Off Shore Investments

Offshore investing offers a multitude of investment approaches that take advantage of the benefits offered to investors from other countries. However, you can run the risk of getting involved in a shady deal, most of the ventures you will find are perfectly legal. Investors will find a plethora of money-market, bond and capital assets provided by legitimate offshore companies that are financially stable and legal. It is important to remember foreign jurisdictions are not required to follow the law of another country. They are immune to the laws of the investors residing country. Therefore, it is important to ensure the assets the investor is seeking to protect be held outside of the residing country.

There is a wide variety of benefits for investors to take advantage of for putting some of their assets in offshore accounts. One of the most popular benefits is reduced taxes. There are countries who offer tax breaks to foreign investors. By offering reduced taxes to foreign investors it helps the offshore country to achieve a healthy economic environment. This is accomplished when the investor forms a corporation in a foreign country, the corporation doesn’t actually employ a staff there is little or no tax imposed on the corporation.

There are some offshore locations that are havens for reorganizing ownership of wealth. By utilizing trusts or an existing corporation ownership of wealth can be transferred from one person to another legal beneficiary. If an investor’s concerned about a lawsuit or foreclosure on debts, some transfer their assets to a holding company outside of the their home country to avoid seizures of assets. By transferring property from their personal estate to a trustee they can avoid penalties associated with debt.

Offshore jurisdictions offer investors the benefit of secrecy. Many countries have enacted laws regarding strict confidentiality. If confidentiality is broken, there are serious penalties for the offender. However, offering confidentiality does not mean the investor has done something illegal, it protects high profile investor’s identity and may offer them a financial advantage.

The final benefit of investing in offshore investments is having a truly diversified portfolio. Offshore accounts give investors unlimited availability of the international markets and currency exchanges. Investors also gain opportunities in developing nations that are beginning to privatize industries that were under government control.

While the benefits of Offshore investing are appealing and may be well worth the risk there are certain disadvantages that every investor wants to keep in mind. Tax Laws are changing. The IRS wants to make sure it claims its share of revenue. The IRS has begun shrinking tax loopholes that international investors have used through the years. By amending the Internal Revenue Code and establishing the Expatriate tax they are able to collect taxes from American companies that operate in another country as well as collecting from Americans who earn dividends from offshore investments.

Additionally cost is another component to keep in mind. Offshore accounts are not cheap to set up. There are costly legal fees, corporate registration fees and some are required to be a resident of the jurisdictional country which means owning property in another country.

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