Why you should be investing abroad

There’s a whole world out there, with businesses and new projects starting and growing all the time, and you can take advantage of these opportunities through smart offshore investments. Offshore investment has a bad name due to its association with fat cats stuffing their money into tax havens to avoid HMRC. However, there are several legal options for investing abroad that will offer some significant financial benefits to you.

What is offshore investment?

If you’re in the UK, then offshore investment is any money you put into investments that are not held in the UK. Offshore investment is not always easy to identify, since it can take a number of forms that incorporate British businesses and territory. For example, you could have a foreign investment fund that invests in British businesses but is registered abroad. Or, you could invest in a business that is physically based in the UK but runs funds registered elsewhere in the world. International money transfer in Birmingham and everywhere else across the UK is a service offered by many companies.

What benefits does it bring?

If UK financial regulation and tax laws are not to your liking, then you and your business could benefit from investing abroad. If a fund is registered abroad, then it will be subject to different tax laws than the UK, which could work better for that particular fund. This means that you could potentially get access to higher return and higher risk investments. You could also have access to a wider variety of investments than you would get in the UK, so try shopping around.

UK-based investments are taxed at the source, whereas some offshore investments might not be. This unlocks more of the returns to you to put back into your business – though this will only work if the business is also registered abroad. Otherwise, it will still face taxation when the money comes into the UK. If you are based outside of the UK or only live here at certain times of the year, then you might benefit from the financial regulations of the other country you are staying in.

Will offshore investment save me tax?

It’s important to remember that the tax you pay in the UK depends on your residential status, not on the geographical origins of your income. However, depending on the country you invest in, you may benefit from one of the UK’s ‘double taxation’ treaties that it has with some countries. These treaties basically stop you from being taxed twice – in the country of the investment and then in the UK.

Is offshore investment right for me?

It’s actually more common than you might think. Many pension funds have offshore elements to them, so you might already be benefiting from investing abroad. Offshore investment often brings higher risks as well as higher growth, so it’s important to talk things over with a financial adviser you trust to ensure you know what you’re investing in and that you understand the risks involved.

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