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7/3/2009
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| They seek greater freedom than is possible onshore.
European & North American nations suffocate banks,
insurance firms, and shipping companies with complex
regulations. Thus, the likes of Barclays Bank and Bank of
America go offshore to reduce red-tape. Others go
offshore to simplify international trade. Thus, an
American utility company might establish an offshore
subsidiary to buy oil from the Middle East. Still other
persons and businesses seek privacy. They want bank
accounts in jurisdictions where it is a felony for a
banker to reveal that they even have an account! [By
contrast, there is virtually zero financial privacy in
America]. In addition, many go offshore for tax benefits.
Some locales, namely the Bahamas, have zero income tax,
zero inheritance tax, and zero corporate tax. |
| Who is the audience for this FAQ?
This FAQ is designed for investors who want to invest
part of their assets away from their homeland. This FAQ
is slanted towards Americans only because most of its
readers are American. I welcome hearing from investors
from around the globe at http://www.andrebacard.com/.
What does offshore mean?
Literally, offshore means off or away from the shore.
The Channel Islands are offshore from England and France;
whereas the Bahamas are offshore from the United States.
Offshore is also used to mean foreign. Swiss banks are
offshore relative to Australians; while American banks
are offshore relative to Mexicans. Offshore is largely
a state of mind.
Who is an investor?
An investor is a person who puts money into an enterprise
or product (an investment) which she hopes will increase
in value. For example, investors purchase bonds, stocks,
and real estate to make a profit. The best diversified
stock investor on this planet, American billionaire
Warre. |
| Offshore Investing FAQ
by
Andr?Bacard, Editor of
Bacards Global Investor
http://www.well.com/user/abacard/invest.html
(Updated on July 18, 1998)
|
| Wealth is relative. Many Haitians consider $US
1,000 a fortune; whereas, many Europeans pay $US 2,000 a
week to drink Bacardi rum on a Club Med beach. The
simplest, cheapest offshore step is to open a
bank/brokerage account. I recommend one bank which has a
minimum opening balance of $US 5,000. The average
account size at this bank is roughly $100,000. Some Swiss
private banking accounts start at $US 300,000 or more.
A typical fee for a bank introduction (help to open an
account) is $US 250.
In my experience, motivation is more important than
wealth. A woman with $US 10,000,000 in American mutual
funds told me it was outrageous to pay a $US 250 fee to
open a pro-privacy bank account. This woman spends $US
250 for a pair of Ferragamo shoes. By contrast, a client
with $US 10,000 in assets told me the $US 250 fee was
the best money I ever spent.
An American computer programmer typically earns $US
4,000 per month. A person with that income can easily
afford to go offshore, if. |
| The need to distinguish between onshore and offshore
investing is forced upon global investors by insecure,
protectionist politicians who fear freedom beyond their
borders. If free trade actually existed, any investor
could open any account from Argentina to Zaire without
political restrictions. I suspect the world will move
towards greater freedom for global investors.
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