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.