider attending a conference or two in a foreign place, just to get a flavor of what’s out there.  I speak at several of these throughout the year (though usually I’m talking about what to do with the part of your money you leave in the US – like investing it in tax liens…), and I have observed that most attendees go home pleased and feeling like they’ve gotten quite an education.  That goes for the first-timers and the experienced hands alike.  These topics can be complex, and the amount of info that one needs to get a grasp of can be considerable.  But for those who seek knowledge, lots-of-education equates to very-enjoyable-trip.

This particular conference is called the Central American Advantage Conference and it will be held in Managua, Nicaragua May 15th – 19th.  Topics will include tax and legal information about US citizens living, working and investing abroad; international banking and brokerage accounts; and talks by business owners who will present specific opportunities to investors, and discuss in general what it’s like to do business offshore.

The conference is being hosted by Hemispheres Publishing Group, and you can find out all of the details by visiting their website

For the record, I don’t get anything if you sign up and attend.  But I do think it represents a good opportunity to learn more about many of the aspects of offshore dealings.  Plus you will probably have a lot of fun (these things usually have a good balance of work and play to them; I’m planning to do some surfing while I’m there…).

There are lots of resources out there for people who want to engage in legal and legitimate offshore transactions.  The folks who promote offshore avenues as ways to skirt laws or evade taxes are just what they sound like: crooks.  Obviously, to be avoided.  But don’t let the bad light they shine on the subject lead you to thinking that’s all there is to the story.  Because it certainly isn’t.  For many people, adding an offshore component to their current dealings makes a lot of sense.  Best of all, for those willing to invest a little time, it’s a pretty easy thing to learn about.


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