Frequently Asked Questions About International Investment Through an IRA

By learning more about IRAs, how to include international investments and the benefits of doing so, you'll be prepared to strengthen your financial standing and your retirement plan.
Investments Offshore

Investments OffshoreFor many Americans, an IRA, or individual retirement account, is the preferred way to financially prepare for a secure and enjoyable retirement. According to U.S. tax codes, you can still enjoy the tax benefits of an IRA if you invest overseas, but that little tidbit is often discouraged if you bank or invest through a traditional American firm.

Open up your investment possibilities by getting answers to your questions about international investments through an IRA.

What is an IRA?

Before diving too deeply into international investments, start with the basics to understand what, exactly, an IRA is. An individual retirement account is a means of savings for retirement without having deposits and investments taxed under United States law.

In essence, an IRA is designed so that investors who are fiscally responsible are not penalized through taxes for their profitable investments.

Is It Illegal to Invest Internationally Through Your IRA?

If you head to a domestic bank or financial institution for assistance with your IRA, they will almost certainly guide you to domestic investments. This leads a lot of IRA holders to believe that they are only legally allowed to invest domestically, which is far from the case.

The reality is that there are no geographic restrictions for your IRA, and the investments you deem to be most attractive can be from anywhere in the world.

What Can I Invest in Internationally?

Investors are often confused about what international investments can be used through their IRA The easiest explanation is that if a domestic equivalent would be suitable, then so would the international counterpart.

Your IRA might be the ideal place for real estate investments, stocks, bonds, precious metals or mutual funds. However, there are some exceptions, but these are again similar to the domestic exceptions. Art, for example, is generally not allowed to be a part of an IRA whether it was purchased domestically or overseas.

How Will my IRA Change Due to International Investment?

There are a few ways that your IRA may change as you include international investments. First, you may require a new financial institution, particularly if your current bank of choice does not actively encourage international investing.

Then, you’ll need to create a company within your IRA, which could be a LLC or an IBC. You’ll be appointed the custodian of your investments, which will still remain tax-free as long as they are a part of your IRA. Your IRA may see some changes as you gain control, as you enjoy greater privacy, as your overall financial and management costs are lowered and as you notice the faster speed of banking and investing.

Can I Get Assistance With This?

Transitioning to an IRA with international investments doesn’t necessitate expert assistance, but it is certainly recommended to help you profit the most while still following the law and enjoying tax benefits.

By selecting a Personal Asset Protection Plan from Caye International Bank, you’ll have the opportunity to work with experts who are familiar with international investments, retirement planning and ensuring that your assets are protected for the future.

While an IRA is typically thought of as containing exclusively domestic investments, international investing can be a profitable route for holders, and Caye Bank can help.

If you’re interested in learning more about investing offshore, contact Caye International Bank today.

 

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