Many of us think of offshore investment accounts as something that applies only to the very wealthy but they have great benefits for regular investors. Read on to learn more about this exciting method of investing.
1) Diversification – there’s no denying it, there is an incredible array of investment options available to those willing to explore the offshore world. Investors look to offshore investments for purposes of diversifying their investment portfolios, spreading their risk in as wide an arc as possible, and to defer the tax placed upon capital gains in investments. In many cases individuals also look for the stability afforded in these offshore havens. Offshore accounts are much more flexible, thus giving investors unlimited access to international markets and to all major exchanges. On top of that, there are many opportunities in developing nations and emerging markets, especially in those that are beginning to privatize sectors that were formerly under government control. China's willingness to privatize some industries has investors drooling over the world's largest consumer market.
2) Tax savings - Many countries, known as tax havens, offer tax incentives to foreign investors. The favorable (or non existent) tax rates in an offshore country are designed to promote a healthy investment environment that attracts outside wealth. Offshore investments are set up in such a way that they don’t deduct tax on interest paid. The government does not take kindly to those trying to deliberately avoid paying tax. However, trying to save paying so much tax legally, by investing offshore, is completely acceptable and there are ways to do this. Different financial centers and tax havens have different taxation percentages, rules and regulations.
3) Accessing alternative currencies – it is possible to save and invest offshore in funds denominated in alternative currencies (US dollar, Euro or sterling pound) which can provide those who live in a nation with an unstable currency greater security, or those who like to ‘bet’ on a given currency movement access to policies in their favoured alternative currencies. In an uncertain long-term economic environment, it only makes sense to diversify your currency holdings internationally—and offshore investments are one of the easiest ways to do so.
4) Confidentiality - As an investor, you would not like the public at large knowing what stocks they're investing in; would you? Many offshore jurisdictions offer the complimentary benefit of secrecy legislation. These countries have enacted laws establishing strict corporate and banking confidentiality. From the point of view of investors, keeping information secret while accumulating shares offers that investor a significant financial (and legal) advantage.
5) Take Your Wealth Off the Radar Screen -Your wealth, spending habits and almost every other detail of your financial life is under stern scrutiny by the government. Fraudulent access is common as well, as proven by the recent penetration by identity thieves of through bank data. The matter-of-fact is that once you move your money outside the domestic arena, it drops off the radar screen and becomes virtually invisible to information brokers, private investigators and fraudsters.
6) Sophisticated investment structures – investors desire access to more refined investment structures which are possible to create in offshore jurisdictions where regulations are less strict than others.
7) Fund managers & investment specialists –professional fund managers and expert investment companies reside and operate from a jurisdiction other than the one in which you reside – to have access to their specialist skills you may have to go offshore.
8) Regulation, supervision and compensation schemes –offshore jurisdictions like the Isle of Man or Guernsey have way better investment regulation in place than onshore centers. Other jurisdictions have sophisticated levels of supervision in place as well as investor protection in the form of compensation schemes making them very attractive places to invest for those who require greater security. Other offshore jurisdictions are lightly regulated and hardly supervised and these can of course be attractive to a different sort of investor.
9) Spousal tax reduction - an onshore domiciled individual married to a non-domiciled individual may benefit from transferring their assets into the name of their non-domiciled spouse and then retaining these assets offshore as there may be no disclosure or taxation obligations on the non-domiciled spouse.
10) Expatriate advantages – expatriates who move overseas and reside in a nation in which they are no longer considered residents may be able to hold investments offshore and legitimately avoid any taxation on income and interest derived from the investment.
11) Judgment-Proof -Many hard-working citizens who have accumulated wealth over a lifetime have tragically discovered they are easy pickings for legal predators. This is simply a fact of life in our legal system.
Prudent offshore asset protection techniques, jurisdictions and programs offer wealth preservation barriers to send most litigants and lawyers after those without offshore structures and protection. Even if a creditor discovers your offshore assets, those monies won’t be retrievable without a judgment. And in most offshore centers, such an order won’t be honored because they offer virtually ironclad asset protection in the event of a lawsuit or bankruptcy, with no additional attorneys’ fees.
12) The Hidden Terrorist Risk of NOT Investing Offshore -The world has changed since the attacks of September 11, 2001. One risk that has not received much attention by the news media—most likely because Wall Street doesn’t want you to know about it—is the threat to your wealth and portfolio should another attack target America’s financial infrastructure. After the September 11 attacks, U.S. financial markets were closed for four days. During that time, they were locked out of buying or selling any of any U.S. stocks, bonds or mutual funds. This could happen to any country and Kenya has already been a target. In contrast, if one had assets safely stowed away in a secure, neutral country, one could continue trading any foreign securities one owned, as markets in these countries are not affected by attacks.
By spreading offshore investments between different offshore investment types, financial advisers manage the investment portfolio effectively and select high-yielding strategies.To gain access to the true richness of the offshore investment world, you need to get in touch with an authorized financial adviser.
