Expats living and working overseas eventually have to grapple with the question of what to do about savings and investing. For those of you who aren’t earning or saving anything – well you clearly have a different set of priorities to deal with in the short term. But for those of you who are earning more than you spend here in Shanghai, then you have to make a decision about where the money should go.
Is offshore investing for you?
Yes, if you plan on staying offshore for long periods of time over the rest of your life. The tax advantage is strongest and/or legalist if you never repatriate it – or yourself (in many places including the EU). Everyone’s situation is different and you should always check with someone who really knows the specifics of your case before you make any decision. Still, if you are working on that clever premise that you’ll park your big payout offshore when you go back to your fast-track life in San Francisco and eventually retire tax-free in Bali, you had better do some serious planning. Tax criminals are made – not borne. This is exactly where other-wise sharp operators go so very, very wrong.
No, if the amount of money is modest and you plan on returning home soon. Offshore investing only really makes sense if you plan on staying overseas for at least 6 more months.
Maybe, if you are making a US-style salary in Shanghai and you plan on being here another 18 months. Offshore investing can be big & sexy – or it can be more on par with setting up a 401k . Stuffing wads of cash in your sock drawer is actually your second-worst option. Many highly paid expats end up squandering impressive amounts of money in a city where rents are low and entertainment is only expensive-ish. Just because you are living in Shanghai or Beijing doesn’t mean your planning can go on hold.
Another strong candidate is anyone expecting a change in family status: weddings, babies, and other. You should be reviewing your status at this time anyway, and the fact that you are overseas makes it that much more important to find reliable advice.
The best advice we can offer you is to seek the advice of a qualified, knowledgeable professional advisor who can review your unique situation and offer you a range of options that suits your needs and risk tolerance.