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Why
Offshore Investment?
Tax is
the driving force behind 'offshore', but for the great
majority of well-off individuals considering offshore
investment, tax is not directly an issue. They reside
in high-tax areas such as the EU, the US, Canada or
Japan, they pay their taxes, and if they make 'offshore'
investments, it is in pursuit of higher returns, and
without any intention to evade taxes in their home countries.
Some investors
are outside the catchment of the high-tax areas, either
because they live elsewhere, or because they are temporarily
non-resident for work reasons. Such investors can often
avoid having to pay taxes on their investments, whether
on- or offshore, but that is due to the investor's circumstances,
not the location of the investment.
So why
might an 'offshore' investment be superior to an onshore
investment?
The first
answer is because it is more lightly regulated, and
the behaviour of the offshore investment provider, whether
he be a banker, fund manager, trustee or stock-broker,
is freer than it could be in a more regulated environment.
An 'onshore' regulator will immediately say, oh, of
course, if it's unregulated, then it is riskier. Well,
they would say that, wouldn't they?
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