Welcome to 2023.
As you push ahead into this New Year, one of your priority resolutions should be to diversify your life beyond your home borders.
Specifically, what should you be thinking about for 2023?
You could plan a scouting trip to see what opportunities you can find in a country where you like spending time…
Make a new investment overseas…
Or open a new offshore bank account.
Top of my list for 2023, for example, is finding a new bank account in France.
How To Choose An Offshore Bank
Our bank in Paris of 18 years closed our accounts in 2022. They decided to move from retail banking to private banking. Then, without asking if I’d like to continue as a private account holder, they unceremoniously closed both of my current accounts.
We need an operating account in France to pay local bills for our apartments. It’s not a lot of money flowing through for a bank that wants a minimum of 100,000 euro on deposit and requires you to commit to their investment services.
That’s the first thing to understand about offshore banking. You have two options—local retail banks and private or investment banks. The latter require large amounts on deposit and are more than you need if the intended purpose of the account is simply to pay local bills.
The intermediary option I found for Europe was N26. It’s an online bank out of Germany that will open an account for you if you have an address in one of the countries where it operates, which is mostly in Europe.
I’ve been able to use that account to pay my Paris bills for the past several months, but quirks of the French system require a French bank account if I want (as I do want) to set up direct debit to pay French property taxes. I’m told that it is technically illegal to demand I use a French account for this purpose, but I’m not interested in a battle with the French government.
Hence the need for a new account in France.
Operating accounts are a function of where you need to pay bills, but an investment account is a different story. Most investors looking to move money offshore look first to Europe. The challenge across that region is finding a bank that will take North Americans and that doesn’t require a million dollars or more on deposit.
The bank that ousted me in France requires a minimum of but 100,000 euro on account, as I’ve mentioned, but, even if I were to ignore their treatment of me and my accounts, their customer service has always been poor and their offerings are limited.
I’m better off moving on.
I know of a few other private banks in France with minimums of 250,000 euro, including the private banking side of large international banks like Societe Generale, but they don’t make it easy for a North American to open an account.
Is Switzerland Still A Top Choice?
Switzerland, specifically, has been an historic go-to for an offshore investment account. Decades ago, banks in this country had minimum account requirements of US$3 million.
Inflation adjusted, that would mean US$5 million or more today.
Fortunately, that’s not a current typical minimum. You can open an account in Switzerland with US$1 million, but that’s still more than most people have or want to place offshore.
Fortunately, one money manager I know, WVHP in Switzerland, offers a 250,000-euro investment option that gets you a bank account. They are registered with the SEC and provide full investment services for non-U.S. markets.
This is an excellent investment banking option. You can get in touch for more information here.
If you’re not interested in moving your money to Europe, you have private banking options in Asia and Latin America with similar minimum account balances… figure US$250,000 or the local equivalent.
Trouble is, I haven’t found a bank in those regions that I’d trust with that much money. I continue to look. My focus beyond Europe is Singapore.
My Top 3 Property Picks For 2023
On the investment side, my focus, as you know if you’ve been reading for any time, is real estate.
I’ve spent 25 years building a diversified portfolio that includes short-term and commercial rentals, agricultural investments, and land in 13 different countries.
This time of year, I take stock of my holdings and identify a specific target for adding to them.
In 2022, I bought in Northern Cyprus.
My target for 2023 is likewise Europe. I continue to work to increase my passive euro income.
Spain is back onto my radar. Here I’m shopping for a residential rental.
I first invested in Spain in 2000, when I purchased a preconstruction condo in Estepona. I’ve since made two agriculture investments in this country. I am thinking this year it’s time for another coastal condo. The complication with Spain is that it’s a big market. Many options to consider. My focus is the Costa Calida area.
Montenegro remains on my radar. I didn’t get to visit last year as I’d hoped to, but I’ve been building my on-the-ground network and educating myself on particular opportunities.
Montenegro is on a path to EU membership, but when that will happen is uncertain. Perhaps by 2025, which is why I’m intensifying my search this year.
Montenegro has used the euro since its inception. This removes currency risk for me. I’ll be investing with euros. I’ve worked for more than two decades to generate investment capital in multiple currencies. This is a payoff of that strategy.
A tiny country on the Adriatic, Montenegro is an outlier. Most people have never heard of it. If you don’t know this market, heads up. It offers the potential for double-digits rental yields… and you can take a position for less than 100,000 euro.
My current favorite opportunity in Montenegro is this one.
A real estate investment in Montenegro could address two points of diversification this New Year. Buy property in Montenegro and you’re automatically eligible for legal residency in the country.
During the pandemic, everyone who didn’t have more than one residency or passport wished they did. Our second passports and backup residencies allowed me and my family to travel between Europe, the United States, and Panama fairly easily even when the world was largely shut down.
Now that the world has reopened, don’t become complacent. You still need residency options and you’ll want them in place before the next global crisis… whatever and whenever that may be.
Colombia offers an ultra-accessible back-up residency option. The investment and time-in-country requirements are some of the lowest out there. You can get temporary residency with an investment of as little as US$85,000 and you only need to be in the country once every six months to maintain your residency status.
Make an investment of US$160,000 in Colombia and you can qualify for permanent residency. This reduces your required time in the country to but once every two years.
Colombia boasts an abundance of natural resources and strong food production. Getting stuck in Colombia during a global crisis wouldn’t be a bad thing.
Alternative Hard Assets
Top of my 2023 investment to-do list is diversifying into alternative investments.
For several years, I invested in French wine primeurs. These are vintage pre-sales. You receive your wine when it’s eventually bottled. I like making money… and I like drinking wine. This allowed me to do both those things.
Some wines I bought are worth well more than double what I paid for them. Average annual appreciation probably didn’t hit double digits, but I have a full cellar of wine worth much more than I paid… and that I can serve (along with the interesting story of its provenance) when friends come to visit.
This year, I’m turning to art.
Art continues to be one of the best appreciating asset classes… if you buy well.
Fortunately, a friend of my daughter’s works for a gallery in New York City and has offered to help. I’ve also been introduced to a gallery in London that manages art portfolios for investors.
I’ll let you know what I decide to buy.
Meanwhile, good luck with your own diversification endeavors in 2023.
Lief Simon
Editor, Offshore Living Letter
