“Offshore investing” is often so shrouded by secrecy to many investors that it makes it seem very mysterious, like some illegal underground society of super-rich investors. Many investors become weary of offshore investment advice and immediately become suspicious.
Once you conduct the offshore investment advice for yourself, you will discover that investing offshore is nothing more than other another way of investing. It has its advantages and disadvantages, like any other investment choice. However, offshore investment often gives greater freedom to the investor and has the potential for much greater return on investments.
What does “Offshore” mean?
Every investment type – mutual fund, partnership, or hedge fund – has a legal entity that resides somewhere. By definition:
A “domestic” or “onshore” fund or investment is an investment that is located – whose corporate entity or partnership is registered – in the country where you live. An “offshore” investment vehicle is located in a different country that the one you live in.
Quite simply ‘offshore’ means a jurisdiction outside of that of your country of residence.
Why do people invest offshore?
Individuals and companies invest offshore for a variety of different reasons. These include asset protection, reduced taxation, financial privacy and discretion amongst others. In legal terms, an offshore bank account or an offshore company is completely safe from the civil courts of another jurisdiction. In many cases, too, these offshore entities are protected from the criminal systems of locations outside of the offshore jurisdiction.
In general, however, it allows an offshore fund to talk to investment professionals in that country – bankers, brokers, lawyers, accountants – but not to investors directly. Thus offshore funds generally do not advertise or give interviews or speeches or issue press releases or do anything else that might make the securities regulator in a country feel the fund is “offering” its products to the general public of that country.
Protecting Your Assets
In today’s world of heavy taxation and litigation, it is essential to have an effective plan to deal with these financial hazards. Banking offshore helps in reducing the financial burden of excess taxes. Offshore investment always ends up in saving taxes.
By incorporating a public company offshore, an individual is shielded from asset searches plus an extra layer of financial security and legal protection is put in place.
Offshore investing may not be for everyone, but if you have assets that you want to protect from seizure, you want to maintain the strictest confidentiality, or you want to seek tax relief, investigate the possibilities. You may find that offshore investing will help you reach your financial goals. But always cautious with the offshore investment advice you obtain. Americans are actively solicited to make offshore investments should be wary. As with most things in life, if it seems too good to be true, it probably isn’t true.