Despite the media demonizing of offshore investing, be sure that a picture of investing in illegal companies, located on one of the Caribbean islands with the tax rate next to nothing, does not look exactly like this. While there are always shady offshore deals present in business world, the vast majority of offshore investing is perfectly legal. There are over one hundred thousand offshore funds, some with investment minimums as low as five thousand dollars, you can choose any of them, certainly after studying them carefully. The most of offshore accounts, however, require minimum investments of between one hundred thousand and one million.
You can invest offshore in two different ways: a direct and indirect way. The direct way is when you are over eighteen years old and in good standing with the Receiver of Revenue. The indirect way, whereby you invest locally in rands with benefits payable in rands, in a fund or policy that gives you an exposure to offshore investments in a foreign currency or currencies. A good example of indirect investment can be seen in the Old Mutual's Global Equity Unit Trust Fund or Worldwide Endowment Policies.
The offshore variable annuity is one of the perfect ways for offshore investing. This is a way to get an access to foreign investment funds without having to pay punitive taxes on the distributions from those funds, and then you would better choose the offshore variable annuity. Investing in offshore variable annuities is also a way to get a strong asset protection, when you cannot afford a high cost of a foreign trust. It is also a perfect alternative for you to think of, when you want to obtain the maximum of legal offshore privacy.
A good example of offshore investing is GAM Diversity, a low-risk hedge fund with an average thirteen percent per annum since 1989, with fifty percent less standard deviation or risk than its benchmark index (MSCI World Index). While GAM Diversity is now closed to new investments, GAM Diversity III, managed in the same manner, is still available.
As far as many offshore funds want to avoid the burdensome US regulation, many of them will not sell shares directly to U.S. citizens or residents. Nevertheless, you can legally buy them through an offshore bank, such as The Sovereign Society's Offshore Convenient Account partners in Denmark or Austria. Jyske Bank and Anglo Irish Bank are also the society's preferred offshore partners for you to consult and get any additional information about offshore investments. Popular offshore countries, such as the Bahamas, Bermuda, Cayman Islands and the Isle of Man are known to offer fairly secure investment opportunities. It would be good if you find a good attorney, specializing in asset protection, wills or business succession - a wise step of yours to have an additional protection of your assets.
When US residents invest in offshore funds, they may meet some obstacles in face of U.S. tax laws. It may be also your country that applies the same tax laws about investments offshore. These laws can require you to pay taxes on unrealized gains on your funds on a yearly basis. You can easily overcome this obstacle by purchasing these funds through a tax-deferred vehicle, such as a retirement plan. Being a part of social investing, the retirement plan will minimize possible losses of yours. Social offshore investing like an overseas education for your children or retirement overseas is definitely advantageous.
You need to be especially sure about choosing a trusted product provider, when you deal with offshore investing. It would be an advantage to know if the offshore product provider is registered with the Financial Services Board. If yes, you are only left to decide on how much you want to invest. Find out about the charges, product flexibility, tax position and any other specific features. Decide on the appropriate asset class mix equities, bonds and cash, to meet your risk profile. Find the best sides of offshore investing and you will see that sometimes it is able to present you the financial peace of mind.