More than a third of high net worth individuals invest a good part of their assets offshore. And that they expect higher returns and are able to tap investment opportunities not available in their home country. Capital gains tax advantages are only a secondary consideration. A third consideration is your confidentiality and freedom to do what you want with your funds.
A common misconception is that offshore investments are exposed to big risks, but this is terribly inaccurate. Global offshore financial centers rely heavily upon offshore capital and strive to keep their spotless reputations.
An onshore trader will charge less per transaction, but any profits accrued at the end of the year will result in hefty capital gains taxes. Increasing numbers of families are now incorporating offshore investments in order to save for their children’s school fees and college funds, essential wealth management.
Offshore solutions are accessible to anyone who can meet the minimum investment amount. More than half of the world’s assets and investments are held in offshore locations.
Here is a list of reasons why one would benefit from investing part of your savings in an offshore account:
Maximize Your Personal Freedom
Having a foreign bank account gives you more options. More options mean more freedom. It’s a crucial step in freeing yourself from absolute dependence on any one country. Achieve that freedom, and it becomes very difficult for any government to control your destiny.
Peace of Mind
An offshore bank account is like an insurance policy. It helps protect you from unsound banks and banking systems and the destructive actions of a bankrupt government. It also makes you a hard target for frivolous lawsuits and ensures you can pay for medical care abroad. Knowing that you’ve taken a big step to protect yourself should give you more peace of mind.
Currency Diversification
Holding foreign currencies is a great way to diversify your portfolio risk, protect your purchasing power, and internationalize some of your savings. Chances are, though, your domestic bank offers few, if any, options for holding foreign currencies. Offshore banks, on the other hand, commonly offer convenient online platforms for holding foreign currencies.
Political stability
One of the biggest threats to your savings isn’t market risk. It’s your own government. There’s no doubt government poses an increasing risk to your savings. Governments are sinking hopelessly deeper into insolvency. Predictably, they are turning to the same desperate measures they’ve used throughout history.
A big part of any strategy to reduce your political risk is to place some of your savings outside of the immediate reach of thieving bureaucrats in your home country. Setting up a foreign bank account in the right jurisdiction is a convenient way to do just that.
That way your home government can’t easily confiscate, freeze, or devalue all of your money with a couple of taps on the keyboard. If your home government imposes capital controls, an offshore bank account would help ensure you could access your money when you need it most.
In short, keeping some of your savings in the right foreign bank can largely protect you from madness in your home country.
Gapex is a Foreign Exchange Intermediary reducing foreign exchange costs to SME companies and individuals. Saving you time, money and administration. Gapex has foreign exchange consultants helping entrepreneurs and SME’S save money on foreign exchange. Gapex focuses on personal service that saves you money and time while reducing your administration. We negotiate preferential rates on your behalf so your investment capital goes that much further. We will assist you with all the necessary paperwork, tax clearance certificates and ensure that everything is in line with SARB regulations.
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