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All about offshore investing

October 23, 2009 14:24 IST

InvestmentsMaximising wealth is on everyone's mind. To achieve this, we try our hands at different investment options like funds, stocks, bonds and the like.

If you are one of such people, then most probably you would have heard of offshore investing.

But does everyone know what offshore investing is? Do we know what its advantages and disadvantages are? The answer most of the times is going to be negative.

Moreover, if you dabble in such investments without prior knowledge, it would be a very unintelligent thing to do.

This article aims at providing you with a brief understanding of what exactly offshore investing means.

What is Offshore Investing?

Simply put, offshore investing involves putting money in investment avenues in a foreign country rather than your home country. This is done through targeting benefits offered to investors by firms and governments across the globe.

How does it work?

Offshore investing works in a manner similar to domestic investing. There is no shortage of money-market, bond and equity assets (such as certificates of deposit, bankers acceptances, commercial paper, municipal notes and repurchase agreements or repos) offered by reputable offshore companies that are fiscally sound, time-tested and most importantly, legal.

These can be invested in with the help of reputable financial entities, such as local bankers, portfolio managers and brokers.

Mostly investors choose to open offshore bank accounts in a place where the tax implication is lower as compared to other places such as the Bahamas, the Cayman Islands, Switzerland, the Isle of Man and Bermuda.

However, there may be certain requirements for opening an offshore account.

This may include a minimum amount to be maintained in the account, fees and owning property in the destination country.

What are the benefits of Offshore Investing?

There are many benefits of Offshore Investing, some of which include:

What are the disadvantages of Offshore Investing?

Though investment of this kind looks very easy, it is important to note that these investments are meant for high profile investors and have to be done keeping laws of not just one but several countries in mind. This is not for the faint-hearted.

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