Because of the numerous benefits of having offshore investments, more and more people and corporations are turning to this option. More than half of the world’s assets and investments are held in offshore jurisdictions and many well-recognized companies, families and governments have investments in offshore locales.
Well known people including politicians and actors to private families are all engaged in International investing using offshore jurisdictions for their investment structures.
Offshore investment providers come in many forms, from offshore banks, fund managers or trust companies, to individual firms and groups seeking investment. The oldest and most common countries for offshore investment structures are the islands from the British Empire, they include such islands as The Cayman Islands, The British Virgin Islands, the Seychelles, the cook islands and the Bahamas, these are but a few of the possible jurisdictions one can chose from today, there are more then 30 available, giving a wide range of options for you to chose from and all can be accessed with a few clicks on Google. However, if you are seriously considering this move, consulting with experts in this field is highly recommended, as going it alone could end up costing you more then it should.
Below are some of the advantages and disadvantages of offshore investing:
Asset protection is probably the tagline you’ve always heard when looking up offshore investing. Offshore investing makes this possible by transferring assets to a legal entity outside your country through structures like trusts, foundations or corporations. This is highly beneficial to individuals susceptible to lawsuits or are frequent debtors of large amounts of money. Whatever happens to the individual in the future, a portion of their assets remain secure for future generations. Offshore investing thus becomes an insurance policy.
This is the strongest driving force for most investors. But should not be the main driving factor to hold assets offshore. The tax savings deriving from offshore investments are not illegal, they are part of a well planed international investment structure. They are a product of geo arbitrage, played with taxation laws among different jurisdictions.
Diversification of Assets
Compared to onshore investment regulations, most offshore jurisdictions encourage foreign investments by their flexible investment regimes. Assets are easily diversified in these jurisdictions because of the easy access to international markets and exchanges. Naturally, a jurisdiction with the least restrictive regulations will be preferred by investors. In an offshore setting, a business could grow faster and more profitable by using these jurisdictions.
Most offshore jurisdictions offer foreign investors a degree of secrecy. Secrecy is not just for the provision of hiding transactions it is a right that should be enjoyed by everyone in their investment decisions. This secrecy doesn’t necessarily mean that foreign investors are seeking illegal movements on an international scale and does not automatically imply that offshore jurisdictions encourage illegal activities, it is simply restoring a right that investors have lost in most first world nations. The confidentiality laws maybe breached in clear instances of criminal acts by the investor.
Exposure to offshore markets could be a form of shield against global inflation. In addition to this, having an investment in a different currency and country other than where you live is a leverage against a worsening economic climate in your country of residence.
Offshore investments don’t come cheap. Depending on the jurisdiction of choice, the minimum requirement to open an investment account ranges from $100,000 to $1 million. Furthermore, offshore investments may cost you more due to the professional fee structure of the account service provider. Hiring professional financial advisors will save you a lot of time setting up and managing your offshore accounts.
As mentioned, every jurisdiction has a different set of requirements. It is best to study each option according to your specific needs and level of available resources.
For some investors, especially those new to the offshore world, the question whether this concept is safe or not is of concern. In truth, as with investing in your home country you should always undertake proper due diligence on any potential account manager or organization. It is importance that you choose a reputable organization to handle your assets.
The more popular offshore countries have long proven records of secure investment opportunities. In fact, wealthy individuals and multinational corporations have long been practicing offshore investing.
Matters around legality might make you nervous about investing offshore and could cause you to be discouraged about investing. The positions of many first world nations to offshore investing has many ordinary citizens focused on it must be illegal or it is morally wrong, where in fact it is perfectly legal and in some cases it is used by the same people that say otherwise. This propaganda campaign from first world nations is nothing more then a way they can appease the voting masses that they are trying to look after the interests of them.
Tax laws, especially in the USA and Europe, are now been adjusted or looked at to try an tighten any tax leakage due to the new globalized world in which we now live. Most of these reviews will talk heavily about stopping the leak but in fact will just make the Tax laws more complicated allowing for the smart investor to further utilize offshore investing to her advantage.
Like any other business or investment venture, offshore investing maybe risky. You need to take your risk profile and risk parameters into consideration for any offshore investment just as you would at home.
The pros and cons presented in this article is for general use. In real life, the considerations will differ from one investor to the other, thus there will be different sets of options presented to each. Times are changing and it is only natural to learn the latest trends and best practices to improve your lives and those