Strategies for Offshore Investing Novices

Offshore InvestingMany investors are attracted to the opportunities offered by international investing. While some realize they need to learn a little more about how to make the most of those opportunities, others tend to think that investing offshore is just like domestic investing, just in a different location. The fact is that if you want to be successful with offshore investing, there are a few lessons that must be learned up front.

Respect the Learning Curve

There is the temptation to think that if one has been successful with domestic investments, that success will easily translate into an offshore environment. That is not necessarily the case. Things are a little different when it comes to global investing. While some of the basics are the same, the application of those basics may vary from one setting to the next. In other words, the novice investor will need to deal with a learning curve before jumping into the deep waters of international investments.

Making an assumption that offshore investing is basically the same as investing at home can lead to some serious consequences. Before setting yourself up for a fall, take a little time to understand the factors that will influence the growth or decline of any offshore asset you are thinking of acquiring. How stable is the political environment in the country of origin? Does the asset have a proven track record of steady growth, even during economic downturns? Is there a possibility that the asset will produce the type of returns that make the investment worthwhile?

Always make it a point to learn about the laws and regulations that govern the investment option. Governmental oversight and regulatory measures can be very different from one country to the next. More importantly, they can be quite different from what you are used to at home. Don’t assume anything when it comes to regulations. Find out the facts and consider the purchase of the asset in light of the rights and responsibilities associated with ownership.

Set Up a Base of Operations

Before getting too involved with international assets, it helps to set up a base of operations in a nation that provides very favorable banking laws for offshore investors. For example, banks in Belize are often a great option. The banks in this country are extremely stable and provide a number of benefits that will help you manage your wealth over the long term. You can easily set up an offshore checking account and savings account, using online tools to manage the accounts with ease. Best of all, they provide the resources needed to remain fully compliant with domestic tax agency regulations. This will be especially important when the time comes to submit your annual tax return.

Compare First Buy Later

Buyers in general know that before making a purchase it is important to see how the goods compare to products offered by the competition. The same general idea holds true with offshore investing. Take the time to compare what appears to be a great deal with a similar investment and decide if it is really worth your time and money. For example, if a railroad stock looks appealing, compare it to the stock issued by a competing railroad. Look closely at the anticipated dividends, the unit prices of the two stocks and the potential for growth in the value of the individual shares. Doing so could help you uncover an excellent deal before other investors take notice and begin to drive up the price for those shares.

Ask for Help

There is never any shame in asking for assistance from the professionals. Working with a brokerage and investment firm that specializes in offshore opportunities is important for the novice investor. A financial adviser and broker can look out for your interests while you learn more about market conditions in different countries. Over time, you’ll learn a lot from those experts and become proficient in identifying the investment opportunities that will allow you to move closer to your financial goals.

About this author

Caye International Bank Limited (CIBL) was granted an Unrestricted "A" Class International Banking License on September 29th, 2003 by the Central Bank of Belize and is regulated by the Central Bank of Belize which set the standards for liquidity and capital adequacy.