Do you normally look forward to summer vacations with your family just for the opportunity to relax and enjoy the serenity of an exotic island? It is good to unwind and feel the burden of work drop from your shoulders like a sack of gold bullion.
However, have you paused to consider how much these islands make from hospitality alone? Every year, throngs of tourists flock to the white sandy beaches of Bermuda and the Cayman Islands. This literally translates to millions of pounds in revenue for businesses on the Island.
Now, when people hear the term “offshore”, the first thing that comes to mind is fraud and Her Majesty’s Exchequer. The revelation of Panama papers last year, only stoked this misconception even more.
Contrary to popular opinion, not all offshore businesses are a grand design to fleece the taxman. They can be legitimately handled as any real other genuine company.
Here are 5 reasons to consider investing in one of those exotic islands abroad.
Own a holding property in another country
The hospitality industry may have its seasons, but when they come, the benefits are richly rewarding. Being a property owner or proprietor of a hotel lodge can see your income rise during the peak holiday periods. If you worry about managing it from home, this can be resolved by hiring a trusted resident or leasing it to a local entity. They reduced income tax in these countries is an added advantage.
Reduce probate when you die
Owning a property in your name, in a different country, means that upon death, your beneficiaries will have to contend with the probate laws of that country. Using an offshore entity in an offshore country that permits direct inheritance of wealth can help you avoid the hassles of certain probate laws. If you own multiple properties in various countries, this works as an administrative strategy.
Get some protection for your assets
In the genuine world of offshore investments, true investors associate the term “offshore” with “asset protection” because that is what it is. Any corporation or limited liability company (LLC) can provide protection for your assets. But if the main objective of your foreign investment is asset protection, then a trust is the ideal way to go about it. LLCs that have been set up abroad, are not usually liable to unnecessary law suits which is one sure way to protect your assets.
Diversify your wealth
When the results of the EU referendum revealed a Brexit vote last year, an uncertainty-stricken stock market sent the stock market in a turmoil. The sterling experienced its lowest ever margin in 31 years. Having an offshore investment, helps you buffer the effect of such a situation. It allows for dual income advantage and wealth diversification. The very embodiment of “not putting all your eggs in one basket.”
So, the next time you lie in a swinging hammock, on a posh beach in the Cayman Islands, weigh your revenue options and have a rethink. You could be killing two birds with one stone.