It’s not often that major developments occur in Southern Europe in the month of August. Montenegro’s announcement of its new instant second passport by investment program this past week is an exception.

Perhaps the Montenegrin government hoped to avoid the inevitable backlash from certain nationalist and socialist politicians in the European Union, while attracting the attention of wealthy Americans, Russians and Chinese at whom the program is aimed.

Montenegro has just become only the third state in the world to offer an economic citizenship program, along with the Caribbean island nations of St Kitts and Nevis and the Commonwealth of Dominica. Austria has a similar program with a few more strings attached, while Paraguay, Uruguay and the Dominican Republic are known for their relatively liberal grants of second citizenship after a period of residence. (More information on citizenship by naturalization programs.)

Montenegro is the youngest country in modern Europe, having voted for independence and achieved international recognition in 2006. However its history dates back to Byzantine times. (See Wikipedia entry on Montenegro)

Since independence, Montenegro has boomed, fuelled by a surge of foreign offshore investment… to date mainly from wealthy Russians who have felt comfortable with its Slavic culture, stunning coastline, visa-free travel to the European Union, and confidential offshore banking regime that has been substantially cleaned up following some scandals in the 1990s.

By launching an official economic citizenship program, however, the government of Montenegro hopes to attract investors from further afield, by co-operating with international law firms, trust companies and offshore service providers. We don’t doubt they are taking aim at the huge Chinese market, as well as the increasing flow of Americans who – spurred on by policies like Obamacare and the HIRE Act – are looing to renounce US citizenship for tax, privacy and asset protection reasons.

The new Montenegro economic citizenship program will require an investment of at least EUR 500,000, some of which goes direct to the Montenegrin Treasury and the rest of which must be used to generate business and employment in Montenegro.

Although the announcement is new, insiders have been suspecting for some time that Montenegro passports were available to prominent wealthy investors. One of the most infamous to date is former Thai prime minister Thaksin Shinawatra, who now travels on a Montenegro passport. Mr Shinawatra was convicted in absentia in his homeland on corruption charges, but denies all the charges against him and has announced plans to invest in Montenegro, possibly in some of the luxury hotels along the coast where he has reportedly been staying.

Details of this new second passport program are not yet entirely clear, except that it will be substantially more expensive than established competitors such as the St Kitts and Nevis program that also offers its passport holders visa-free travel to the European Union.

Rest assured however that we at Q Wealth will be monitoring the situation closely and we are already in contact with the government of Montenegro with regard to an interview and citizenship FAQ for the autumn Q Wealth Report. If you are not yet on our free e-mail list, sign up now to receive updates.

One of our familiar themes here at Q Wealth is the decline and devaluation of the dollar – and how you can not just protect yourself against it, but actually turn it to your profit!

Devaluation was brought one step further last week by the latest round of currency controls on the US dollar introduced in the new HIRE Act.

Some people have written that these restrictions do not in fact amount to back door currency controls. We agree to an extent – they are not traditional exchange controls like we still see in some countries like South Africa or Brazil. But they are very much currency controls nonetheless. They amount to just one part of the stealth devaluation we have frequently talked about (see related links below).

Recently, legendary guru Marc Faber wrote that printing money represents a silent way for governments to default on their debt. When a government openly defaults on its debt, says Farber, the workout process is reasonably equitable.  But if a government devalues silently by printing, the burden of the default isn’t shared equally. Those who hold more of the currency being devalued, in this case US dollars, are disproportionately hit. Inevitably those hit hardest are not big sophisticated international investors, who have hedged their risk, but small investors who have simply never thought of hedging against currency risk.  That means, for example, average Americans who have savings in their retirement accounts.

Very few Americans have had the foresight to move their IRA assets out of dollars. Yet it’s something perfectly legal and quite easy to do… at the moment! The restrictions in the HIRE Act will make this much more difficult because they simply make it very difficult to transfer money abroad.

Yes, there are exemptions. The HIRE Act does not in theory impose any tax on an American who transfers his or her own money, to a foreign account in his or her name.

But, there is a big but, banks around the world will be running scared of the regulations. First of all, foreign banks won’t want the US account holders in the first place. Secondly, US banks will be desperately trying to cover their liability by checking the exact purpose of the payment, to make sure it doesn’t come within the scope of the legislation. The burden of proof will naturally pass to the account holder who is trying to transfer money, to demonstrate that the transaction is not subject to the new withholding tax. If the sending bank in the USA has any doubt at all about the purpose of the transaction, they will be forced to deduct 30% tax.

Net result? It is going to be darned difficult for anyone to transfer money out of the USA. If that isn’t a form of currency control, then I don’t know what is!

Faber is predicting that US Treasuries will collapse, sending yields up to a range of 10 percent  to 20 percent during the next five to 10 years, as inflation and supply explode.

Here at Q Wealth our intention is to keep you informed and provide actionable things you can do to protect your savings and your future. Right now, you can still transfer assets legally and openly out of the USA into offshore structures, offshore investments, and offshore banks where your assets are better protected – but for how much longer? I would give it until the end of this year, if that.

Right now, US citizens can legally acquire a second citizenship and passport, and legally avoid taxation on their worldwide income. But it is getting harder.

Where the US leads, the UK, the euro zone and Australia will follow. Subtle, hidden currency controls like this will become the norm in the developed world, particularly the OECD countries. We will continue to expose them while we can. And we will continue to provide real solutions, especially to our paying members. If you are not on our mailing list for the free weekly Q Bytes newsletter, and this matter concerns you, then sign up today for Q Bytes! And if you would like to know what you are missing if you are not a paid-up member of Q Wealth, please see Why Join Q Wealth?

Many of our readers are interested in offshore investing and offshore investment funds, and they frequently contact us for advice. The question we are most frequently asked is: Do high yield investment programs really exist?

In this article we look first at offshore investing scams and how to avoid them, then we will move on to the topic of genuine alternative offshore investment opportunities that can legitimately generate high returns for investors.

Of course,  programs referred to as HYIPs (High Yield Investment Programs) do exist, but most of them are scams – or more specifically ponzi schemes. There are internet HYIPs where you can invest $10 and get $20 back the next day. And there are more sophisticated scams, involving complicated terminology like ‘bank debentures’ or ’standby letters of credit’. There are whole websites dedicated to scam concepts like ‘offshore fund leasing.’ People frequently lose hundreds of thousands of dollars to these more sophisticated rip-offs. Such funds, once lost, are almost impossible to recover.

One of the ironies about such deals is that the scammers often claim that they are making money with exotic named things inter-bank trading, seasoned notes, and other mysterious offshore financial instruments… some so secretive that ordinary bankers don’t know they exist!

Years ago we used to ridicule such ideas. We used to say that the bankers didn’t know about them simply because such things don’t exist. But the last few years have proven us wrong – there are indeed weird things going on behind the scenes that most bankers don’t understand or even know about! For starters, most bankers don’t seem to realize the facts about the giant Federal Reserve scam, a privately-owned company, printing money backed by nothing, that is responsible for the devaluation of the dollar. And very few bankers understand or have even heard of the mysterious forex operation CLS Bank that settles around $5 trillion worth of transactions every day. The lesson here is that all good scams have an element of truth.

But, here at Q Wealth we like to accentuate the positive. So let’s rephrase the question a bit. Are there any legitimate offshore investment funds where you can make say 10% or 15% return with little risk? The answer is yes, such opportunities do exist. But it does take some work to find them. And once you find them, you should be prepared to dedicate some time to monitoring them.

The general rule is that the higher the rate of return, the higher the risk. Some people are happier than others to accept risk. For example you might dedicate a small part of your investment portfolio to high risk ‘play money’. Younger people can generally afford to accept a higher degree of risk than persons approaching retirement. Absolutely the worst thing you can do, of course, is to put everything into one offshore investment because the worst can always happen.

So where do you find such opportunities? In Q Wealth Report of course! We are constantly on the lookout for genuine investment opportunities and funds that have the offshore advantage. What is the offshore advantage? Since there is no tax deducted at source and no automatic reporting, you can often roll over profits and reinvest them, rather than paying tax on the income. Over a period of five or ten years, the compounding effect can be huge.

The rule of thumb is that with onshore investment funds you might take three steps forward, then two steps back as the tax is deducted. With offshore investing funds, you take three steps forward, then the next year you take three steps forward again… and so on, and so on.

In our flagship Q Wealth newsletter, we frequently spotlight offshore investment funds and opportunities that we have done full due diligence on. There is always a risk, but we can help you minimize it. Since the investments we feature are generally managed offshore, you can participate as a sophisticated investor or via your offshore corporation, foundation or IBC.

Frequently Q Wealth Events also turn into incubators for great offshore investment ideas, that have a potential for high return. Getting together for a few days with like minded, free thinking individuals and simply brainstorming is a fantastic way to get these offshore income generating opportunities off the ground. Our next event will be in Ireland in September, and we will be focusing it even more than ever on offshore investments. Even if you only have a small amount to invest, consider coming along. Contact us to be put on the list and we will let you know as soon as the dates are fixed.

Finally, if you are interested in our offshore investment advice and are new to this site, don’t miss the opportunity to sign up for our free five part course Secrets of the Super Rich, delivered free and without obligation to your e-mail inbox. You will also receive a free subscription to Q Bytes newsletter, which from time to time features serious high value opportunities too.