{"id":19168,"date":"2018-05-23T10:13:01","date_gmt":"2018-05-23T14:13:01","guid":{"rendered":"http:\/\/www.escapeartist.com\/?p=19168"},"modified":"2020-09-03T13:53:00","modified_gmt":"2020-09-03T17:53:00","slug":"best-foreign-investments-self-directed-ir","status":"publish","type":"post","link":"https:\/\/www.escapeartist.com\/blog\/best-foreign-investments-self-directed-ir\/","title":{"rendered":"Best Foreign Investments for a Self-Directed IRA"},"content":{"rendered":"<p><em>This article was published in the Escape Artist Weekly Newsletter on May 23, 2018. If you would like to\u00a0subscribe\u00a0to the newsletter, please <a title=\"click here.\" href=\"http:\/\/www.escapeartist.com\/subscribing-2017-mailing-list\/\" target=\"_blank\" rel=\"noopener noreferrer\">click here.<\/a><\/em><\/p>\n<p>The biggest reason to set up an international self-directed IRA is to take control of your investments and globally diversify your investment portfolio.<\/p>\n<ul>\n<li>You want to own the best foreign investments to maximize returns to your retirement account.<\/li>\n<li>You want to become your own investment advisor and search out unique and high-returning investments earning more than a boring U.S. index fund can offer.<\/li>\n<li>You might even want to protect your retirement savings by moving it out of the United States and by diversifying out of the U.S. dollar.<\/li>\n<\/ul>\n<p>These are all good reasons to read on and see what you can do to globalize your IRA. For example, some analysts are saying that stocks have hit dangerous PE Ratios. See the climb since 2009?<\/p>\n<p><a href=\"https:\/\/www.bloomberg.com\/gadfly\/articles\/2017-12-21\/ghost-of-1972-and-nifty-fifty-hangs-eerily-over-stocks\" data-cke-saved-href=\"https:\/\/www.bloomberg.com\/gadfly\/articles\/2017-12-21\/ghost-of-1972-and-nifty-fifty-hangs-eerily-over-stocks\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-19170\" src=\"http:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image2-1.png\" alt=\"Best Foreign Investments for a Self-Directed IR\" width=\"939\" height=\"411\" srcset=\"https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image2-1.png 939w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image2-1-300x131.png 300w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image2-1-768x336.png 768w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image2-1-600x263.png 600w\" sizes=\"(max-width: 939px) 100vw, 939px\" \/>https:\/\/www.bloomberg.com\/gadfly\/articles\/2017-12-21\/ghost-of-1972-and-nifty-fifty-hangs-eerily-over-stocks<\/a><\/p>\n<p>How about the cycle since 1999?<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-19172\" src=\"http:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image4-1.png\" alt=\"Best Foreign Investments for a Self-Directed IR\" width=\"1266\" height=\"617\" srcset=\"https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image4-1.png 1266w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image4-1-300x146.png 300w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image4-1-768x374.png 768w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image4-1-1024x499.png 1024w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image4-1-600x292.png 600w\" sizes=\"(max-width: 1266px) 100vw, 1266px\" \/>Better to have some eggs in a different basket as the saying goes. Global diversification is wise, prudent, and easy to do. It just requires a little bit of outside-the-masses thinking.<\/p>\n<p>In order to take control over your retirement account, you must first set up a self-directed IRA. And this account must be with a U.S. custodian experienced in offshore transactions. There are many such firms out there, and some are better than others, of course.<\/p>\n<p>I, personally, use <a title=\"NuView\" href=\"http:\/\/www.escapeartist.com\/contact-joey-eplite\/\" rel=\"\" data-cke-saved-href=\"http:\/\/www.escapeartist.com\/contact-joey-eplite\/\">NuView<\/a> out of Orlando, Florida, and have been very happy and satisfied with their service and fee structure. While many firms offer self-directed accounts, very few understand and allow international transfers. NuView does.<\/p>\n<p>For most, setting up a self-directed account simply means moving from your traditional custodian to one that allows for foreign investments. For active traders, this can also mean forming an offshore IRA LLC.<\/p>\n<p>The most popular foreign investment for self-directed IRAs in 2018 has been international real estate. In this category, our clients tend to focus on condominiums and single-family homes, which they plan to rent out. Some buy commercial real estate and a few purchase raw land that they plan to hold or build on.<\/p>\n<ul>\n<li>When you improve raw land, just remember that all the money for the project should come from your IRA.<\/li>\n<li>You and your friends can partner together on larger real estate deals such as hotels and office buildings.<\/li>\n<\/ul>\n<p style=\"text-align: center;\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-19171\" src=\"http:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image3-6.jpg\" alt=\"Best Foreign Investments for a Self-Directed IR\" width=\"1066\" height=\"1155\" srcset=\"https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image3-6.jpg 1066w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image3-6-277x300.jpg 277w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image3-6-768x832.jpg 768w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image3-6-945x1024.jpg 945w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image3-6-600x650.jpg 600w\" sizes=\"(max-width: 1066px) 100vw, 1066px\" \/><em>Income-generating oceanfront condos on a world-famous surf break.<\/em><\/p>\n<p>Yes, an IRA can legally own real estate and a lot of other alternative investments. Other top investments for self-directed accounts include private equity, promissory notes, physical gold and certain gold coins, oil and gas, and cattle. Your IRA can\u2019t own insurance, collectibles, or stock in S corporations.<\/p>\n<p>How you invest with an IRA is very different overseas from domestic investments for a couple reasons. One is taxation, and specifically capital gains.<\/p>\n<p>The way to find the best foreign investments for your self-directed IRA in real estate is to balance expected returns (rental income and appreciation) with the capital gains tax you will pay in the country.<\/p>\n<p>When you buy real estate abroad with your personal savings (after tax money and not an IRA account), you should look for properties in countries with a capital gains rate of 20% or less. That\u2019s because you\u2019ll pay a minimum of 20% on long-term gains no matter where you live and no matter where the property is located.<\/p>\n<p>This is because U.S. citizens are taxed on worldwide income. When you sell a foreign property, you\u2019ll pay the U.S. long-term rate of 20% to the IRS. Then you get a dollar-for-dollar credit for any foreign taxes paid.<\/p>\n<p>This means that the lowest capital gains rate you\u2019ll pay on the sale of foreign real estate is 20%.<\/p>\n<p>For example, Colombia has a capital gains rate of 10%. If you sell a property in Colombia that you\u2019ve held for at least 2 years, you\u2019ll pay 10% to Colombia. Then, when you file your U.S. return, you\u2019ll report the gain and use the Foreign Tax Credit to get a credit for the 10% paid to Colomba. The result is that you\u2019ll pay 10% to the IRS (20% U.S. rate minus the 10% paid to Colombia, for a total global tax rate of 20%).<\/p>\n<p>The capital gains tax rate in Australia is 27%. So, when you sell a property there, you\u2019ll pay 27% to Australia and nothing to the IRS. The Foreign Tax Credit will have wiped out your U.S. tax obligation.<\/p>\n<p>So, again, when investing non-IRA funds, you want to look for countries with a capital gains rate equal to or lower than the U.S. rate. The list of countries with capital gains rates of 20% or less is quite significant. See: <a href=\"https:\/\/en.wikipedia.org\/wiki\/Capital_gains_tax\" data-cke-saved-href=\"https:\/\/en.wikipedia.org\/wiki\/Capital_gains_tax\">Capital Gains Tax by Country<\/a>.<\/p>\n<p>Because you pay zero U.S. tax on money deposited into your retirement account, and assuming returns are equal between countries, the best foreign real estate investments for your self-directed IRA will be in countries with a zero capital gains rate. That is to say, any capital gains tax paid will reduce your net returns and won\u2019t give you a corresponding U.S. tax credit&#8230;so, it\u2019s money wasted.<\/p>\n<p>The most popular countries with zero capital gains tax include New Zealand, Hong Kong (zero if held for at least 36 months), and Belize. Most of the other countries with no capital gains rates are in the <a href=\"https:\/\/www.globalpropertyguide.com\/Caribbean\/Belize\/capital-gains-tax\" rel=\"nofollow\">Caribbean<\/a>.<\/p>\n<p style=\"text-align: center;\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-19174\" src=\"http:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image6-5.jpg\" alt=\"Best Foreign Investments for a Self-Directed IR\" width=\"1176\" height=\"820\" srcset=\"https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image6-5.jpg 1176w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image6-5-300x209.jpg 300w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image6-5-768x536.jpg 768w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image6-5-1024x714.jpg 1024w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image6-5-600x418.jpg 600w\" sizes=\"(max-width: 1176px) 100vw, 1176px\" \/><em>The Belize Marriott Residences Ambergris Caye Resort, coming soon.<\/em><\/p>\n<p>Another best foreign investment with a self-directed IRA is Panama hardwood. Your retirement account can buy $20,000 in an approved teak plantation, and you\u2019ll get residency with a path to citizenship in 5 years. You\u2019ll need to pay residency fees from your personal account. You can\u2019t receive an indirect benefit from your retirement account; thus, you need to cover some expenses from your savings.<\/p>\n<p>This program is only available to U.S. citizens and citizens of the \u201c50 friendly nations.\u201d For a list of those countries, and more information on this program, see: <a href=\"http:\/\/premieroffshore.com\/how-to-get-residency-in-panama-using-your-ira\/\" data-cke-saved-href=\"http:\/\/premieroffshore.com\/how-to-get-residency-in-panama-using-your-ira\/\">How to get Residency in Panama Using Your IRA<\/a>.<\/p>\n<p style=\"text-align: center;\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-19173\" src=\"http:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image5-6.jpg\" alt=\"Best Foreign Investments for a Self-Directed IR\" width=\"667\" height=\"500\" srcset=\"https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image5-6.jpg 667w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image5-6-300x225.jpg 300w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image5-6-86x64.jpg 86w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image5-6-600x450.jpg 600w\" sizes=\"(max-width: 667px) 100vw, 667px\" \/><em>Baby teak for the early planners looking for the ultimate hard asset investment in an IRA.<\/em><\/p>\n<p>Then there are clients that want to trade their own accounts or invest in cryptocurrencies. These active traders need to form an offshore IRA LLC in addition to moving their accounts to a self-directed custodian that allows for international investments. Because this adds about $3,500 to your startup costs, you should be committed to these investments before moving forward.<\/p>\n<p>I hope you\u2019ve found this post on the best foreign investments for your self-directed IRAs to be helpful. For more information, feel free to contact one of the various IRA custodians out there, or my favorite, <a title=\"NuView\" href=\"http:\/\/www.escapeartist.com\/contact-joey-eplite\/\" rel=\"\" data-cke-saved-href=\"http:\/\/www.escapeartist.com\/contact-joey-eplite\/\">NuView<\/a>, if you\u2019d like.<\/p>\n<p>By the way, Glen Mather, the owner of NuView, is a real top-notch guy. He has been working with the Wheelchair Foundation for years and recently pulled me in, too. We delivered over 400 wheelchairs to Nicaragua so far and are working on a container of 280 chairs to Belize in 2019. Each chair is $150 and changes a life forever.<\/p>\n<p>Consider a tax-deductible donation of a chair as a birthday or Christmas present for someone. Click the photo below to check out the video of the most recent delivery to Nicaragua.<\/p>\n<p data-icontact-image-nowrap=\"true\"><a href=\"https:\/\/www.youtube.com\/watch?v=o2FJjptJhZ8\" target=\"_blank\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-19169 size-full\" src=\"http:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image1-9.jpg\" alt=\"Best Foreign Investments for a Self-Directed IR\" width=\"960\" height=\"540\" srcset=\"https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image1-9.jpg 960w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image1-9-300x169.jpg 300w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image1-9-768x432.jpg 768w, https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image1-9-600x338.jpg 600w\" sizes=\"(max-width: 960px) 100vw, 960px\" \/><\/a><\/p>\n<p><em>This article was published in the Escape Artist Weekly Newsletter on May 23, 2018. If you would like to\u00a0subscribe\u00a0to the newsletter, please <a title=\"click here.\" href=\"http:\/\/www.escapeartist.com\/subscribing-2017-mailing-list\/\" target=\"_blank\" rel=\"noopener noreferrer\">click here.<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This article was published in the Escape Artist Weekly Newsletter on May 23, 2018. If you would like to\u00a0subscribe\u00a0to the newsletter, please click here. The biggest reason to set up an international self-directed IRA is to take control of your investments and globally diversify your investment portfolio. You want to own the best foreign investments [&hellip;]<\/p>\n","protected":false},"author":238,"featured_media":19173,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","om_disable_all_campaigns":false,"footnotes":"","_jetpack_memberships_contains_paid_content":false},"categories":[3],"tags":[],"yst_prominent_words":[1815,17198,2937,9889,3054,15661,1814,1811,15659,9099,15665,5593,15662,15660,8583,1812,17199,1878,3023,3412],"acf":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/www.escapeartist.com\/wp-content\/uploads\/2018\/05\/image5-6.jpg","_links":{"self":[{"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/posts\/19168"}],"collection":[{"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/users\/238"}],"replies":[{"embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/comments?post=19168"}],"version-history":[{"count":5,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/posts\/19168\/revisions"}],"predecessor-version":[{"id":40600,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/posts\/19168\/revisions\/40600"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/media\/19173"}],"wp:attachment":[{"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/media?parent=19168"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/categories?post=19168"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/tags?post=19168"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/yst_prominent_words?post=19168"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}