Offshore investing is a concept that is gaining popularity especially with the elite business class individuals who have investments in different countries across the globe. This simply means putting up your money in bank accounts in other countries that have different jurisdictions from where you reside. Foreign investments have in the past been an expensive affair because it involved the transfer of assets from one country to another. With the introduction of offshore investments however, it has become easier since the investor is only required to have an offshore bank account to facilitate international money transfers.
One of the main reasons why offshore investing is a preferred option is because of the fact that it encourages investment diversification. Most nations have set up strict rules which hinder or slow down international investments claiming that it is an obstacle local investments and the end result is slowed down economic growth. While such restrictions are beneficial to the government, they do not add much value to individual investors.
Investors understand the importance of investment portfolio diversification, and the best of this is one which includes international investments. Offshore Investing accounts therefore offer this opportunity by providing a flexible platform where one can invest their assets in a different country without having to go through a lot of legislative hustles. In addition to this, the investor is able to gain access to different major currency exchanges.
Offshore investing has also enabled investors to gain access to the developing countries most of which are undergoing the process of privatizing their once state owned organizations. In such cases, both these governments and the international investors benefit. The governments are able to raise money for their development projects from the privatization process while investors get the opportunity to diversify their portfolios.
The other reason why offshore investing is preferred by many investors despite its high maintenance cost is the fact that security and confidentiality are guaranteed. Offshore bank accounts are the most confidential accounts owing to the sensitive nature of most investors’ financial status. Most of these investors are the multimillionaires who prefer to remain anonymous for security purposes and also to ensure that the stocks they invest in do not get flooded by the small scale investors who are famous for initiating price run ups.
In conclusion, offshore investing is the best option for large scale investors who have the capacity to invest at international levels. Developing countries especially in Asia and Africa have been the biggest beneficiaries of offshore investing with the best example being China whose privatization process has attracted a lot of international investors, and this explains the growth in export of consumer goods.