The World of Investments: Offshore Investments

Filed under: offshore

Investing in offshore funds, or keeping your assets offshore is not essential if you are an expatriate, but it is likely to be the most tax efficient way of managing your money. This is our guide to the most cost effective way of taking full advantage of offshore funds and investment opportunities for the expatriate and other international investors. about offshore funds

Offshore funds work on the same principle as onshore investment funds or mutual funds, pooling investors’ money to provide the benefits of a well diversified and professionally managed portfolio of investments.

A fund qualifies as an offshore investment if it is incorporated in an offshore centre and intended for use by non-residents of that jurisdiction. Such funds generally pay little or nothing in the way of local taxes, although they may receive dividends or interest net of withholding tax depending on where and in which assets they invest. The same is true of offshore banking since the offshore banking institutions do not automatically deduct tax from the interest as their UK counterparts would have to do although you should read the section on the new EU Savings directive as this may now apply to you if you are a citizen of a European country living in a different country within the scope of the directive.

If tax is not the deciding factor in using offshore funds or an offshore trust, the scales may be tipped in their favour by other considerations. The type of investment may simply not be on offer onshore, due to regulatory prohibition or a lack of demand. Hedge funds are an example of the former and currency funds the latter.

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