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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER
Your Link to Freedom, Privacy & Prosperity in the Offshore World
Wednesday, November 19, 2003 - Vol. 5 No. 137
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In This Issue:
* COMMENT: The French Leaseback
* OFFSHORE: Bermuda Independence? HSBC Vote. Bahamas Taxes. Swiss Help Russian Probe. Cyprus Ups Taxes. South Africa Investment Up. Hong Kong Yuan Services. Australian Business Leader Scandal.
* WEALTH: EU Fails Audit Again. Aussie Real Estate. God & Growth.
* PRIVACY & RIGHTS: Patriot Act Kills Privacy. New Spy Law. UK Spies.
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Guest Commentator is Lief Simon, editor of Global Real Estate Investor.
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COMMENT: The French Leaseback
Dear A-Letter Reader:
I've discovered a real estate investment opportunity that combines diversification, safety, tax advantages, inflation protection and asset protection-and doesn't require much capital to get started. Best of all, your income from this investment is actually guaranteed by the French government!
Through this program, you can purchase qualifying property in France free of value added tax (19.6% in France; so a US$100,000 property is discounted immediately to US $83,600). And you can take out up to a 20 year mortgage for up to 95% of the purchase price at a fixed rate of interest of 6%. While leverage this high is commonplace in the USA, it's virtually unheard of in Europe.
France is one of the world's top tourist destinations, and receives more than 75 million international visitors each year...plus the French themselves typically prefer to vacation in France. Because there is a chronic shortage of short-term rental accommodations in France, the government offers a package of incentives to investors and developers of such projects.
Properties under this scheme run from US$50,000 for a studio in the Pyrenees to more than US$1 million for a villa on the French Riviera. And, since qualifying properties are in the most popular areas in the country--Paris, the Riviera and the Alps-they have excellent prospects for capital appreciation.
You own the property outright...but you agree to turn it over to a property management group for rental for a fixed number of years (typically nine). In return, you are guaranteed a net return after all management and operating expenses have been deducted. This return can vary from 4.5% to 6% depending on the development and the location.
These are real returns, indexed to construction costs. In other words, each year, as construction costs increase, your cash receipts increase as well. If construction inflation is 10%, your pay out will go up about 10%, too. Your return is evaluated each year. The worst case scenario is that you always get your original guaranteed return.
Depending on the project, you may have the right to use the property yourself for two to four weeks each year. But some developers don't allow owner use at all, so this is an important point to clarify up front. However, guaranteed returns generally go down the more weeks use you're allowed.
Asset protection? No one will try to sue you in France for your property. The French bureaucracy is difficult enough if you are French. Plus, although no one will know you own the property unless you tell them, for tax reasons you may wish to own the property through a corporation.
The biggest advantage of the Leaseback Program is how easy it is. The management company handles everything. All you have to do is designate the bank account where you want your rental income checks deposited.
After nine years, you can do what you want with the property; renegotiate with the management company for a higher pay out, rent the unit yourself, or sell the apartment. (Actually, you can sell the property before nine years have elapsed.but the new buyer is just subject to the remainder of the lease period.)
All in all, the French Leaseback is a virtually hassle free, almost no-risk investment--perfect, if you're making your first plunge into international real estate.
Lief Simon
Editor, Global Real Estate Investor
LINK: http://www.globalrealestateinvestor.com/
PS: I've written a report on the French Leaseback Program, that walks you through the process of finding, evaluating, and investing. To find out more, send e-mail to: lgalvin@internationalliving.com
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Comment LINKS:
* French real estate attorney. LINK:
http://thinkparis.com/guides/Q_A/question.cfm?Type=legal&Bio=yes
* About living and working in France.
LINK: http://www.escapeartist.com/embassy30/france.htm
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* OFFSHORE *
INDEPENDENCE FOR BERMUDA?
HAMILTON: The PLP government supports independence from the
UK in principle; but do they have the will to act; and how to do it?
LINK: http://www.bermudasun.bm/archives/2003-11-14/01News02
* Shareholders to vote on HSBC-BoB buyout in February. LINK
http://www.theroyalgazette.com/apps/pbcs.dll/article?AID=/20031118/BUSINESS/111180054
* THE BAHAMAS mulls its future taxation policy. LINK:
http://www.thenassauguardian.com/editorial/317500260465597.php
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SWISS AID RUSSIAN INVESTIGATION
ZURICH: Swiss open probe against another Russian tycoon. LINK:
http://www.swissinfo.org/sen/swissinfo.html?siteSect=105&sid=4459126
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CYPRUS TAXES OFFSHORE CORPORATIONS
And they claim they love it? Who are they kidding?
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=14094
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SOUTH AFRICAN INVESTMENT ON THE RISE
CAPE TOWN: Up by more than 8% in the first half of 2003.
LINK: http://www.mg.co.za/Content/l3.asp?ao=23646
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HONG KONG TO HAVE CHINESE YUAN SERVICES
But yuan will be introduced over time, not now.
LINK: http://sg.biz.yahoo.com/031118/15/3fz9b.html
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AUSTRALIAN BUSINESS LEADER IN SCANDAL
SYDNEY: Kennedy accused of misuse of offshore accounts. LINK:
http://www.theadvertiser.news.com.au/common/story_page/0,5936,7912817%5E462,00.html
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Ex-reporter and media expert Ian Cooper made investors 33% in
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--M.C., Harrisburg, PA
LINK: http://www.agora-inc.com/reports/EVS/WEVSDB13/
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* WEALTH *
EUROPEAN UNION HEAL THYSELF
BRUSSELS: The EU tells everyone how to conduct their
financial affairs -- but for the 9th year EU accounts fail audits.
LINK: http://news.bbc.co.uk/2/hi/europe/3279675.stm
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AUSTRALIA: IN REAL ESTATE THEY TRUST
SYDNEY: Prime real estate is owned by listed property trusts,
or LPT's, the local equivalent of real estate investment trusts.
LINK: http://www.iht.com/articles/118081.htm
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GOD AND MAN AND GROWTH
Is there a connection between religion and national economics. LINK:
http://www.economist.com/finance/displayStory.cfm?story_id=2208914
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NATIONALIZE GOOGLE?
Google as a public utility? No Results in This Search for Monopoly.
LINK: http://www.cato.org/tech/tk/031114-tk.html
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* PRIVACY & RIGHTS *
PATRIOT ACT; SHOW US YOUR MONEY!
Feds spy on your finances. But does it help catch terrorists?
LINK: http://www.reason.com/0311/fe.jb.show.shtml
* US insurance giants asked to scan files for terrorism suspects.
LINK: http://www.miami.com/mld/miamiherald/business/7277705.htm
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GOVERNMENT SPY LAW TAKES EFFECT
"Snoopers' charter" becomes law - your phone calls, Net use, e-mails.
LINK: http://www.silicon.com/0,39024729,39116907,00.htm
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BRITISH SURVEILLANCE
English are the most spied on people in the world.
LINK: http://www.cbn.com/CBNNews/News/030501a.asp
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AMERICAN CONSERVATIVES CRACKING UP
Will libertarians leave the Cold War coalition?
LINK: http://amconmag.com/11_17_03/cover.html
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* THE SOVEREIGN SOCIETY OFFSHORE A-LETTER. *
Bob Bauman, Editor * Daniel Aponte, Jr. Research Asst.
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