How to Strategize Before Moving IRAs and Portfolios Offshore

Posted by: Joel    Posted Date: Tue, 06/04/2013 - 8:29am

Categories: International Investments

IRAs & PortfoliosBy investing overseas through a more versatile custodian than the major domestic brokerage houses, investors can work with a wider range of investment opportunities and thus take fuller advantage of currently lenient IRA regulations.

In addition, tax compliance is easy to maintain by simply strategizing the move and purchases in advance.

For many investors, IRAs are extremely important because they represent their most stable asset pools. Their anticipated reliance on IRAs and similar portfolios as sources of retirement funding drives a number of these forward-thinking individuals to invest in new opportunitie"s offshore. Such transitions from domestic to diversified foreign investments can be lucrative, but they must be planned properly.

Why Invest Overseas?

Many people who plan for retirement have to adapt their investment strategies to the legal climate of the jurisdictions they invest in. Countries like Canada, for instance, employ Retirement Savings Plans and limiting laws that restrict portfolio purchases to government treasuries and certain financial products.

Some investors in the United States fear that the relatively open laws here will become similarly restrictive in the future.

Many people choose to invest in a foreign financial account in order to protect their assets from being taken over. This is aided by the fact that some nations have favorable laws protecting investments from creditors and seizure.

Ensuring Investments Remain Legal

Although U.S. laws permit some leeway when it comes to how investors use their IRAs, there are still restrictions. Investors aren't allowed to perform self-dealing actions like buying personal residences or their own assets. Assets should be separate investments that aren't connected to the investor.

Nonetheless, many U.S. custodians prevent their clients from buying certain financial products, even though they may be legal. These limitations can be avoided by finding a good custodian that has experience with offshore investments and can therefore offer a wider range of services.
 
Offshore-held IRAs may be used to invest in foreign real estate, stocks or mutual funds much more readily than they could with many major U.S. brokerage houses.

Some custodians even facilitate fund transfers to offshore LLCs for clients who want to make investments such as real estate. These LLCs are owned by the IRA as disregarded entities, meaning that they aren't tied to the individual investor.

Investors who move their IRAs offshore while keeping these factors in mind may be able to protect them from future government takeovers should they occur. Local laws and international relations could make asset seizure more difficult, even though the location of the assets is openly known. Tax compliance is easy to maintain by reporting the money and paying income tax upon distribution, making foreign financial account investment a sound idea.

At Nagel Law, we focus on providing our clients with a variety of wealth-protection options. Visit our website for more information on our top 15 global strategies to diversify your portfolio and keep your funds safe.