If you are thinking of investing some money offshore, what should you look for?
Such a huge decision means that getting professional advice is a must, because making the wrong decision could cost you dearly, both in terms of lost potential returns and the time you may have wasted. Also, a financial adviser who deals in this kind of thing all the time may be able to suggest issues solutions that you may never even have considered before. They may also have access to more financial products that those available on the open market, as some IFAs are sent “special offers” by top investment houses.
That said, there is nothing wrong with swotting up on the basics so that you have an informed starting point when you consult your independent financial adviser for help.
So what might you be looking for in an offshore investment opportunity?
The main draw for moving money offshore is usually tax. Whether offshore investments mean that your tax bill can be deferred, reduced or even eliminated, your financial adviser may be able to find a tax advantage for you in offshore investments.
Some offshore investment destinations are “tax neutral”, which means that instead of charging tax on their own soil they pay interest and/or income gross and leave the taxing part to your own country of residence. Even if an offshore destination is not, strictly speaking, tax neutral, there may still be an advantage in investing there if its relationship with your own country of residence means that you will have a low tax bill.
It is sometimes easy to get caught up in the whole tax mitigation issue and neglect the other things that you may wish to consider when choosing an offshore investment. These are namely the political and economic stability of the country where the investments are being made (which may have a bearing on the security of your investment), and of course how well regulated financial services are in that place.
