International investments
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International Investment Costs & Taxes

International Investments Costs

International investments costs are one of the things you will need to take into consideration when you plan to invest offshore. Making international investments has its share of benefits, but it is recommended to check what international investments costs you will need to bear.

Investing internationally is recommended if you want to diversify and increase your portfolio and returns. Here is a brief overview of International investment costs.

Transaction Costs

Transaction costs are probably the biggest barriers when investing internationally. Transaction costs will vary depending on which international market you are investing in.

Transaction costs are normally higher for international investments compared to domestic investments. International investments costs will also include stamp duties, taxes, levies, exchange fees and clearing fees. When put together, transaction costs for international investments will amount to much more that what you would normally pay when you invest in your country of residence.

Brokerage Commissions

Brokerage fees can be higher than most other fees you will pay when investing internationally. You will need to talk to your broker and determine exactly how much will you be paying via brokerage charges. It is not recommended to overlook this factor as it an expense you will incur when investing internationally.

Adviser’s Fee

One of the common misconceptions people have when investing internationally is that they think financial advisors provide their services for free. Many people give very little thought to the hidden costs that are applied to their investments. For example; if you invest $50,000 in an international fund with a 5% load, that would amount to around 14 hours of portfolio planning, which would be charged at around $175 per hour by a fee-only advisor. Add that up and you get $2450.

Currency Fluctuation

Since you are dealing with international markets, you will need to pay attention to the fluctuating foreign exchange market. Depending on the rise and fall of the Euro, Pound or Dollar, you are going to pay a bit more or less. It is advisable to check the current rates before making any payments.

You can contact us and speak to our reputed financial advisor for any information you need regarding international investments costs.

Tax Implications

Understanding the basics of international investments tax implications will help you make the right decisions when investing internationally. With the rapid growth of the international market in recent years, more and more people now have the opportunity to invest overseas.

With the possibility of getting better return on investments, many investors have begun investing in tax free or low tax jurisdictions. However, this has also created a rather complicating situation regarding taxation. Some countries like the United States require its citizens to pay tax on all income earned overseas.

However, the situation is not the same for all countries. Depending on which country you are in and also taking into consideration where you have invested, you might be able to benefit from low or zero tax.

Foreign Tax

Depending on where you are, you might be liable to pay foreign tax.

If you are a US citizen and you invest internationally in mutual funds or exchange traded funds, you will have to pay foreign tax. The foreign tax you will be paying will automatically be charged. Some countries withhold taxes on dividend payments. It is recommended to talk to your financial advisor whether you will be paying foreign tax on your investments.

Double Taxation

If you are planning on investing internationally, it is recommended that you familiarise yourself with foreign regulations and tax rules. The tax rules and regulations are not the same for all countries so being informed about the rules will help you make the right decisions when you invest internationally.

Low Tax Or Tax Free Jurisdictions

Most low tax or tax free jurisdictions offer investors various benefits by way of taxes. Some jurisdictions do not require investors to pay tax whereas other jurisdictions require investors to pay a certain percentage, which when compared to tax charged in your country of residence could be very low.

You can contact us and speak to our financial advisor regarding international investments tax implications.

FAQ

This international investments FAQ will provide necessary details about the process and benefits of offshore company formation. International investments are business transactions done within their jurisdiction of incorporation. First, they should have legitimate registration there. Second, the owners or founders must have a foreign domicile. Third, majority of the business transactions must be conducted outside the jurisdiction of incorporation.

Establishing an offshore company is an effective way to protect your assets and investments. It is legal and legitimate as long as you declare the existence of your accounts to the tax authorities. Being a profit-driven businessperson means finding ways to minimize costs and maximize profits.

This is why offshore formation is gaining in popularity. Nevertheless, you should be aware of the tax liability you might incur in your country of residence for any assets and investments you have locally and abroad. Regardless of location though, having international investments presents more opportunities to gain profits and keep your business thriving.

Which Location Is The Best For My International Investments?

Most international investments FAQs will advise you to do a careful research on the country or jurisdiction that you want to put your offshore company. A reliable means of communication is a must. With the technology we have today, it is not difficult to find the best way to talk to the members of your corporation or reach your bank.

You should also find out if the jurisdiction has a stable economic and political condition. It is vital for the stability of your business and security of your funds. The jurisdiction you choose should also have a good reputation in dealing with offshore companies. For the past decade, offshore companies have been associated with tax evaders and money laundering acts. Nevertheless, most international investments FAQs will tell you that doing business offshore is a legal and legitimate act to protect your assets and funds. Do not also forget that a sophisticated corporate law is an important factor to consider when choosing a location for your international investment.

You should also find out if the jurisdiction has a stable economic and political condition. It is vital for the stability of your business and security of your funds. The jurisdiction you choose should also have a good reputation in dealing with offshore companies. For the past decade, offshore companies have been associated with tax evaders and money laundering acts. Nevertheless, most international investments FAQs will tell you that doing business offshore is a legal and legitimate act to protect your assets and funds. Do not also forget that a sophisticated corporate law is an important factor to consider when choosing a location for your international investment.

What Are The Benefits Of Having International Investments?

If you search international investments FAQ, this is usually the most asked question brought up by private individuals and business entities that are interested in being involved in offshore company formation. After finding out the advantages, it becomes more encouraging to make international investments as long as you choose the right location. Benefits include any or all of the following:

  • Quick and hassle-free incorporation process
  • Excellent confidentiality
  • Low or zero tax accountability
  • Less or no tax papers to prepare
  • Low or zero tax imposed on income and profits made outside jurisdiction of incorporation

You can contact us and speak to our reputed financial adviser for any question that is not covered in these international investments FAQ. Our offshore adviser can help you make informed decisions about making offshore business transactions as well as to develop the most suitable international investment structure for you.