Offshore Investing

G

GreenTreeFrog

Hi!

I am looking for advice on investing offshore.

I work full time developing software for a UK bank.

I am an Australian citizen though resident of Vanuatu for tax reasons. I have a company incorporated in Vanuatu that is contracted to UK bank so all income is paid directly into Vanuatu bank.

I also have a personal bank account in Guernsey UK.

We own property in Vanuatu, Australia and NZ.

My goal is to build and investment portfolio offshore. I don't really know where to start.

How do I know which jurisdiction to invest through? Should I stick with Vanuatu or go offshore elsewhere?

Do I invest in my personal name or through my incorporated company?

How do I know which investment company I can trust to manage my funds?

I *think* I want primarily income with some capital growth.

Can anyone offer any advice on where I can start to educate myself further to get answers to my questions above?

I have found a lot of information on the internet. I guess I just want to hear from people who have done it before so can give me some advice based on real experience.

Thank you very much! :D
 
Quote from GreenTreeFrog:

Hi!

I am looking for advice on investing offshore.

I work full time developing software for a UK bank.

I am an Australian citizen though resident of Vanuatu for tax reasons. I have a company incorporated in Vanuatu that is contracted to UK bank so all income is paid directly into Vanuatu bank.

I also have a personal bank account in Guernsey UK.

We own property in Vanuatu, Australia and NZ.

My goal is to build and investment portfolio offshore. I don't really know where to start.

How do I know which jurisdiction to invest through? Should I stick with Vanuatu or go offshore elsewhere?

Do I invest in my personal name or through my incorporated company?

How do I know which investment company I can trust to manage my funds?

I *think* I want primarily income with some capital growth.

Can anyone offer any advice on where I can start to educate myself further to get answers to my questions above?

I have found a lot of information on the internet. I guess I just want to hear from people who have done it before so can give me some advice based on real experience.

Thank you very much! :D
More...

Are you investing offshore because:

you are concerned someone may attach your money: divorce settlement, etc.
(this is a fairly good reason)

Concern about the stability of your country - currency, economy, etc...
(poor reason - a banana republic is a poor way to try and protect your wealth. An overthrow or international economic crisis might leave noncitizens at the mercy of local politics)

or to avoid paying your taxes?
(Stupid reason - you may get a nice long prison sentence someday and owe more money than you ever thought possible. It is very hard to evade paying taxes for a long period. Everyone is being forced to cough up secrecy, and nations are now more and more sharing information and finding ways to track you down.)
 
Quote from rcanfiel:
Are you investing offshore because:
you are concerned someone may attach your money: divorce settlement, etc.
(this is a fairly good reason)
More...

No.
Concern about the stability of your country - currency, economy, etc...
(poor reason - a banana republic is a poor way to try and protect your wealth. An overthrow or international economic crisis might leave noncitizens at the mercy of local politics)
More...
No.
or to avoid paying your taxes?
(Stupid reason - you may get a nice long prison sentence someday and owe more money than you ever thought possible. It is very hard to evade paying taxes for a long period. Everyone is being forced to cough up secrecy, and nations are now more and more sharing information and finding ways to track you down.)
More...
No. As resident of Vanuatu I am not subject to taxes.

But thanks for your initial scepticism of my intentions! :cool:

If I invest in Aus or NZ (where I do hold some shares), I am subject to taxes. While I am non resident, I would like to invest some money into funds etc where I can get tax free income, which is why I am looking offshore.

If I were to become a resident of a country with income taxes, I would declare and pay taxes due.

All above board. :D
 
From my perch as a licensed investment adviser & asset manager who has handled these sorts of issues for offshore Aussies:

1. If you are likely to take up Australian residency again within 5 years, keep the holding structure reasonably simple ...it costs to unwind for eventual repatriation.

2. Don't consider using Vanuatu if you want to avoid the ATO's interest in the future. Download a copy of LBI 46908 'Tax Havens & Tax Administration from the ATO's website. In it, they state quite clearly what type of jurisdictions and structures they'll find 'interesting'

3. Whilst you are Australian non-resident, the personal vs. company questiion applies only to your tax liabilities where you are resident When you return to Australia, investments held in a corporate name for a non-business reason are, again, more likely to stimulate questions from ATO. I assume you are at least aware of the CFC and FIF regimes which will apply to your offshore investments if you reacquire Australian tax-resident status.

4. Reliable jurisdictions for banking confidentiality combined with legitimacy and proximity: Singapore (best), or HK. Guernsey is fine also except that increasingly UK co-operation with FATF initiatives and EU pressure is slowly seeing more disclosure to authorities.

5. Sound jurisdictions for 'domicile' of offshore investment fund vehicles and/or asset holding structures: Isle of Man, Jersey/Guernsey, Dublin, Bermuda. Cayman and BVI, be more careful. (Really no need to look beyond these places)

6. Beware of those labelling themselves as "offshore financial adviser" - in most cases they will turn out to be a 'wealth damager' rather than 'wealth manager'

7. Likewise, many of the "secrets of offshore investment" websites are unlikely to have your best interests at heart, and many - especially those offering some sort of guaranteed yield or regular dividend - are scams

8. The simple answer (and simplest solution) to the question of 'what?' given a bias toward income would be high-yielding shares listed on ATO-approved stock exchanges, that will subsequently qualifiy for FIF income tax exemption for Australian residents, e.g. banks, property companies. (i.e. you wouldn't have to sell them before returning to Oz). This wouldn't require you to go on a huge learning curve and mitigates many of the risks of the unknown.

9. For a capital growth element that benefits from tax-free status and low volatility,and is a low maintenance solution, a 'fund-of-fund' hedge fund might be appropriate, but you would need some professional guidance here since there are an awful lot of 'dogs' in this category

- melo
 
Quote from GreenTreeFrog:

No. As resident of Vanuatu I am not subject to taxes.

You actually LIVE there? Or is that just where you decided to call home while travelling the world?

"Vanuatu is a tax haven that does not release account information to other governments and law enforcement agencies. Pressure is, however, being brought to bear on the Vanuatu government to adhere to international norms to improve transparency in this respect. In Vanuatu, there is no income tax, no withholding tax, no capital gains tax, no inheritance taxes, and no exchange controls."
More...
 
Quote from melo:

From my perch as a licensed investment adviser & asset manager who has handled these sorts of issues for offshore Aussies:

1. If you are likely to take up Australian residency again within 5 years, keep the holding structure reasonably simple ...it costs to unwind for eventual repatriation.

2. Don't consider using Vanuatu if you want to avoid the ATO's interest in the future. Download a copy of LBI 46908 'Tax Havens & Tax Administration from the ATO's website. In it, they state quite clearly what type of jurisdictions and structures they'll find 'interesting'

3. Whilst you are Australian non-resident, the personal vs. company questiion applies only to your tax liabilities where you are resident When you return to Australia, investments held in a corporate name for a non-business reason are, again, more likely to stimulate questions from ATO. I assume you are at least aware of the CFC and FIF regimes which will apply to your offshore investments if you reacquire Australian tax-resident status.

4. Reliable jurisdictions for banking confidentiality combined with legitimacy and proximity: Singapore (best), or HK. Guernsey is fine also except that increasingly UK co-operation with FATF initiatives and EU pressure is slowly seeing more disclosure to authorities.

5. Sound jurisdictions for 'domicile' of offshore investment fund vehicles and/or asset holding structures: Isle of Man, Jersey/Guernsey, Dublin, Bermuda. Cayman and BVI, be more careful. (Really no need to look beyond these places)

6. Beware of those labelling themselves as "offshore financial adviser" - in most cases they will turn out to be a 'wealth damager' rather than 'wealth manager'

7. Likewise, many of the "secrets of offshore investment" websites are unlikely to have your best interests at heart, and many - especially those offering some sort of guaranteed yield or regular dividend - are scams

8. The simple answer (and simplest solution) to the question of 'what?' given a bias toward income would be high-yielding shares listed on ATO-approved stock exchanges, that will subsequently qualifiy for FIF income tax exemption for Australian residents, e.g. banks, property companies. (i.e. you wouldn't have to sell them before returning to Oz). This wouldn't require you to go on a huge learning curve and mitigates many of the risks of the unknown.

9. For a capital growth element that benefits from tax-free status and low volatility,and is a low maintenance solution, a 'fund-of-fund' hedge fund might be appropriate, but you would need some professional guidance here since there are an awful lot of 'dogs' in this category

- melo
More...

I second the suggestion. I suggest that some of your preplanning may be somewhat naive of Australian tax issues.

http://www.ato.gov.au/content/downloads/LBI_46908_Tax_Havens.pdf
 
Quote from melo:

From my perch as a licensed investment adviser & asset manager who has handled these sorts of issues for offshore Aussies:

1. If you are likely to take up Australian residency again within 5 years, keep the holding structure reasonably simple ...it costs to unwind for eventual repatriation.

2. Don't consider using Vanuatu if you want to avoid the ATO's interest in the future. Download a copy of LBI 46908 'Tax Havens & Tax Administration from the ATO's website. In it, they state quite clearly what type of jurisdictions and structures they'll find 'interesting'

3. Whilst you are Australian non-resident, the personal vs. company questiion applies only to your tax liabilities where you are resident When you return to Australia, investments held in a corporate name for a non-business reason are, again, more likely to stimulate questions from ATO. I assume you are at least aware of the CFC and FIF regimes which will apply to your offshore investments if you reacquire Australian tax-resident status.

4. Reliable jurisdictions for banking confidentiality combined with legitimacy and proximity: Singapore (best), or HK. Guernsey is fine also except that increasingly UK co-operation with FATF initiatives and EU pressure is slowly seeing more disclosure to authorities.

5. Sound jurisdictions for 'domicile' of offshore investment fund vehicles and/or asset holding structures: Isle of Man, Jersey/Guernsey, Dublin, Bermuda. Cayman and BVI, be more careful. (Really no need to look beyond these places)

6. Beware of those labelling themselves as "offshore financial adviser" - in most cases they will turn out to be a 'wealth damager' rather than 'wealth manager'

7. Likewise, many of the "secrets of offshore investment" websites are unlikely to have your best interests at heart, and many - especially those offering some sort of guaranteed yield or regular dividend - are scams

8. The simple answer (and simplest solution) to the question of 'what?' given a bias toward income would be high-yielding shares listed on ATO-approved stock exchanges, that will subsequently qualifiy for FIF income tax exemption for Australian residents, e.g. banks, property companies. (i.e. you wouldn't have to sell them before returning to Oz). This wouldn't require you to go on a huge learning curve and mitigates many of the risks of the unknown.

9. For a capital growth element that benefits from tax-free status and low volatility,and is a low maintenance solution, a 'fund-of-fund' hedge fund might be appropriate, but you would need some professional guidance here since there are an awful lot of 'dogs' in this category

- melo
More...

Melo:

This is good information. Can you point U.S. residents to the best sources of information on minimizing taxes through offshore structures?

Thanks,
Wilburbear
 
make sure your deposit in the offshore account to that firm is insured against insolvency or bankruptcy of the firm.

in the US there is SIPC...off shore countries may not have SIPC and if they do there system may take years to recoup any stolen money.
 
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