Offshore Investing

[magic]

any advise about investing offshore? I have searched for companies dealing with offshore investing, but have only found one so far.. I am considering it due to the supposed tax benefits.

My conserns are:

-Finding other companies who handle offshore investments.

-If I find a company, is it legitimate?

-Will an American actually get a tax benefit with offshore investing? (for those from America who know)

thanks,

steve

[strabel23]

Why do you want to invest offshore and what kind of investment are you looking for? Stocks ,Bonds, REIT'S? Stocks bought and sold on the SET are tax free for locals and foreigners.

[magic]

Why do you want to invest offshore and what kind of investment are you looking for? Stocks ,Bonds, REIT'S? Stocks bought and sold on the SET are tax free for locals and foreigners.

I am looking for mostly a managed account, probably consisting of mutual funds.. I'm not familiar with SET. I am comfortable investing in the american stockmarket because I can easily track performance/history, etc. Of course, this is all taxable in america, so I am looking for some other alternatives..

That triggers another ?

How does one research the performance of Thai stocks? Are there mutual funds available?

[naka]

Why do you want to invest offshore and what kind of investment are you looking for? Stocks ,Bonds, REIT'S? Stocks bought and sold on the SET are tax free for locals and foreigners.

I am looking for mostly a managed account, probably consisting of mutual funds.. I'm not familiar with SET. I am comfortable investing in the american stockmarket because I can easily track performance/history, etc. Of course, this is all taxable in america, so I am looking for some other alternatives..

That triggers another ?

How does one research the performance of Thai stocks? Are there mutual funds available?

If you are thinking "Offshore" and "Tax free" investments then you should NOT be thinking

about Thailand due to monetary restrictions, lax regulations etc.

Instead you should be thinking about "safe" investment locations with good laws.

Jersey, Gurnsey (Channel Islands) or the Isle of Man would be good choices.

Naka.

Edited February 19, 2006 by naka

[Firefan]

But I believe Americans are required to report (and pay tax on - with some deductions) their world wide income and assets anyway....

Naturally it is hard for the IRS so check I guess....

That said there are many legitimate companies out there selling offshore products. Don't you get a cold call from them once a week?

Cheers!

[DarwinK]

Not sure what you mean by "managed account." Investment terms can be used in many different ways--what a managed account is in the US may not be what an offshore salesmen means. (BTW, they like to call themselves "independent financial advisors," but truly if they work for commission, they are salesmen.) At a minimum, you should find out what are the total fees involved in using the "managed account" structure--i.e., what is the total fee your salesman will receive over the years, as well as the total amount the compan(ies) your salesman works for will receive. You may find the fees are so high the structure doesn't make much financial sense (for you, that is).

Next, take care that your salesman is actually working with/(for) real fund management companies, and not insurance companies. If he or she works for names like Skandia or Zurich, be aware that these are insurance companies that are repackaging funds from fund management companies, and adding fees on top of that. So you'll end up paying fees to the original fund companies (indirectly), and fees to the insurance company (directly), and fees to your "IFA" i.e., salesman.

Ask your salesman what qualifications or education he/she has in investing. How does he/she pick the funds he invests in? Who regulates him/her? If you're unhappy with your account at some point, to whom do you complain, and what will happen? Also, if he's working here in Thailand, he should be legally registered with a work permit, and licensed by the Thai SEC as an investment advisor.

Also, be aware that although your salesman may say that "100% of your money is invested up front," this means that the sales charge is simply spread out over a number of years. Also, ask about what surrender charges are involved should you decide you want to discontinue the relationship.

Finally, if you are an American, offshore accounts just aren't appropriate for you. You'll get a far better choice of funds at lower cost investing through an account in the US. This will result in higher returns, and fewer expenses--over the long run, even a slight difference in returns can make a big difference in the size of your portfolio. While the desire to lower taxes is understandable, as an American you get no legal tax benefits from using an offshore vehicle. But not to worry, as an expat American, you do already get tax breaks on your base level income, which can lower taxes on some of your investment income. US capital gains taxes are fairly reasonable.

And while in the short term you may be able to "hide" assets (and their returns) from the IRS in an offshore account--this is becoming increasingly difficult--offshore locations are under increasing pressure to lift their secrecy policies, and international monetary flows are being tracked increasingly closely. As an American, do you really want to limit your flexibility or chance having problems with the IRS in the future?

Cheers!

Edited February 20, 2006 by DarwinK