International and Global Investing

The concept of international and global investing has revolutionized the thinking of American investors. We have been challenged with the idea of investing outside the United States thereby directly supporting foreign companies and other governments. Regardless of how you may feel about that, globalization is spreading in every sense of the word. Now is the time to capitalize on international developments by placing your money in foreign markets. Patriotism is fine, but in matters of finance, it is better to keep the two separated. The tide of change has arrived.

With the advent of the global economy and emerging world markets, the insightful investor should understand the concept of offshore investing and learn how sophisticated investors worldwide are scoring greater financial gains than their homebound counterparts. The super rich have practiced offshore investing for decades, but only now is it proving to be a viable option for every investor.

Use of foreign bank accounts has been widely discussed in investment books over the past two decades. However, the practice of true offshore investing has been largely overlooked. Probably the reason for this oversight is that most investment advisors concern themselves with financial aspects such as investments and markets and less with the legal aspects of structuring personal and business affairs. This void may also be a result of the lack of demand for the need to know. Rich, internationally diversified individuals have long exercised the offshore angle, but only now does it truly make sense for smaller investors with less capital and less diversified portfolios to consider the same possibilities.

Here are some of the numerous reasons and benefits why an investor today needs to consider investing from offshore. Each individual will recognize advantages that will fit their own circumstance.


Investment Opportunities

International investing is more than purchasing shares in an international mutual fund. Americans often diversify their portfolio internationally by simply investing in an American managed mutual fund that invests in foreign or foreign and U.S. companies. A small investor can benefit from international investments in this way and rest well, knowing that professional managers with knowledge of foreign opportunities and risks are at the helm of their investment.

These funds are well publicized in the United States and include names such as Dean Witter World Wide Investment Trust; Fidelity Overseas Fund; Financial Group Pacific Fund; Kemper International Fund; Keystone International Fund; T. Rowe Price International Recovery Fund; Prudential-Bache Global Fund; Putnam Global Growth Fund; Scudder International; and Templeton World Fund. Returns fluctuate with the economy, but 6 percent to 15 percent annually are common, or double to better what U.S. banks are paying American CD holders.

There are funds located and managed from all over the world. Some of these funds produce returns upwards of 60 percent and more per annum. Most Americans have probably never heard of these funds. Why? As stated previously, there are three strong reasons.

1. It is not worth the trouble and expense for foreign companies to expand operations into the U.S. market due to heavy regulations.

2. They cannot meet strict SEC and other U.S. governmental regulatory bodies to offer their investments in the states. This does not mean these are not good investments, but they do not meet the United States government's idea of acceptable standards.

3. If more Americans realized that greater returns are possible, in some cases sizeable annual returns, whether investing in CDs, stocks, bonds, or whatever, they would likely be inclined to move their money out of fragile U.S. banks and U.S. systems that Americans are forced to accept. Therefore, many of these foreign investment opportunities are not legally permitted to advertise in the United States and are not promoted here. That is why, for example, you only hear about USA managed international and global investment funds.


Confidentiality and Secrecy

In the U.S., there is no financial privacy. Scores of records are maintained on every American by computers. This information is seldom used by others to your benefit. The offshore investor is immediately protected from prying eyes, information snoops, government intrusion and other unwarranted and unwelcome invasion of your privacy. Total confidentiality is secured in numerous ways with the use of an offshore corporation and foreign bank account.

Tax Reduction

Although every U.S. citizen is obligated to file a tax return with the U.S. government regardless of where they live or where the income or profit is derived, they can substantially reduce their tax liability through international tax planning. One interesting note to ponder is that U.S. citizens living abroad are exempt from tax on the first $80,000 of personal income.

Avoid Unnecessary Government Bureaucracy

Citizens are usually the subjects of their own government's regulations, taxes, bureaucracy, dwindling liberties, and more. Every reader is capable of making their own list of inherent drawbacks. But, the offshore investor, even if physically living in the United States as a U.S. citizen, can attain greater freedom, privacy and control over their business, financial and investment sides of life by simply choosing to manage these aspects through one of a handful of excellent offshore bases.

These are just a few of the more significant reasons for going offshore. Other motivating factors include capitalizing on international developments, profit from emerging business opportunities, experiencing foreign cultures, justify international travel, exposure to new ideas, minimize risks to shaky financial institutions and governments, and comfortably prepare for the future.