The term ‘offshore’ can relate to any jurisdiction, nation or financial centre outside the nation in which you’re currently residing – however, typically the term offshore relates to low or no tax jurisdictions where there are specific regulatory, taxation or financial benefits for an individual to encourage them to bank or invest therein.
Once you expatriate – i.e., once you leave your home shores behind and move abroad to live, work or retire – there are taxation implications involved in your relocation, and what’s more, there are often significant advantages for you if you ‘offshore’ your money. I.e., if you save, invest or bank your money in a jurisdiction other than the one in which you’re now resident. Benefits will always depend on your own personal circumstances of course, but can include: –
- Security for example, i.e., if you’re working in a country with an unstable banking environment, by ‘offshoring’ your income and housing it in a stable, well regulated environment, you’re protecting it from any negative fluctuations or situations that may occur in the country in which you’re living and working.
- Improved accessibility to your cash
- Advantageous tax breaks
- Improved investment options
- Lack of a language barrier
- Improved confidentiality
- The tax efficient management of money or even housing money in a tax-free environment.
The decisions you make relating to which jurisdictions best suit you and your financial circumstances and requirements will depend on your nation of origin, which is often referred to as your country of domicile, and your new nation of residence now that you have expatriated. For example, if you’re a Briton living and working in Germany, you will not necessarily be best served by the same offshore jurisdictions as a Briton living and working in South America or the Middle East. This is largely due to the fact that within the European Union and specific designated ‘third countries,’ there is legislation in place that can have very distinct advantages for EU residents. This legislation can be said to present new opportunities to the expatriate – such as exploring Dublin as an offshore centre perhaps, and looking at the benefits and prospects that this particular jurisdiction offers. For some EU residents, fully compliant, EU approved savings vehicles, can reduce your tax liability to just 6% regardless of the amount invested.
With over sixty offshore jurisdictions or international financial centres to choose from, you certainly have your work cut out when it comes to selecting the right environment for your money.
What’s more, making the right decision is critical and key to securing and advancing your wealth, maximising your expatriate advantages and staying on the right side of often changing laws.
You will need to ensure that the jurisdiction you favour has a high standard of regulation, and that there is supervision, protection and ultimately tax efficient growth. Key areas to cover are:
- Tax free or tax efficient growth
The industry experts who have overseen the creation of this guide and whom we at Expat Money Guide recommend, only work with institutions in the most reputable, well-regulated jurisdictions, they don’t take risks with our readers’ assets, and the advisers we recommend can advise you on which locations offer you the best protection for your wealth.