investments

When you finally get the hang of being a bit savvier with your money and you’ve learned to spend less than you make, the generally low returns you get from saving your excess will very quickly have you considering investing over traditional saving. When considering a number of investments to put your money into, two very important questions arise: “Should you consider investing internationally?” and “When do you need an offshore bank account?”

Both of these questions which go hand-in-hand can be answered by taking five considerations into account:

Bigger Pool of Investment Opportunities

Investing offshore opens you up to a much bigger world of investment options, many of which you could never gain access to if you limited your considerations to local investments.

Taking Advantage of Cross-Border Legal Disparities

It’s really not as bad as it sounds and is nothing like getting an expensive lawyer to manipulate loop-holes in the law for you own personal gain. All that this means is that different legalities apply to different jurisdictions, like perhaps the amount of taxes certain investments accrue. Investing internationally via the use of an offshore bank account may put you in line to legally take advantage of these cross-border legal differences. It can be through something as simple as the location of your investment account affording you the opportunity to short-sell (profit from falling stock prices) major companies, or something a bit more complicated, like hedging your investments through strategically investing in different sectors. An example of this would perhaps be buying some government bonds of a specific country and paying for them in that country’s local currency, but with the aim of cashing them in with a different, perhaps stronger currency, or even using those bonds as security / collateral to enter into other investments.

Build an International Investment Portfolio

Some offshore investments facilitated through a local investment services provider are effectively considered local with the associated international investments only held in proxy for you by that local investment services provider. This effectively defeats the purpose of international investments, but with an offshore account that is operated either by a multinational or fully offshore investment services provider, you can hold an international investment portfolio in the true sense of the phrase. Your offshore investments are treated as such and are beyond the immediate reach of local laws, which means some of those investments would be safe from unfortunate events such as attachments or seizures. Legal details naturally differ depending on your permanent residence.

Travelling Convenience

You never know when an international personal or business trip may be in order, something to which the associated costs can be markedly slashed if you already hold offshore investments with offshore bank accounts to go with those investments. Certain travelling discounts can only be facilitated through bank accounts located in the particular country the travelling company is located and you can also benefit from by-passing the need to first exchange currencies (with costs) in order to book travelling arrangements like accommodation and pay for local transport, entertainment, etc.

Hedging Risks and Multiplying Earnings

This is perhaps the best reason why you’d want to consider investing internationally with the use of an offshore bank account. It allows you to play it safe by merely taking advantage of value-growth and value-contraction patterns which emerge when comparing a much bigger pool of markets to invest in. As a simple example; a global under-supply of oil could help you minimize the subsequent fuel price hike in your non-oil producing country if you have an offshore bank account located in an oil producing country. In this particular instance, you could invest directly in the process of buying oil at cheaper prices and then remotely selling it off locally to save yourself from fuel price hikes, and perhaps even make some profit in the process. Something like this would not be possible if you only invest locally and if you don’t have an offshore bank account, unless you go through a broker, which comes with its own brokerage fees.