How to Use the Five-Flag Strategy to Diversify Your Offshore Investments

Posted by: Joel    Posted Date: Tue, 08/20/2013 - 11:17am

Categories: International Asset Protection

five-flag-strategy-diversifyThe five-flag strategy is a diversification process that includes five distinct phases. Each flag represents one form of investment or other strategy that the investor can use in a separate country. Each aspect of this strategy helps investors diversify their portfolio in order to increase their level of capital gains.
 
The concept is to create diversity that will shield investors from economic duress, political upheaval, the decline of currency or other negative factors, so if any of the countries is affected by one of these factors, the other investments can balance it out. The five flags include: residency, citizenship, banking assets, asset protection and investing, and business. Each of these elements is discussed below.

  1. Residency

    Living in a different country can help investors tremendously. They may be unfamiliar with the banking system, investment opportunities and taxing issues until they take the plunge and actually uproot their residency. The residency phase of the process naturally leads to the next phase, which is citizenship.
     

  2. Citizenship

    Some countries may not allow investors to take advantage of an investment if they are not bona fide citizens of the country. For example, some countries only permit citizens to purchase foreign real estate. It is possible to reside in one country, yet be a citizen in another, allowing you to place your flag in both locations at the same time.
     

  3. Banking Assets

    Many countries allow investors to place funds in their banks to take advantage of unique opportunities. Keeping assets in other countries may be able to help investors shield their investments from taxes. It may also help them avoid problems associated with losing the value of money in their home country.
     

  4. Asset Protection and Investing

    Another country may be the home for investments. International trusts and foreign real estate can also be investments that help protect your assets.
     

  5. Business

    Business can be the final flag for many investors. Individuals may keep some of their funds safe in order to invest in a personal or public business.

Example Plan

In order to achieve this process, a person can live and work in one country while having dual citizenship in two countries. This allows them to place their banking assets in another country while purchasing foreign real estate in other countries. They may also have a business in another country.

Nagel Law helps individuals with establishing these flags in different countries. Our law office has years of experience in consulting with clients regarding these various flags. To learn more about these flags contact Nagel Law.