For those standing from the outside looking in, international investments can seem confusing. In many ways, they are just like those investment opportunities offered domestically, and the vehicles like trusts, bank accounts, startups and mutual funds are virtually identical in their makeup. However, there is something that sets apart international investments from their domestic counterparts: Location.
Get to know some of the not-so-secret reasons that people from around the world appreciate international investments.
International Investments Promise Diversification
One of the introductory lessons in investing is not to keep all of your eggs in one basket. Unfortunately, that guideline is often ignored by investors who want to keep all of their assets and earnings in a single country or even in a single bank.
This lack of diversification can be incredibly risky, and the collapse of a single bank, industry or country’s banking system might result in bankruptcy. A much better way to mitigate risk and increase diversification is by embracing the idea of international investments.
Having assets in more than one country, and in more than one specific currency type, can make all the difference in whether you retain some of your assets in a disaster or lose them all.
Non-domestic Investments Can Provide Lower Taxes to Investors
Although many investors are familiar with the idea that international investments can provide lower taxes, the process can seem unfamiliar. In reality, lowering your tax burden is completely legal and far simpler than you might imagine.
The key is investing overseas and keeping your assets in a jurisdiction that offers favorable tax rates to investors from around the world. In Belize, as an example, you’ll get to enjoy their nonexistent capital gains taxes on any income your investments make. This allows you to keep more of the returns on your investments and ultimately have your wealth grow over time.
Great Anonymity and Privacy Can be Achieved Through International Investments
A major motivator encouraging investors to venture offshore with their finances is the lack of privacy and anonymity available domestically. Keep in mind that financial privacy is not intended to facilitate illegal action or questionable financial practices: it is merely a way for investors to protect themselves.
You might wish to establish a charitable trust for a nonprofit without gaining attention, for instance, or you might want to invest in a new startup company without the press reporting on your financial maneuvers. If anonymity and privacy are important to you, then investing internationally is definitely a smart choice.
International Investments Offer Financial Security and Provision for Dependents
Some investments are about generating more wealth for yourself, but others are about creating a financial safety net for old age and for the people that you love. By investing internationally, you can explore a diverse range of financial options that could help and your family or friends in the future.
Some international investments, for instance, might include an offshore trust that earmarks assets for your spouse or your children, and there is no question that international investments and estate planning are natural partners.
Through Caye International Bank, you can begin exploring the best international investments that can help protect your holdings, improve rates of return and provide for loved ones.