Offshore Investment and Saving Facts and Fables

Sometimes you just have to cut to the chase and get right to the heart of the matter and today it’s time to talk in straight terms about offshore investment and saving facts and fables.  In this article we will cover the four main misconceptions that most people have come across…

There is just so much misinformation disseminated on the internet about what is and is not possible and practical, what is and is not legal and legitimate, that it’s about time the offshore investment and saving facts were set out clearly!  Trust Shelter Offshore to tell you straight…

1) Investing offshore is all about tax evasion and people who go offshore are criminals.

First things first, going offshore is not illegal – but the evasion of taxation is illegal – got it?! 

In other words, going offshore does not constitute tax evasion or even avoidance and should not be considered synonymous with criminal activity! 

Even those who live in high tax nations who go offshore are not breaking the law – why, because as long as they pay any taxation that they are legally obliged to pay then they are not doing anything illegal. 

The fact of the matter is, there are often taxation benefits of offshore investment and saving including at least tax deferred accrual of benefits – but there is far more to going offshore than merely saving tax. 

2) I can’t benefit from going offshore.

The vast majority of us can benefit from going offshore and as stated above there is more to investing your assets and wealth in another jurisdiction than the one in which you live than just saving tax.

Therefore, while it may be true in your situation that you cannot go offshore and save tax, you may be able to go offshore and potentially gain exposure to different currencies, commodities and assets.  You may be able to go offshore and take advantage of better interest rates, lower charges, or gain access to more flexible policies or more dynamic fund managers for example. 

Don’t write off the benefits of going offshore – check first whether you personally can actually gain by going offshore.

3) Offshore jurisdictions are less well regulated than onshore ones.

An offshore jurisdiction is simply a location other than the one in which you live so this misconception is actually quite ridiculous. 

Is the UK less well regulated than Serbia for example?  Well if you live in Serbia and subscribe to the fable that offshore jurisdictions are less well regulated than onshore ones then you would indeed be saying the UK is less well regulated!

More traditional offshore centres than the UK mainland as used in the above example - such as the Isle of Man, Jersey and Guernsey for example - are incredibly well regulated and in order to attract, win and retain business, the legitimate offshore centres around the world that also offer investors the best opportunities, go out of their way to have the highest standards of regulatory control and investor protection in place. 

So, in effect, depending on where you currently reside and where you choose to invest offshore, you could be placing your assets in a far ‘safer’ place.

4) I can’t afford to go offshore

You do not have to be high net worth to go offshore.  Many expatriates for example take advantage of offshore savings schemes, putting aside a small monthly amount towards their eventual retirement or towards schooling their children.

Others who reside onshore may want to place a lump sum offshore in a policy that allows them to defer the payment of taxation until benefits are withdrawn at which time the saver in question may be in a lower tax bracket for example.

Yes high net worth individuals often structure their affairs tax efficiently offshore – but the simple truth is, because there is more to offshore than taxation savings, so there are more people who can take advantage of the offshore world than just those with a million pounds in the bank.

Further Offshore Investment and Saving Articles

Share this article with others.