The Key To Offshore Investing

WHAT YOU NEED TO KNOW: IS YOUR ASSET STRUCTURE OPTIMISED OR OVERLOOKED?

- Justin Joseph

In recent years, South Africans have increasingly turned their attention to offshore investments as a way to diversify their portfolios and safeguard wealth in a volatile financial landscape.

With economic uncertainties, fluctuating exchange rates and the rising cost of living, many are looking beyond the borders of South Africa to grow their wealth and mitigate risk.

Offshore investments offer access to global markets, opportunities in foreign currencies and tax advantages, but they also come with their own challenges.

It is important for South African investors to know what to look out for when investing offshore. Below are a few of the main considerations:

While the investor is alive:

> Impact of tax - South African investors are taxed on their worldwide assets; for higher-rate taxpayers, this means that 45% of the interest earned and 18% of capital gains are lost to tax.

> Withdrawals - When investing offshore, it is important to ensure that withdrawals can be paid directly to a foreign bank account to remain offshore.

> Efficiency - When investing offshore, it's important to ensure that you can complete all transactions from SA, ideally online. Many offshore banks and providers may require original documents and might insist that you be physically present to complete certain transactions.

At the death of the investor: