Offshore Investment

How to invest offshore

Offshore investments are funds that are invested outside of Kenya, often in tax havens which may be less regulated than the home country. This investing offshore allows greater freedom for the investor and the potential for greater return. They are often conducted by an offshore investment company as there is a wide portfolio of investments on offer. These overseas private investments can take the form of:

• Offshore Investment Funds – these allow affordability, guaranteed levels of regulation, diversification which offers greater stability, and variety.
• Offshore Stocks and Shares - These are based on international capital markets
• Overseas Mutual Funds – if Europe-based, these would be subject to adherence to the European Union Directive, UCITS.
• Offshore Investment Bonds
• Hedge funds – these thrive in low regulatory jurisdictions,
• Offshore Unit Trusts
• Offshore portfolio bonds – which combine an insurance contract with a bank account to facilitate investment in many different vehicles.
• Offshore property funds and Commodities - less correlation to equities & bonds
• Offshore Banking


Who would have an offshore investment?
Although offshore private investment has traditionally been seen only as the province of the extremely wealthy, many individuals and, indeed, companies choose to invest offshore. There is usually a minimum amount when investing offshore, dependent upon the offshore financial centre selected, but that sum is relatively small to anyone who would be concerned about amount of tax payable on investments and, indeed, Return On Investment.

Overseas private investments can be as stable and secure as any onshore fund and, naturally, have the same associated investment risk-benefit scale. They provide added value to any investment strategy by offering the portfolio a number of benefits, not least:
a) Added diversification of investment type / blend,
b) Flexible investment vehicles not available in the Kenyan Market,
c) The potential for substantial savings in capital gain and dividend taxes.

What is the best location for Offshore Investing?
There are a huge range of financial centres and tax havens and the best location for your offshore investments depends upon a number of factors including the risk-benefit strategy you wish to employ and the amount you wish to invest, Ranging from Luxembourg, channel Islands, Isle of Man, Europe, Canada, Cyprus to Switzerland, we can inform you about the differing levels of privacy, the various regulations and levels of taxes in these offshore financial centers.

How to invest in offshore funds

1. Using an offshore portfolio bond
This is a good route for holding offshore funds as the offshore bond will be able to negotiate substantial discounts from the fund managers due to their immense buying power. These discounts generally trim the average front-end load of 5% down to no more than 1% and in many cases the offshore life insurance companies will deal at NAV.
If you are active in managing your portfolio, this can save you a lot of money. There can be significant tax advantages in certain jurisdictions by holding your offshore funds portfolio through a structure such as this.

2. Using a regular savings plan
Regular savings plans are ideal for either investors wishing to create capital lump sums from surplus income or for longer term investment planning.

3. Through an offshore trust
For the individual who wants to ensure that their wealth can continue for the benefit of future generations, the trust is the ideal vehicle. A trust is an independent legal entity. The trustee as distinct from the settler becomes the legal owner of the assets which are transferred into the trust. However, a trust will be administered in accordance with the intentions of the settler, and the trust deed can include any terms the settler wishes.


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