Investments become a tricky concept when you reside somewhere other than your home country. At times, expats are not entirely aware of the investment opportunities they have out of their home countries. They feel it just does not make sense to invest somewhere they do not have a permanent association. However, there are several offshore investment opportunities for expats that they can utilise to channel their funds in different arenas and earn a significant return on investment from the same.
Our article will talk about offshore investment opportunities for expats out of their home countries.
What are offshore investments?
Offshore investment is when you invest the money you have earned in a country other than the country you reside in. This country can either be your home country or any other country in the world. This type of investment enables investors to capitalise on the several advantages that investments outside the investor’s home country or country of residence offer. It also opens wider opportunities as an investor is able to invest anywhere in the world.
Types of offshore investments
1- Offshore bonds
Offshore bonds refer to international bonds that provide investors with a tax benefit when they invest in the same in the long term. Offshore financial advisers sell these bonds either on a lump-sum payment or a regular instalment basis. Insurance products, mutual funds, stocks, shares and more are a few types of offshore investment bonds that are available for expats to invest in.
2- Offshore mutual funds
Offshore mutual funds are an offshore investment opportunity that allows investors to invest in a portfolio of different international companies operating globally. Such a portfolio is highly diluted as it includes companies from all around the world and hence is a less risky investment area.
3- Offshore venture capitalism
Venture capitalism is when you fund a company with high growth potential in exchange for an equity stake. As an expat, you can fund startups across the globe or buy stakes in an established organisation. This enables the investor to take their money internationally and allow it to make significant returns by exploring ventures without boundaries.
4- International realty
You can also invest in international real estate by finding an area that has a high growth potential from a property perspective and investing in commercial, industrial or residential estates. Areas that have been developing rapidly are the best pick in this type of offshore investment mainly because living in a foreign country does not allow expats to visit and overlook the properties frequently. Hence, it is advised to invest in reputed, safe, legal, and flourishing areas.
5- Precious metals
Precious metals like platinum, gold and silver have a high value all across the globe and are traded globally. As an expat, you can invest in these precious metals anywhere in the world where you think the value of gold is expected to accelerate. The volatility in the price of precious metals allows investors the opportunity to make big gains every now and then.
Choosing a proper bank while investing offshore
Most offshore banks are located in tax haven areas, so they offer low to no tax liabilities. These banks can range from small, medium, and big to huge, and they offer a number of products and services. There are two main types of offshore banks
Private banks
Private banks are chosen mainly by the high-net-worth expats that have a considerable amount to be invested in offshore investments. They offer several services that no other bank offers, like investment management and wealth management services. Such banks maintain an extremely high degree of client confidentiality.
Standard offshore banks
A standard offshore bank is any bank that is located outside of your resident country. These banks offer minimal service and client confidentiality. They may be located in a tax haven location or in a jurisdiction offering minimal to no tax.
Benefits of investing in offshore investment opportunities
- Investing offshore provides expats with tax benefits that are hard to ascertain otherwise. Offshore jurisdictions are mostly zero tax provinces, and even when they levy some tax, it is close to a bare minimum. There also exist particular institutions that work to bring your tax liability to as low as possible.
- Offshore investments are a great way to gain international access to securities. In addition to that, these investments offer services like offshore mortgages, currency management systems and multi-currency accounts that help expats keep their finances organised.
- Having investments offshore enables expats to diversify their asset portfolio by exploring global investments. A diversified portfolio leads to minimised risk and maximised returns.
Conclusion
Offshore investments are very advantageous as they offer expats a way to invest in global securities and diversify portfolio and minimise risk. The reward from these investments is also high and enables expats to invest in securities and manage them from far away easily.
To learn more about offshore investment opportunities for expats, request an introduction to an investment specialist by clicking the link below.
[…] Offshore investment bonds are not taxable in the UK until you make a cash or domestic investment. However, foreign bonds indicate that they are exempt from the UK’s consumer protection laws! So, investors can’t sue them immediately for any hidden fees or dodging the game. Hence, you need to keep these points in mind while considering an offshore investment. It has its significant benefits, but there are risks, too. […]
[…] of residency, and the nature of the transfer. For example, if you transfer your UK pension to an offshore pension scheme, you may be subject to taxes on the transfer itself, as well as on any investment income generated […]