Offshore Investing

If you have seen too many action movies, you may think that offshore investing is only for crooks who need to put their money somewhere safe. The reason why offshore accounts have always been associated with criminal activity is because of the tax deductions, the 'concealment' factor and the high rate of returns offered by offshore banks.

As an investor, you can definitely use these benefits to your advantage by opening an account in a bank outside of Canada. However, there are also some disadvantages that you need to watch out for. Take a look at the pros and cons of offshore investing.

The primary advantage of offshore investing is that a good number of countries are tax havens. This means that their government offers tax incentives to foreign investors. By doing so, they are creating a healthier economy and attracting more foreign investors to their countries. The other benefits of offshore investment include asset protection, privacy, confidentiality and less strict regulatory environments. Finally, offshore investing is much more flexible so you can diversify your investment portfolio as much as you want.

Now, the downside of offshore investments is that they are quite costly to set up. You also need to watch out for tightening tax laws, since the government is more likely to keep their eye on even the legitimate offshore investors, through the Canada Customs and Revenue Agency. If you think that the pros far outweigh the cons when it comes to offshore investing, there is one final factor that you need to consider. Make sure that the country offers a relatively secure environment for offshore investors. The Cayman Islands, Bahamas, Bermuda and the Isle of Man are some of the most popular countries for offshore investments.