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What are the Benefits of Offshore Investing?
Managing your investments may seem like a lot of work, and adding foreign banks and businesses to the mix may not be something you think would work, but it has its benefits.
While it adds more work, the benefits outweigh the downsides. It encompasses a large number of investment strategies to not only diversify your portfolio but give you many more opportunities than you’d have in your home country.
Let’s look at the benefits of adding offshore investing to your portfolio.
Foreign countries often offer incentives to foreign investors. It’s how they bring in ‘new money’ or money from other countries. This is a strategy small countries use often so they can improve their economy with the wealth of investors from other countries.
In short, offshore investments create a corporation in a foreign country. The corporation holds each investor’s money, which reduces the tax liabilities they would incur in their country. There aren’t any business activities going on, so there aren’t business taxes to consider. The tax benefits of offshore investing are completely legal and a way to keep more of your money within the investment rather than handing it over to the tax authorities.
Many foreign countries offer privacy and follow secrecy legislation. In other words, they can’t share the information of investors or it’s a breach of confidentiality, which leads to serious negative consequences.
Privacy allows high-profile investors to buy shares of a company without divulging their identity. Most high-profile investors don’t want their information shared. They also don’t want the smaller investors following in their footsteps and affecting the overall asset prices.
Any portfolio from any investor must be diversified. It’s how you offset risk and avoid a total loss. Most diversified portfolios perform better than focused portfolios over time.
Investing in assets outside your home country is one of the best ways to diversify across asset classes. You not only diversify within specific assets, but you step outside your country, which has a completely different risk than any domestic investments.
Not only will you diversify your risk, but you increase your opportunity for financial gains. You’ll have opportunities you couldn’t get in your own backyard, and open up the possibilities of extensive gains.
Protection of Assets
Sometimes you need to protect your assets from lawsuits or debtors. While you can’t put all your assets in offshore investments, putting some of your capital in them makes it impossible for domestic entities to touch it.
While you’ll still face the legalities of lawsuits or debts you owe, the money in offshore accounts will remain safe for you and/or your future generations. Some people think of it as an insurance policy for their loved ones or money that can’t be touched no matter what happens legally.
Hedging Against Inflation
Inflation is a real risk for all domestic investments. If inflation outpaces your return, you have a loss or you lose buying power. You may not reach your financial goals because the investment didn’t outpace inflation.
Diversifying in offshore markets can shield against the inflation risk. The investments are in a different currency, which gives you a competitive edge if your home country’s economic climate declines.
Understanding Offshore Investments – Working with a Reputable Firm
Before you take part in offshore investing, it’s important to know what you’re investing in. Using a reputable investment firm is the key. Just like domestic investments, there are different types of investments and accounts you can carry.
Before you choose your investment, determine your goals. Next, look at your offshore options. Which institutions will help you achieve your goal?
Are you thinking about buying assets (likes stocks) or investing in physical assets like real estate or businesses? If you invest in real estate or businesses, you help the entire country’s economy, not just your own portfolio, so it’s something to consider.
Some companies even offer incentives for investors just like you to bring wealth into the country. Before you do, though, you must know the legal framework, which is why working with a reputable firm is important. The legalities and taxes can make or break your investment.
Each country has different laws and requirements. Knowing the tax consequences and how they’ll affect your bottom line is important. You’ll likely get more tax breaks and have more freedom when investing offshore when done right.
Millions of dollars are invested offshore every day. Individuals and institutions invest offshore all the time. Before you do, though, make sure you understand the consequences by working with a reputable firm that will walk you through the process.
A firm that operates in offshore investing, understands asset protection, tax consequences, and business succession is key. Together we can create a portfolio that helps you maximize your capital gains and realize your financial goals.
“I’ve been always targeted by many financial advisors and International investment groups over the years. I have had one fund with an offshore investment group before which I canceled in 2008 and since then I was uncertain if I should do something again. I met Kirk in 2014 and he kept contact with me over the next few years. In 2017 I thought of investing and starting some fund and I have immediately contacted Kirk since he has left a very strong impression as a competent, pleasant, and very well informed advisor. Now I have a few funds with AMA and I am very happy with the service level, professionalism, and guidance from Kirk. I am very confident that I will reach my future goals.”
Ivan Stefanovic - Commercial Director - Scania
“Chad is a pleasure work with, throughout my dealings with him he has always maintained care for our relationship over and above my portfolio. He has ensured our communication and working timelines are met to the highest standard. I’ve found Chad to be very thorough and more than happy to take the time always to keep me updated and continue to answer all questions in a timely and professional manner. He is also very personable and courteous, with a keen attitude to deliver the best service. Chad keeps updated on current market developments and regulations, and his attention to detail and analysis of my portfolio has been most informative and insightful. In my opinion, Chad is a knowledgeable and professional advisor, and I feel comfortable entrusting my international arrangements and overall portfolio management to him. I would happily recommend Chad to others who require assistance regarding their financial planning.”
Warren Drue - Partner- WEBBER WENTZEL
“Warwick Hamilton has, since 2014, been the financial advisor dealing with the proceeds of my UK pension, invested via QROPS in an STM Pension Transfer Plan. I am sure that I am not his biggest client but you would not think so, given the excellent support and service that he gives me. I have been continuously impressed by the way he ensures that these investments are managed to perform well, align with my risk profile; and with his ethical, informative, honest and straightforward way of handling those affairs. I have kept these investments with Warwick despite approaches to change financial advisors because he ensures that I am kept well informed and I trust him.”