An Introduction to Offshore Investment by Jeremy Pickles
Once upon a time, offshore investment strategies were spoken of in
hushed tones. They were conversations restricted to the plush offices
of private Swiss bankers, or a dinner table topic in the expensive
playgrounds of the multi-millionaires.
Thanks to the
information explosion of the 1990s, the internet has opened up many
investment possibilities that were traditionally the exclusive preserve
of the billionaire boys club.
Many readers of Offshore News
are new to this arena and probably confused by the barrage of
information online. After all, these are shark infested waters and
there are many out there who make a very good living ripping off the
recent stream of naive new entrants to the offshore world.
First, you need to consider your reasons for going offshore. You need
to take very careful note (and sound legal advice) of your domestic tax
liabilities first. Americans for example will still be tax liable to
the IRS on their investments no matter what country they are in.
Many investment funds are available only to entities located in 'tax
haven' countries - IBCs (International Business Companies), Offshore
Trusts, Offshore Foundations and the like. You will need to establish a
suitable structure in a tax friendly country to gain access to some of
the better opportunities available, which is reason enough to go
offshore for some even ignoring the tax benefits. Again, residents of
the USA in particular are not acceptable as clients in many offshore
investment funds, but this can be worked around by establishing a
suitable offshore company or trust.
It is most important that
you do not engage any professional advisors who are 'foreign' to the
offshore investment field. If you are your accountant or lawyer's first
client ever to enquire about offshore structuring, you need to change
accountants. Whilst their consultancy is charged at a premium, the
large multinationals are very experienced in the field - talk to the
likes of HSBC or deVere and Partners.
Be careful dealing
with smaller consultant shops who may be pushing the latest 'schemes'
like the recent 'Son of Boss' shelter for example. The legal expenses
incurred from running afoul of the IRS or other government agencies
will far outweigh the tax benefits of the latest gray area fad or tax
dodge.
Be aware that as an offshore investor you must take
strong measures to protect your own interests. Domestic government
agencies like the SEC have no jurisdiction outside your home country,
you will need to do your own due diligence on the companies you deal
with and invest in, and you will need to research what legal protection
is available to you in the jurisdictions concerned. Again, this will
differ from what you are used to in your home country and professional
advice will be necessary. Avoid any internet based company that does
not have real physical contact details - street address, phone/fax,
contact names. Learn how to use DNS research tools like www.betterwhois.com to learn who it is hiding behind the web
site.
If you have determined that offshore investing is something you wish to
pursue, Offshore News reports on the latest developments in the tax
haven jurisdictions. As a general guide it is often more discrete to
establish your offshore structure in a location far from your
residential jurisdiction. Americans for example would be best to
investigate South Pacific countries like Nauru, Vanuatu and the Cook
Islands. Australians could look at
Caribbean or European
jurisdictions. Some tax havens have strong investor protection laws in
place, others are unstable and politically volatile. It's a moving
landscape best tracked by staying up to date with the latest Offshore
News and via your offshore advisors.
Always work directly with
the banks and investment funds you are interested in, and be wary of
any advisor who suggests you should transfer the money to them so that
they may place the funds discretely. Once you are happy with the safety
of your investment in a particular country you need to perform thorough
due diligence on the particular funds, banks and brokers you are
looking at placing your funds with.
Many sound offshore advisors, banks and related companies are linked to from the Offshore news site -
bookmark us and return often to stay up to date with the latest developments and resources on offshore investments and banking.
About the author:
Jeremy Pickles is the owner of Offshore news, which publishes the latest news and resources on Offshore Investment, Tax Havens and International Banking.
