Pick the Right Country for Investing
It’s important to consider the country when making your decisions. Nations like Belize, which have limited government intervention, no capital gains taxation and high banking stability could be a starting point for you. Figure out the investments measures of that country so that you can settle on that.
As the name suggests, going offshore will generally involve you investing your money or banking in a relatively fair tax condition.
Now this does not mean that your money will be invested in that specific location. It just means that the company administering your account will have a registered office there among others all over the world.
One of the major advantages of offshore investing is enjoying tax havens. Tax havens, are typically considered to mean countries with significantly lower effective tax rates compared with the average rates offered by other countries. In some cases, the corporate income tax rate is zero.
However, it is important to understand that no two jurisdictions have the same tax laws. The logic behind tax havens is that it provide fantastic tax structures to encourage more wealth to be brought into the country, but others have higher tax rates for investors.
Some of the countries without income taxes are; United Arab Emirates, The Bahamas, Bermuda, Monaco.
Going offshore will mean that you are operating on a different currency altogether and managing the currency rates is very essential for your. You could be enjoying tax havens but its all eaten away by forex rates making no economic senses for you.
Its better to evaluate if its cheaper for you to use the originating currency or a global currency such as the dollar just to manage the fluctuating currency values.
Many offshore products have products specifically designed for expats, such as accounts available in multiple currencies, and overseas mortgages, get to ask for such advantages before picking an investment product.
Assessing Investment Options
Offshore investment are popularly known for
- Retirement investment funds.
- A savvy way to make your money work harder.
- A vehicle to produce tax-efficient returns.
There are lots of options to consider it will depend on how you would like to invest, and what you would like to gain from your offshore investment.
Most of these investments will fall into three categories:
- Mutual/Index Funds
- Structured Products
- Portfolio Bonds
Do Your Research
Find out as much as you can before investing in any offshore product. One of your starting points could be the organization you intend to invest in. Since you are a foreigner you many not have as much access to information as the locals therefore make news and media monitoring part of your investment strategy.
Know the financial position of the company, the sustainability and growth plan, reputation and most importantly customer service which can easily be tracked through their social media pages. Safer options, like blue chip sticks are a good place to start.
Blue chip stocks are the stocks of well-known, high-quality companies that are leaders in their industries. These companies have stood the test of time and gained the respect of their customers and their shareholders. Blue chip companies often make regular and growing dividend payments.
Once you have settled down on the company, understand the common terminologies around offshore investing which could be;
Double Taxation Agreement (or Double Tax Treaty). Agreement between two countries intended to relieve persons who would otherwise be subject to tax in both countries from being taxed twice in respect of the same transactions or events.
Free Zones. Free zones are designated areas which receive special treatment through their exclusion from the area to which the country’s normal customs rules apply.
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