Saturday 2 February 2013

An Essential Guide to Offshore Investments*

As more and more people are deciding to either live a life of perpetual transience or retire to warmer climes, offshore investments are becoming increasingly popular. As well as taking advantage of some significant tax savings, investors are often keen to select just one investment opportunity instead of having their capital tied up in several different locations around the world. However, a little knowledge about how different offshore funds work will mean the logistical and financial obstacles that hinder many British expats can be removed.

What Does This Type of Investment Involve?

The modern offshore fund involves geographically portable products that offer consumers statutory protection and a wide range of investment choices. Contrary to popular belief, they are not based in shady, semi-legal rogue states, but they are based in established financial centres such as the Isle of Man, Ireland and Luxembourg. This gives consumers the peace of mind in knowing that their funds are protected by law-abiding and stable governments.

The Various Offshore Products

If a person wishes to invest a lump sum, they may do so with the help of an offshore investment bond. A bond can be used as the 'packaging' for a comprehensive range of investments, including open-ended investment companies and unit trusts. As these bonds are based offshore, they give consumers much more choice. Investment funds that are available include guaranteed return funds, managed future funds, stock market-linked funds and government bonds. Exactly which opportunities are best for the individual should be discussed with an experienced financial adviser, but the decisions will depend on factors such as the person's attitude towards risk, age and time-frames.

A detailed consultation with a financial adviser will ensure that investors know exactly much money needs to be injected into a fund every month. A person's disposable income will generally dictate exactly what the offshore investment will be composed of. Most of these products can now be managed closely online, so issues of time-difference and language are no longer obstacles to a lucrative investment.

Reduced Tax Liabilities

Offshore investments allow people to take control over their tax liabilities. Funds based within neutral investment areas allow investors to decide where and when they pay tax on their returns. The ability to 'cash-in' on investments in countries with no capital gains tax - such as the Netherlands - means there are often no tax liabilities imposed by the person's final country of residence. For instance, a British person working in Holland could cash-in their investments before returning to the UK, thus saving significant amounts in UK capital gains tax.

Put simply, investment products such as these give people living transient lifestyles a cost-effective solution to tax liabilities. The plan follows the person, and that means people don't have to re-establish a new plan every time they move to a new country.

Company’s Profile:

Whichoffshore provide professional expatriate information on many financial topics in order to help British expatriate make the most of their expat life abroad. For more information, please visit -

*Retirement Investing Today Comment: This Sponsored Post raises a topic that is very close to my own heart.  When I started down my journey to Financial Independence my strategy included a likely retirement location of Australia.  Since that time a number of scenarios have played out which has made me reconsider this thinking which has included:
  • an extended visit Down Under in 2011 where I “lived the life”; and
  • a current exchange rate of $1.51 to the £ making the country a very expensive place;
  • coupled with in my opinion over valued property

For now I’ve dropped Australia as a possible retirement location however I’m now considering some opportunities in Continental Europe that I feel may give my family and I a better standard of living than the UK can currently offer.  After all once you don’t need to be in a location for work then really in many cases the only reason to stay in the same location is for family and friends.  With modern transport and communications I feel that even that is possibly not a reason anymore.  That said since I have shunned consumerism, become frugal and stopped blaming others I’ve come to also realise that the UK is actually a lucky country with many pleasant places to live.

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