Understanding Offshore Investments
Investing money in offshore instruments is a controversial topic all over the world. Offshore investments are kept in a different country as the investor’s country of origin. There are many benefits to this investment strategy, the biggest of which is the reduction of tax obligations. People that are concerned by tax requirements in their own country seek out a country that is less demanding as far as tax is concerned. Some countries are loose in the manner in which they regulate and control their investment domiciles. Such countries are preferred by criminals intent on evading tax, laundering money received from the proceeds of crime or hiding illegal sources of income.
Criminal elements are the reason that law enforcement agencies all over the world keep a close eye on large and irregular offshore investment activity. These officers of the law look for suspicious trends and monitor those investors involved to determine if the transactions are all legit.
For legitimate investors, offshore investments offer high interest rates and much lower tax deductions. This is what investing is all about; getting more money than you put in. Offshore investments are not only legal but they are also much less expensive solutions that those available in the investor’s country of residence. Favoured offshore investment locations are commonly known as offshore financial centres or tax havens.
Offshore investments are not as exclusive as most people think they are. Any person who can meet the minimum financial investment requirements and afford the obligatory administration fees can access the benefits of offshore investments. Economists say that more than half of all the world’s investments are held in offshore establishments. In South Africa, quite an impressive number of individuals and companies take advantage of offshore investment opportunities.
There are many investment strategies available outside the investor’s country of residence. Some examples include money-markets and many bond and equity assets offered by offshore companies. Individuals and companies may also hold shares and part ownership in foreign companies. Offshore investments are certainly worth considering for greater rewards.