It’s impossible to categorically state what the benefits of an offshore investment policy might be to you as an individual. However, here follows the main advantages of offshore investments that the majority of people are able to explore and potentially benefit from. Before embarking upon an offshore investment strategy yourself however, remember that you will need to discuss your own personal situation with a financial adviser with these potential advantages in mind: –
- Tax deferral – some offshore holding vehicles and a number of offshore savings and investment funds are set up in such a way that tax is not deducted on interest earned until the money invested by the onshore client is taken into your particular country of tax residence, and even then there are solutions to minimise any fiscal liability if structured correctly. This can allow for the intensification of growth, and also the legitimate reduction of taxation.
- Accessing alternative currencies – it is possible to save and invest offshore in accounts or schemes and policies denominated in alternative or multiple currencies. This can provide greater security to those who live in a nation with an unstable currency for example, or need to pay a mortgage in another currency. Or maybe you live in the Euro zone but receive a pension in Sterling?
- Complex investment structures – certain investors need or desire access to more complicated investment structures which are possible to create in certain offshore jurisdictions where regulations are less strict than in others. Such a benefit is mainly desirable to professional investors.
- Expatriate advantages – expats who move overseas and reside in a new country may, depending on the tax rules of the new country and the double taxation agreements in place with their country of domicile, be able to hold investments offshore and legitimately avoid any taxation on income and interest derived from the investment as long as that money is not brought into their new country of residence, i.e. you let the growth roll up.
- Diversification – there’s no denying it, there is an incredible array of investment options available to those willing to explore the offshore world. Some are more attractive and secure than others of course, but if you’re a professional or expatriate investor and you’re seeking greater diversification, you may benefit from investing offshore.
- Regulation, supervision and compensation schemes – certain offshore jurisdictions like the Isle of Man have seemingly better investment regulation in place than onshore centres like the UK. 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.
- Fund managers & investment specialists – certain specialist fund managers and expert investment companies or individuals may reside in and operate from a jurisdiction other than the one in which you reside – to have access to their specialist skills you may benefit by going offshore. The same fund offshore can grow significantly quicker than its onshore version, simply because the tax regime is zero. With less deducted, growth is simply higher.