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Let’s look at taking money abroad concerns  as well as Ecuador oils, book stores, shopping and more on Ecuador buses in this Saturday comments and Q&A.

#1: Is there a new 6% withholding on money sent abroad?

#2: Bank compliance dangers. Risks of being clever.

#3: Ecuador English book stores, shopping, and western size clothes.

#4: More on Ecuador buses.

#5: A good investment that fights inflation wherever you live.

#6: Essential oils in Ecuador.

#7: Reader comment on glasses half full.

#1: Is there a new 6% withholding on money sent abroad? A reader asked this question: Hi Gary,
I have a question about a recent post of yours. It was about a new US tax law where 6% of the money an expat brings with him/her to their new country will be held back by the IRS to prevent tax evasion.  If my memory still serves me, this “insurance policy” of the IRS’s will only apply to money over a certain amount.  And herein lies the gap…what is the amount?  Or better yet, where can I find the post?  I have searched your archives through October 2010 but haven’t recognized it yet.  Best regards to Merri,

I replied: I have not written about this nor have I heard anything of this nature. I’ll check it out and if there is any truth to this I’ll post a message.

I sent a note to our friend and tax attorney Joe Cox.  Joe has been helping us for about 20 years and has the following honors:

• Masters in Law in Estate Planning
• Florida Bar Certified Tax Lawyer
• Florida Bar Certified Wills, Trusts & Estate Lawyer
• Fellow, American College of Trust & Estate Counsel
• Named “One of the Top 1.6% of Lawyers in Florida” and among the “Top 34 Lawyers Specializing in Wills, Trusts and Estates” by Florida Trend magazine in 2004.
• Named “One of the Top 100 Attorneys” by Worth magazine in 2005.
• Recognized as a “Super Lawyer” — Where Only 5% of the Attorneys in the State are Named in 2007.

Joe replied: Gary:  No.  But, I will begin to inquire.  Joe

For more information about estate planning and tax contact Joe Cox at jcox@coxnici.com . Joe’s website is www.coxnici.com

I also checked with our asset manager Thomas Fischer at Jyske Global Asset Management.

Thomas wrote: Hi Gary, He might refer to the exit tax but that is actually much higher than 6% see below link: Thomas

Thomas gave me a link to tax data that says: If you have taken the far-reaching and irrevocable decision of giving up your US citizenship to permanently disconnect from your US tax obligation, you still have to settle your exit with the IRS.

Covered Expatriates and Exit Tax Threshold

The Heroes Earnings Assistance and Relief Tax Act of 2008 (the HEART Act) and the U.S. Treasury Notice 2009-85 establish the following rules for US expatriates.

The law applies to US citizens who expatriate, as well as long-term US permanent residents who give up their green cards, which they have held for 8 of the last 15 years. Both categories are subject to immediate “exit tax” on unrealized gains on all their assets in the US and worldwide, including grantor trusts, as well as on any future gifts or bequests to US citizens and residents, if any.

You qualify for the covered expatriate and the related exit tax, if you meet any of the following criteria:

• you have a net worth of US$ 2 million or more;
• you have an average net U.S. income tax liability of greater than US$ 139,000 (thereafter indexed for inflation; $145,000 for people expatriating in 2009) for the five year period prior to expatriation; or
• you fail to certify that you have complied with all U.S. federal tax obligations for the preceding five years.
Herewith, all property subject to gift tax and all property, where you hold a use right, are included for purposes of the net worth test.

The exceptions are dual nationals from birth, who have not lived in the US for more than 10 years from the last 15, and persons younger than 18½ who have not lived in the US for more than 10 years.

The tax payment is due within 90 days after giving up your US citizenship.

30% Withholding Tax

Deferred compensation items, depending on their nature, are either subject to 30% withholding tax at the moment of payment, or to be included in the personal income of the expatriate subject to exit tax. Those items, that are subject to 30% withholding tax by being a distribution to covered expatriates, are also most likely to be taxed again at the 30% rate as payments to non-resident aliens. Such treatment may cut certain pension plans and retirement accounts by up to 51% net tax.

IMPORTANT NOTE: This regulation only applies to those giving up US citizenship or green card. So far we have not seen any tax or withholding on those who expatriate funds or move their residence abroad.

#2: Bank compliance dangers. Risks of being clever.

This does not mean that there are not numerous new regulations about moving money offshore.

A reader trying to buy Ecuador real estate shared this note: This email is just for informational purposes because I believe my experience may possibly be of interest to you.  I participated in the Ecuador Living February 12-15, 2011  Cuenca Real Estate Tour and I would recommend the tours to anyone.

The situation is:  I am a United States citizen that has deposited funds into the Canadian Western Bank in British Columbia.  Last  week I faxed a Wire Transfer Request form to the bank  for a down payment on a condominium in Cuenca. Then I called the bank with questions about the form and spoke to a manager. She informed me the bank cannot release the funds until a regulatory entity approves the release of the funds. The Canadian government has a list of countries it doesn’t want funds sent to;  Ecuador is on that list.  The manager then told me I had  to complete another form that could be completed by answering questions she would ask by telephone.  The questions noted below were some of the questions (as  best as I can recollect) with respect to the second form:
a.  What do I plan to do with the funds in Ecuador?
b.  Do I plan to live permanently to Ecuador?  If so, why?
c.  Will  the condominium  be my primary residence, 2nd home, rental?
d.  What was the source of the funds I initially deposited into Canadian Western bank?
e.  Why did I deposit funds with Canadian Western bank initially?
f.   Did I investigate the attorney handling the sale?
g.  How do I know the attorney is honest?
h.  Will the wired funds be put into a trust until the sale is  completed?  If the funds are deposited into the attorney’s account how do I know  he won’t steal  the funds?
i.   Why isn’t a title  company handling the escrow?

The bank doesn’t dispute the funds are mine.  I was asked many  intrusive questions. The bank manager told me  one purpose for the questions is money laundering, another reason is because the government disapproves of Ecuador therefore a determination will be made if the funds will be released to wire to Ecuador.

Also, I asked the manager if 30% of the funds will be with-held per the request of the United States government.  She said yes, but she didn’t know if it would be 30% of the withdrawn funds or 30% or the total funds on deposit. That was when she asked why I deposited the funds in Canada.  I told her it was because many U.S. banks are not financially sound and the FDIC won’t release their names therefore I don’t know if my bank is financially sound.  Also, that I have read Canadian banks are rated as among the safest in the world.

The manager requested I call her Tuesday, February 22  if the wire isn’t received into the Cuenca attorney’s account Monday.

Gary’s Comments: We’ll have more about compliance issues in upcoming messages. I doubt that this transaction as described will create a 30% withholding. This does not mean that the bank manager understand the correct law.

This particular issue appears on the surface to be a growing phenomenon I call compliance confusion.  There are so many global rules and regulations now that no one can understand them all.  The penalties for not complying are so harsh that the knee jerk reaction of ignorant, untrained, or just not alert compliance officers is to freeze everything and not do anything. I have seen this again and again… when someone at numerous types of institutions … trying to cover his lack of knowledge… freezes funds and inhibits a perfectly normal legitimate transaction. I have had this happen myself and will go over these issues in more depth in a separate message.

#3: Ecuador English book stores, shopping, and western size clothes. This reader asked: Dear Gary,  For those of us living in Ecuador, can you name a few good bookstores and their addresses? For those who want to read (in Spanish), or to purchase quality reference books, on any subject, where are the real bookstores? Surely there are a few in Guayaquil or Quito or Cuenca or Manta or Loja, etc.?

The same goes for a natural health care product stores with quality vitamin and mineral supplements. Are there any? If so, where?

Finally, for those of us of northern European ancestry, finding men’s shoes in the larger sizes is a big problem. Can you name some stores in Ecuador that carry the larger sizes? And that don’t charge exorbitant prices for them? And also, men’s clothing n the larger sizes?

Mind you, in both cases I am not looking for Gucci shoes, or Armani power suits. I can`t afford that type of apparel. I am talking about off the rack shoes and shirts and pants, that don`t cost an arm and a leg, or have to be tailor made. I am 6 feet thee inches, one hundred and ninety pounds, which practically makes me a giant compared to most Ecuadorean men.

Bonnie Keough, Ateam Ecuador, fielded this question.

I have been in many bookstores in Quito, unfortunately I don’t have the addresses.  However, a quick search on google brings up lots of information including the following.  Note, these two stores are in the Mariscal Sucre area which we do not recommending visiting.  If you go, I would recommend only visit in daytime and use a taxi.  There are also a few stores between the Suisse Hotel and the Hotel Quito.

Quito Bookstores: Confederate Books is undoubtedly the best used bookstore in Ecuador. The gregarious owner Tommy Savage buys and sells used books in every category from science to biographies to fiction. He also has a small collection of French-, German-, and Spanish-language books. Additionally, he sells new Abya Yala publications (which focus on Ecuadorian indigenous groups).

This little corner bookstore, located in the heart of New Town’s Mariscal Sucre district, is a good place to come not only to swap and buy novels but also to have a glass of wine and a chat with Tommy, a New Orleans native. He is an enthusiastic source of what to do and where to do it in Quito. He also changes traveler’s checks and damaged dollars (possibly the only person in all of Ecuador to regularly do so) at rates comparable to those of local banks. As an ardent collector of unique beer cans and bottles, he may even give you a free book if you bring him something out of the ordinary.

Open: Monday through Saturday 10 – 7pm. In the summer he is occasionally open on Sundays. Located at Calama 410 y Juan León Mera. Phone number – (593 2) 2527890. Email – tommyisl@hotmail.com.

Libri Mundi, in La Mariscal on Juan León Mera between Wilson and Veintimilla, is the best place to buy new books in Quito. They have an extensive collection of books in Spanish, as well as modest selections of books in English, French, and German.

I’ve purchased maps at Libri Mundi, very interesting store.

Open: Monday through Friday 8:30 – 7pm, Saturdays 9 – 1:30, 3:30 – 6:30pm.

I’ve also started collecting Ecuador Infinito magazine.  Each beautiful issue has stories in both English and Spanish and is loaded with wonderful photographs.  I’ve seen them for sale at Olga Fisch Gallery, Supermaxi and other places.
There are also decent bookstores in Quito’s new shopping centers, El Jardín and QuiCentro.

Camari in Quito is like a small version of Whole Foods, I love poking around in the store.  They have everything from essential oils to quinoa spaghetti.  Also, there’s a great deli and wine shop next door and a wonderful market across the street.

Full Name:    Camari, Quito, Ecuador
Opening Hours:    Mon-Fri 8.30am-6.30pm; Sat 8.30am-1.30pm
Address:    2-38 Marchena & Versalles, Santa Clara Market, New Town
Directions:    Taxi

Contact Details:    Camari Phone:    +593 (0) 2 254 9407 begin_of_the_skype_highlighting    +593 (0) 2 254 9407

Haven’t done any shopping for men’s shoes, but on more than one occasion I have brought shoes to Ecuador for my friends. My suggestion would be to order online, have them sent to a friend or relative’s home and they can bring them to you when they visit.

You could do the same with clothes, men’s jeans, pants and shirts are easier to shop for than ladies clothing.  I often bring jeans, tee shirts, socks, etc. down for folks.

Our tailor in Cotacachi makes men’s shirts and pants, casual or dressy and his wife makes lady’s clothing.  His prices are very reasonable.  I’m sure every area has a tailor.

Also, there is a boot factory in Cotacachi, they could probably make shoes in larger sizes for you at a good price.

As a last resort, Quito has several large malls which have the types of stores that all malls around the world have.  You could probably find clothes, shoes and books there.

Best regards,  Bonnie

My Note: Ecuador offers incredible cost of living bargains but not for imported goods.  US style shoes… clothes do cost more than in the USA.

#4: More on Riding Ecuador Buses. A reader who lives in Cuenca wrote: HI Gary,  Thanks for your notes and articles.
Here is my experience with buses. I just took a trip from Guayaquil to Bahia using the bus line La Reina. It was about a 4 hour ride. Reserved seats, few stops, air conditioned and they played 3 movies. Quite enjoyable and all for only $7. You are correct that you have to be careful of the bus line you select. On my return I used another bus line and though no problems the frequent stops and overcrowding was annoying. Take care,

#5:  A good investment wherever you live. Numerous readers have asked: What will happen in Ecuador if the US dollar falls?

Gary’s Comments: I spoke about this last weekend before over 400 delegates at International Living’s Ultimate Event.  The answer is inflation. We can already see it coming.  The cost of living in Ecuador will rise.

I explained to the audience that a New Sucre was unlikely but if so…

•A New Sucre is Good for those who earn in US dollar if it happens
•A New Sucre Value Will Likely Fall Versus the US Dollar
•A New Sucre Value is Not Likely to Rise Versus the US Dollar

One solution to inflation I recommended to the audience is the  WisdomTree Dreyfus Commodity Currency Fund (CCX) Exchange Traded Fund ETF.

Inflation will make commodity prices rise. Higher commodities will help strengthen the currencies in countries that are commodity rich.

This returns money market rates in commodity-producing countries and changes of currencies vs. U.S. dollar. Currencies at launch: Australian Dollar, Brazilian Real, Canadian Dollar, Chilean Peso, Norwegian Krone, New Zealand Dollar, Russian Ruble and South African Rand.

This fund is invested in very short-term, investment grade instruments.  This is not a “money market” fund and it is not the objective of the fund to maintain a constant share price.

#6: Essential oils in Ecuador. Our friend Candace Newman… The Essential Oil Lady sent this note:  Gary I just wanted to let you know one of your clients contacted us to see if we would ship to Ecuador. I have the shopping cart configured to include Ecuador. I have sent a message to the client also to confirm.

Learn more at Ecuador Shamanic Health Tactics

#7: Reader comment on glasses half full. A reader shared: Gary,  I thoroughly enjoy every email I get from Ecuador Living and appreciate every article you write.

I have to make a comment about a recent article about your seeing the glass always half full. Or, I think you put about stepping in manure… I’ll make this quick because I know you are a busy man. However, I know you can use this visual in some fashion…..

There were two boys that woke up on Christmas morning. They step outside their home and both of the boys step in a big pile of manure. One of the boys start complaining about the smell of manure on his shoes and how messy it was. The other boy is so excited. He is jumping up and down and yelling at the top of his lungs… Where is our new horse? He was so excited about getting a horse for Christmas that he didn’t care about stepping in the manure or the smell that went with it.

I just had to share this story with you! Within the next year I will make that journey to Ecuador and I hope I get the opportunity to meet both you and Merri! Thanks for all you do! Sincerely,

What a great story!  Until next message may your cups be full and runneth over!


Blaine Watson Vedic Astrology – Investing & Business Beyond Logic Course.  April 9-10, 2011 at the Lakeside Inn, Mt. Dora Florida.

lakeside inn

Lakeside Inn… Mt. Dora.


Blaine Watson Teaching at our hotel in Cotacachi.

Blaine has conducted his Vedic Astrology – Investing & Business Beyond Logic Course at our home in North Carolina, at our hotel in Ecuador and will conduct the next course in Mt. Dora Florida.

April 9-10, 2011. $599

Couple $799

Inspired Investing Beyond Logic

Where do mystery, science and market movements meet?

Those who can answer this intriguing question probably understand the quantum aspects of existence. Quantum mechanics is the part of science that tells us that our world is not anything like we expect or can even imagine. The quantum state is the world where our intention turns energy into matter. At the quantum level everything comes from nothing. The present, future and past are one. Atoms spin up and down at the same time but when observed, choose a direction to spin depending on the universe we are in.

In short our quantum existence is impossible in logic. Yet it is a proven fact.

Quantum science also helps us understand astrology. If our intention can alter the movement of minute particles separated by billions of relative miles, so too can the movement of huge particles that swirl around us impact our lives.

This is why Merri and I have used Vedic astrologers for years. We have found them invaluable when it comes to making decisions about health, wealth and family that we cannot make with logic.

Rather than try to explain or defend the science of this, let me just share a few ways that Vedic astrology has helped us.

A recent example took place when our daughter Elle graduated from University in London with a degree in dramatic arts. Her question to Merri and me was: “Should I go for a career in singing or go on and get a teacher’s certificate in Physical Education?” (She is a superb athlete as well as an aspiring singer.)

We all agreed that becoming a singer was a long shot. Teaching was safe. But we knew that her passion was to shoot for the stars. So how would she feel in later life if she didn’t try?

Merri had our Vedic astrologer check her chart. The astrologer knew nothing about Elle but said that two months before we had asked, she had moved into a three year cycle when her best thing would be the performing arts, entertaining, etc. That was enough to convince me. “Go for it”, we encouraged her.

She did and within a week she was picked as a backup singer with a popular English rock group. Her first gig was before 4,000 fans and she met rock stars she idolized. This led her into a performing arts business where today still in her twenties she is already earning six figures a year. No one could have predicted the amazing ride she has taken. None of us saw this coming from the risky choice.

Without that reading, we would have felt more inclined to have her take a “safer” route. What a shame that would have been!

All we saw was that there was good potential at this time, and potential is what quantum science is all about. Every second of our hidden universe is composed of infinite potential. But that potential is hidden from our logic. Vedic astrology helps us figure this potential out.

In another case another daughter had finished university and was successfully employed as a fisheries biologist for the Bureau of Land Management. She wanted to go back to school and become a veterinarian. This meant a long hard four-year slog and sacrifice for all. Should she do it? Her chart suggested that this was perfect for her so she tried. Doors opened like magic. She was one of 23 accepted from over 300 applicants. Financing appeared in unexpected ways and she breezed through the four years. She is now a successful, joyfully happy vet. This was her perfect place. The astrologer saw this and he was right!

The inability to measure the results of astrology used to bother me enormously until years ago I read an article about Aristotle Onassis. He was asked about his use of astrology. His reply was that to be a millionaire, astrology wasn’t really needed, but to become a billionaire, it was essential!

This struck a chord as I lived in Hong Kong and saw the most successful businessmen there (often billionaires) look beyond logic.

To make billions one has to take enormous risks. Taking such risks require us to see in ways that go beyond our logic, reason and understanding.

Merri and I started using Vedic astrology years ago. I do not use it to make day-to-day business decisions. Most things get worked out with logic and thought. But astrology provides an overlay in my business and life, gives me a sense of when to push, when to pull back, when times are ripe and when they not.

Merri and I review our charts once a year with our friend and advisor, Blaine Watson. Blaine has been studying astrology since age nine and practicing Vedic Astrology for 25 years and professionally for 18 years. He received certification from Benares Hindu University in Varanasi, India and has over 7,000 clients in 41 countries.

Here is Blaine Watson and Vaidya Mishra teaching at our farm.


Blaine has been amazingly correct with my and Merri’s charts.

Sometimes I am astounded with little points that are no big deal. For example, last year he said my chart showed that beginning February 27, I would have such strong opportunities in business that people would give me property. I really did not believe this. On February 25 the owner of www.garyscott.com, a site I had troubles with wrenching this site back …(although it was my site, over the years another group had taken it ), I received a note saying he felt he should give it to me! I accepted and he made the transfer on…you guessed it, February 27.

Other times, what my charts says is important because it gives me encouragement. For example a number of years back my chart showed problems with government authorities.

Sure enough a two-year tax audit ensued, beginning almost on the day predicted. However I was told even though this trouble run for over two years it would bring me money and this suggestion was right! I received two refunds (I had been overpaying), the first was over $70,000 and one later for $44,000. This amounted to over $114,000. The refund was nice but more importantly the knowledge during the two year process that the potential for the audit to end well was encouraging.

Another year Merri’s chart showed she was in a long period where people would just give her valuable things including land and houses. That knowledge helped us make the decision to buy our farm here, despite the fact it had not been surveyed. The survey turned up 31 acres more than expected. We received this great gift free! Another year my chart suggested I should reduce my equity load. This matched my logical concerns about an inflated stock market. Thus I was 90% in bonds when the US stock market bombed.

I could go on and on with such stories.

Vedic astrology helps me in several ways. First, its overall readings point out the areas that will bring greatest success. For me it’s writing, publishing and communication (surprise-surprise), plus real estate and liquids and gas. Further my annual updates show which of the areas will work best that year and when to push and when to rest.

So I am especially alert to opportunities in these fields. For example though I generally avoid investing in shares, I bought shares in a Singapore company Hyflux which is in the business of purifying water in China. I did my logical due diligence before investing in those shares but it was the liquid aspect that first attracted my attention. I am currently also heavily researching investment opportunities in biodiesel (liquid and gas).

Vedic astrology gives me very exact investing and business knowledge, but deeper still, confidence, clarity and a calm that come from knowing that all things are in order even when they do not seem to be. This along with prayer, faith and conviction are guides at times when there is no other way to know.

This has been a very deep personal experience for me, Merri and my family so I am pleased that I can on occasion convince friend and Vedic astrologer, Blaine Watson, to give a course (which includes a personal reading for each person in attendance).

Blaine will teach all the fundamentals of Vedic astrology so that course participants will come away with a sense of familiarity and comfort with the science and be able to follow their own horoscopes at home.

The course includes an overview of the science. Then you will learn a detailed description of the chart, how it is laid out, the significations of the planets, the 12 signs, the 12 houses, the 27 nakshatras or as well as an explanation of the planetary cycles (dashas) and transits (gochar).

You learn how to look at your chart and understand what is influencing you each day. Blaine will also give you your own reading and a computer print out of your horoscope so you can follow it during the course.

Join us and learn how to see beyond logic.



Blaine reviewing charts at a course for our readers.

Blaine Watson Course

April 9-10, 2011. $599

Couple $799

Inspired Investing Beyond Logic

The Florida seminars are taught at…


Mt. Dora’s Lakeside Inn listed on the
 National Historic Register, that has continuously 
operated as an inn for more than 125 years, 
the oldest operating inn in Central Florida.

lakeside inn

The Lakeside Inn is located 40 miles Northwest of Orlando
 in Mount Dora… our Florida shopping town and known as 
the “New England” of Central Florida.


Lakeside Inn reception area.

Blaine Watson Course. Lakeside Inn Mt. Dora.

April 9-10, 2011. $599

Couple $799

Inspired Investing Beyond Logic