STRATEGIES
STRATEGIES
of Offshore Investment
The Pro ’ s and Con ’ s
What Is Offshore Investing ?
Offshore investing refers to a wide range of investment strategies that capitalize on advantages offered outside of an investor ’ s home country . There is no shortage of money market , bond and equity assets offered by reputable offshore companies that are fiscally sound , time-tested and , most importantly , legal .
Advantages Tax Reduction - Many countries ( known as tax havens ) offer tax incentives to foreign investors . The favorable tax rates in an offshore country are designed to promote a healthy investment environment that attracts outside wealth . For a tiny country with very
few resources and a small population , attracting investors can dramatically increase economic activity . Simply put , offshore investment occurs when offshore investors form a corporation in a foreign country . The corporation acts as a shell for the investors ’ accounts , shielding them from the higher tax burden that would be incurred in their home country . Because the corporation does not engage in local operations , little or no tax is imposed on the offshore corporation . Many foreign companies also enjoy tax-exempt status when they invest in U . S . markets . As such , making investments through foreign corporations can hold a distinct advantage over making investments as an individual .
4 Offshore Handbook 2016 www . reimag . co . za