Off Shore Investing
WHAT IS OFFSHORE INVESTING?
For expats living abroad, taking advantage of lifestyle and cost-of-living benefits often includes exploring investment options in other countries.
Offshore investing is frequently misunderstood as either inaccessible or a means of tax evasion. Contrary to this belief, it is a legitimate and often advantageous investment strategy. Expats, who typically have offshore bank accounts to benefit from better conversion rates and interest rates, can also utilise offshore investing. This simply means investing in assets located in a country where you are not a resident. Expats might consider offshore investments if their country of residence offers poor financial regulations, returns, or if they seek tax efficiency.
BENEFITS OF OFFSHORE INVESTING
Offshore investing offers several advantages, making it an appealing option for diversifying your portfolio across borders:
- TAX EFFICIENCY
Tax savings are often a primary consideration for offshore investments. Many offshore locations impose minimal or no taxes, while still providing substantial returns. Though your returns may still be subject to tax liabilities in your country of residence, the overall tax burden is generally reduced. - DIVERSIFICATION AND RISK REDUCTION
Investing across different countries allows access to a broader range of assets and markets, not limited to those available in your country of residence. This diversification can include similar asset classes like shares and bonds, albeit under varying regulations, which generally lowers your risk exposure. Additionally, if your country of residence is facing financial instability, having investments in other countries can provide a safeguard for your assets.
- CONTROL
Offshore investments offer structural advantages, allowing you to tailor your investments to your specific goals. This means your investments remain stable even if you relocate. For expats with dependents in the country where the offshore investments are made, managing financial obligations becomes more straightforward. - HIGHER RETURNS
Over the long term, offshore investments typically yield higher returns compared to traditional savings accounts. You can target investments in countries that offer higher interest rates and corresponding returns.
- OFFSHORE INVESTMENT BONDS
Offshore bonds, often life insurance bonds available through financial advisers or wealth managers, are subject to the tax laws of their offshore jurisdiction. These bonds can include a variety of assets such as stocks, bonds, and mutual funds. Offshore bonds are frequently paired with pension wrappers like QROPS or SIPP. As with any investment, it’s essential to understand all relevant details, risks, and costs before proceeding.
WHAT TO DO NEXT?
Offshore investments can be a lucrative option for expats aiming to achieve various financial goals. LS Wealth Management’s financial advisers specialise in addressing the unique financial needs of expats. If you’re considering offshore investments, now is the time to start planning. Contact us to begin your journey towards enhanced financial security.
