FAQ's on Offshore Investing

FAQ's on Offshore Investing

I already have a regular savings plan. Can I get these deals on increases to my existing plan?

Subject to the approval of your current product provider, yes. Certainly, we can offer similar deals on products already listed within this site and should have little difficulty in obtaining similar terms with other providers. Try here for more details

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What does 'offshore' mean?

Some might say tax advantages, security, flexibility, privacy while skeptics might come up with, money laundering, terrorist funding networks, corporate fraud, tax evasion. Well of course, all that does go on, helped by the secrecy laws, "brass plate" businesses and complex trusts that can be used to hide illegitimate activities in many offshore tax havens. But life is getting tougher for those in the dirty money business. Governments of high-tax countries and international economic organisations are increasingly putting pressure on offshore tax havens, demanding greater transparency, more co-operation and better supervision. This is generally good news for legitimate users of offshore tax havens, as it improves the caliber of the institutions setting up offshore and provides more efficient regulation.

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What tax advantages might be available by going offshore?

Tax minimisation or deferment is often the driving force behind the use of offshore tax havens by individuals. However it has become increasingly difficult for all but wealthy residents of high-tax countries to gain much tax benefit from going offshore, although there are other benefits. The main opportunities exist for people who are not caught in the net of high-tax areas, either because they live elsewhere, or because they are temporarily non-resident for work reasons. They can often avoid tax on their income and investments, whether on or off-shore, but that is due to the individuals circumstances, not the location of the investment. Much depends on the tax laws of your home country and on those of the country in which you are living and working. Foreign nationals working in the UK, for example, enjoy a very favourable tax regime as far as UK tax is concerned. UK citizens planning to retire abroad can also build up wealth offshore using investments that roll-up income and gains within the fund.

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What about Offshore Asset protection?

Protecting assets against seizure by a third party has a long history. Switzerland, the oldest of the modern offshore financial tax havens, absorbed assets in its numbered banking accounts from refugees fleeing political and social upheavals in various parts of the world long before the Second World War. Offshore structures are still useful for people living in politically or economically unstable parts of the world, and have become increasingly used by those vulnerable to litigation in their professional capacity. Offshore trusts are the lynchpin of asset protection planning, as they distance the individual from the assets, making the latter unavailable, or exceptionally difficult to recover, in the event of legal proceedings being taken against them.

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Privacy?

Client confidentiality is still closely guarded in offshore tax havens, but there is little doubt that the fabled banking secrecy is not what it was. The ongoing battle against money laundering has led to the introduction of 'know your customer' requirements in many offshore tax havens, which make it harder to open an offshore account in the first place, particularly with a suitcase of cash. Most offshore tax havens will also respond to a request for information given evidence of criminal activity or money laundering. But they remain reluctant to co-operate with so called "fishing expeditions", or in other words a request for information without any evidence of a crime being committed.

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What exactly is 'offshore'?

There is no precise definition; the term simply reflects the fact that most offshore jurisdictions are islands, the best known being the Channel Islands of Guernsey, and Jersey, the Isle of Man, Bermuda, and Caribbean locations such as the Cayman Islands and Bahamas. There are a number of notable exceptions, though, including the land-locked countries of Luxembourg and Switzerland. These tax havens grew up in the last century initially in response to high tax rates and the existence of exchange controls in developed Western nations. They served another purpose as investment regulation increasingly restricted the activities of investment managers in high-tax countries, providing an opportunity to set up more flexible funds that could take advantage of the full range of investment opportunities. Institutions and corporations also found them useful for tax reasons, and they are now firmly established as part of the global financial system. Banking, fund management, investment services, and trust and company formation are the main focus of most offshore tax havens from the private investor's point of view.

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