| Offshore funds are assets invested offshore | | | | available to UK residents. |
| where tax advantages exist. The Bahamas or | | | | |
| the Channel Islands can be considered as | | | | The situation of each investor is different. |
| examples. These are funds outside the tax | | | | Offshore investors tend to have very complex |
| system of the country where the intended | | | | criteria governing investment selection, so |
| investor is residing. | | | | in addition to standard criteria (for |
| | | | instance passive funds, low cost, no load |
| Offshore funds offer eligible investors | | | | etc) the following issues must also be |
| significant tax benefits compared to many | | | | considered. |
| high tax jurisdictions such as United States | | | | |
| and the European Union. However, where funds | | | | 1. Complex international tax issues typically |
| are repatriated to high tax jurisdictions, | | | | apply. Tax considerations are urgently |
| they are usually taxed at normal rates as | | | | important. It is imperative that a competent |
| foreign arising income. Many of these tax | | | | authority on international tax law be |
| haven locations are considered investor | | | | consulted before any offshore investments are |
| friendly and are intentionally regarded as | | | | made. |
| financially secure. | | | | |
| | | | 2. Ensure that tax avoidance shouldn't be any |
| Many offshore jurisdictions, notably the | | | | investor's goal. The goal ought to be |
| British Virgin Islands, offer a zero tax | | | | maximization of post tax wealth. It may |
| regime for investment funds, which are | | | | sometimes make sense, therefore, to invest in |
| domiciled there, which allows the fund to | | | | an imperfectly tax efficient vehicle if it |
| reinvest that part of its investment | | | | is better, on an after tax basis, than any |
| portfolio's gains which would otherwise have | | | | other similar vehicles available. |
| been lost to tax. | | | | |
| | | | 3. Some countries largely prohibit their |
| A number of offshore jurisdictions have | | | | residents from investing in overseas |
| recently tightened the regulation of offshore | | | | domiciled investment funds (e.g., US, |
| funds. | | | | Canada). |
| | | | |
| Offshore funds such as overseas unit trusts, | | | | 4. Residents of some countries may have local |
| open ended investment companies and other | | | | investing options available which might be |
| similar collective investment schemes, have a | | | | competitive with most of the countries but |
| long established position of importance among | | | | are not limited to Australia, Canada, |
| the range of savings and investment products | | | | Ireland, UK, US). |