The rising prevalence of offshore investing means that an increasing number of people from around the world are drawn to this way of increasing profit, reducing taxes and saving money on overhead fees. However, there is a lot of misinformation floating around that you should set straight before you begin investing.
These are the top seven things to keep in mind before making offshore investments.
1. Tax Jurisdiction Matters
One of the key reasons to invest offshore is to enjoy lower capital gains or income taxes. However, it is important to understand that no two jurisdictions have the same tax laws.
Some countries, like Belize, are incredibly hospitable to foreign investors and provide fantastic tax structures to encourage more wealth to be brought into the country, but others have higher tax rates for investors.
2. Offshore Investments Are Suitable No Matter What Your Net Worth
Many people wait to make an international investment until they have a large net worth. However, that certainly isn’t necessary. Whatever amount of money you have you can invest offshore and see benefits.
3. Be Sure to Think About Local Stability Before Investing
Before investing in an offshore destination, give some thought to the stability of the region. Banking stability and political stability are two big things that could affect your investments, so they should be a priority as you pick a destination.
4. Consider Costs When Choosing Between Offshore Investment Destinations
Remember that no two offshore destinations are the same and no two offshore investment firms will offer the same prices for services. Making an offshore investment doesn’t have to be expensive, but it will definitely be cheaper when you invest in a country with a lower overall cost of living. Since overhead costs are lower in places like Belize, for example, you can save money on application and maintenance fees.
5. There Are a Variety of Offshore Investment Options
Before you put your money into any offshore investment, make sure that you fully investigate all of the opportunities out there.
Just a few of the countless options include investing in precious metals like gold, buying international real estate, setting up an offshore trust, investing in a new business or putting some of your assets into a managed offshore mutual fund.
6. Risk is Variable Offshore and Domestically
Risk is always an element of investing, and it makes little difference whether you’re investing domestically or internationally. It is up to you to pick the investment that meets your desired level of risk. Safer options, like blue chip sticks, carry less risk, but also less potential for profit.
That principle applies to any investment around the world.
7. Offshore Investments are a Legal Option for North Americans
Some North Americans are hesitant to begin making offshore investments because they are afraid there might be some kind of stigma attached. However, there is absolutely nothing illegal about investing offshore, and it can be a positive way to diversify your portfolio.
With these seven tips in mind, you’ll be prepared to make your very first offshore investments anywhere around the world.