Offshore Investment

Offshore Investment

Offshore Investment

Introduction

Offshore investment refers to the investment of money in another country that is not one's own country of residence. The major advantages of investing in foreign locations stem from reduced tax burdens. Investors can take advantage of reduced tax burdens in most of the countries worldwide whether they are large scale businesses or small scale businesses. There has been a lot of media hype against offshore investment as they are frequently accused of being “safe havens” for money laundering or tax evasion. This is true to some extent as poorly regulated business laws in offshore countries have served to protect and hide money illegally earned from the governmental and law enforcement agencies of the country where investment is done. However, in recent times these illegitimate businesses are being increasingly contained and most businesses have come out to explore the legal opportunities available.

Discussion

At present there are modern and regulated organizations that offer great opportunities for legal investment. Legal investors can take advantage of these opportunities that carry with them a high rate of return and lower tax rates. These opportunities come out to be legal, and are of a lower cost as compared to the opportunities available for British citizens in U.K. Countries where investors invest heavily on account of the low rates of taxes are defined as tax havens.

British citizens looking to invest abroad can take advantage of the offshore investment if they have the required minimum amount of financial resources and can pay the required fees to obtain an office abroad. It is important to note that more than half of the global investment and assets are held offshore. Therefore, investment in offshore jurisdiction is a highly profitable business which the British citizens can take advantage of.

Advantages of foreign investment

The main attraction for our clients; the British citizens looking forward to investing offshore is the reduced tax burden. Countries that are considered as tax havens are known to offer incentives in taxation to foreign investors. The taxes rates in such countries are maintained in a way to promote an investment environment that would attract foreign wealth to their countries. Countries with smaller economies and fewer resources are in dire need of attracting foreign investment as there are conducive in increasing economic activity inside these countries. So in order to attract foreign investment, these countries have regulations in place with lower tax rates. A foreign investor investing in such locations would find a higher rate of profitability as compared to the profit he would earn if he invests at home in U.K. For example, an offshore investment means that a British citizen opens up a corporation say in India. That corporation would act as a shield for that investor from higher taxes that he may incur while investing inside Britain. These low tax structures are completely legal in nature and businesses can continue to gain profits without having to indulge in tax evasions.

One more advantageous situation that makes foreign investment more attractive for British ...