Pros And Cons Of Offshore Investment

Offshore investmentOffshore investment is usually degraded in the media and it often gives you an image that those investors who have some huge source of income from any illegal business usually go for offshore investment in some bank with tax limit almost near to nil. While this is not at all true, most of the offshore investing is legal and totally valid. Making offshore investment does not mean you are doing something shady or indulged in some illegal activity. Offshore investment has many advantages and if opt for it you can have many advantages.

What is offshore investment?

Offshore investment indicates a very wide range of investment strategies which capitalizes many of the advantages which can be offered to you outside of your home country and you can do many of the transactions without the fear of currency issues. Here are some of the pros and cons of offshore investment which can give you more idea about offshore investment and whether you should opt for it or not.

Pros

  • Tax reduction

There are several countries which avail with the tax incentives to foreign investment. This can increase foreign investment in their home country and also gives foreign investors benefits. If there are favorable tax rates in an offshore country then it can promote healthy environment of investment which can attract outside wealth to an great extent. For a small country with very less population, attracting foreign investors can prove to be a very great and huge increase in their economic activity. Thus foreign investment can benefit both the country and also the investor. Especially if the investment is done in a country with low tax rate then investor is benefited a lot. But make sure before making investment as to how the country is and what is the prevalent rate over there.

  • Confidentiality

There are many offshore jurisdiction which avails with the benefits of confidentiality and secrecy. Laws in many of the countries are very strict regarding confidentiality and hence your information is very safe and secure. There will be no breach regarding your confidentiality, your identity or your shareholding or any such thing. As there is a belief that off shore investment is for criminals who have way too much to hide and confidentiality is the pre requisite for them. Half of the offshore will be stopped if confidentiality is not maintained properly.

Cons

  • Cost

Offshore accounts are not very cheap that too for making investment in. But it also depends upon the individual goal plans and also the jurisdiction you choose. But still making offshore investments is very costly. Making offshore investment means higher legal fees, account registration fees or corporate fees and in some of the countries you even need to own a property in your name in which you have an offshore investment. Also there are several offshore banks which have a higher minimum balance to be maintained. Thus maintaining this higher minimum balance can also prove to be very costly.