The Pros and Cons of Offshore Investment
Offshore Investment has grown in popularity over recent years and has become a great source of investment for a large number of different investors. However, offshore investment opportunities are not for everyone. If you have a financial planner, please seek advice before making a new investment move and always consider the pros and cons of such investment.
It’s no secret that offshore investing can help with relieving tax. This leads to a legals and moral question regarding tax avoidance and tax evasion. That is why this topic is so controversial.
However, there are other possible advantages to investing offshore. For example, it could even be safer than investing domestically.
Read on for both the advantages and disadvantages to bear in mind.
Offshore Investment: The Pros
This type of investment opportunity has become quite common with a number of investors over the years and with the reduced tax benefits, it’s easy to see why. Offshore companies can offer much more advantageous tax conditions giving you a lucrative reason to advance.
Other advantages of offshore investing include:
- Low regulatory environments – a wider range of investment opportunities may become available when there are lower levels of regulation. Hedge funds for instance can flourish in such environments.
- Tax advantages – as previously mentioned, there are many tax advantages to choosing offshore investing options.
- Confidentially with your investment – many offshore firms can provide complete privacy to ensure that you financial information will not be made available to anyone else.
- Asset diversity – investing in foreign markets can help you diversify your assets. This can help you preserve your portfolio even in an economical downturn.
Offshore Investment: The Cons
Although foreign investment opportunities can be extremely lucrative, always consider the cons before advancing.
Here are some of the potential disadvantages to keep in mind:
- High risk – there is increased risk that financial markets are not correctly regulated, which can increase the chance of subsequent recessions and potential loss of investments.
- Not as safe as domestic investment – there are increased tax advantages with offshore investments. However, it is not always as safe as investing domestically. If you are investing overseas, ensure that you invest in a country with the right regulations.
- Tax competition – offshore investment can encourage unfair tax competition, which ultimately impacts on the economy as a whole.
- Reduced transparency – the reduction in transparency can sometimes give a helping hand to those looking to carry out illegal activities.
Offshore Investment: Conclusion
If you want to find out more about offshore investment, you absolutely need to speak to a professional and experienced financial planner. Don’t take advice from any old Jim or Jack who promises you that you can get rich by investing offshore!
For example, in London, Sanlam Private Investments (supporters of the Saracens rugby club) are well known for this type of investment advice. You can check them out by visiting this website.
Or, for more general news on offshore activity, Investment Week can be a fantastic and helpful resource.