What Experts Say About the Safety of Offshore Precious Metal Investments

Posted on April 3, 2015 @ 3:12 PM EST

Many people are looking into offshore investments when it comes to precious metalsThere are several ways to invest in high value metals such as gold and silver. Some take to the physical forms, such as coins, bullion, and jewelry. Others invest in certificates, bonds, and stocks. Apart from the form, however, is the location. You can keep these metals in your home, or in the bank. Yet still, there are places in which to invest. Many people practice what’s known as offshore investment. As it’s name suggests, they invest in precious metals of various forms that are located in different continents. There is a debate about this method, however. Some argue that it is safe, while others warn against it. Who should you believe?

What Exactly Is It?

When it comes those glistening metals we all desire, securing them offshore means investing in metals outside of one’s jurisdiction or boundaries. For example, an individual in Canada or the U.S. may hear about the precious metal boom in Asia. They may decide to invest in gold from a country such as China or India. There are various reasons for why they may want to do this (which we’ll discuss in fuller detail), but they are almost always for some sort of financial benefit or gain. Others, admittedly, are just into the allure of offshore investing, thus engaging it in for fun.

Who’s Doing It?

People of all sorts are into offshore investments. It’s typically viewed as an activity or practice for the rich. If you were to look at your own neighbourhood, you may find a person or two who has decided to invest in precious metals found overseas. Whether you work in an office or on a construction site, there could be a person who engages in this practice as well. With that said, you will have those in the financial sectors, entrepreneurs, and business execs who have participated in this practice. It’s also fair to assume that celebrities from various fields are also securing their own gold and silver from far abroad. The lesson? Just about everyone can try offshore investments for themselves, including you!

Who Does It Involve?Always speak with a financial advisor before going offshore

The most secure and legal way to invest in metals offshore is through a bank. Generally, the bank will have an international program that gives its customers the option to do so. There are also private banks and institutions that may allow for it. For those who want to try this practice, speaking to a financial advisor would be a wise place to start. Since different countries have their own regulations, it will take time and research to figure out how to proceed with the nation of intent. If you were to try offshore investments, you’d most likely go through a slightly different process as someone else.

The Debate

The safety and practicality of offshore investments is often debatedHowever, like all financial practices, the idea of offshore precious metals has stirred up some controversy. There are two sides to the topic. There are those who view offshore investments as a perfectly safe and prudent practice. And then, there are those who have their reservations against it, along with those who oppose it outright. It’s not easy trying to pinpoint everyone’s view on the subject, but there are some common reasons as to why some praise offshore investments, and why others frown upon it. However, it’s not a black and white issue. It’s fair to say that there are both positives and negatives to the practice.

The Pros and Cons of Offshore Investment

It’s worth looking at both the pros and cons of offshore investments since it can work for or against you. Generally, experts in the financial sector will agree that investing in precious metals located overseas can be a good move, as long as it’s done properly. However, you need to be aware of the ups and downs associated with the practice.

Pros

  • Tax reductionAs you probably know, there is a tax on precious metals. These taxes can be quite high depending on where you live. However, many countries make things easier for foreign investors, by offering tax incentives for those who are interested in their metals. For that very reason, offshore investments have become an attractive alternative for those wanting to pay less on taxes.
  • Portfolio diversification – Investing in metals found in one’s own country will naturally diversify their portfolio. However, there are some special benefits with foreign accounts. The economies of developing nations mean investors can capitalize on their growth, and take advantage of the flexibility they offer. This is especially true for gold investments in their various forms.

Cons

  • CostTo say that offshore investments are cheap would be a lie. They’re not. Investing in money, precious metals, and other forms of currency abroad, can bring about significant costs. For many, this a strong enough incentive to avoid going through with it. Also, some financial advisors believe that not everyone investing in these metals will get their money’s worth, making it an unwise venture for many.
  • SecuritySome people who have attempted to invest in precious metals overseas have fallen into scams. For that very reason, some financial experts will advise against the investment of precious metals located in other countries. Of course, the remedy to this problem is to invest through a recognized bank or financial institution. There’s also the issue of legal risk. Since many people try to take advantage of banks by means of loopholes, the IRS has clamped down on investors, and tighter tax laws have ensued.

Going Through With It or Not

Ultimately, there’s a large consensus that precious metals located overseas are worth investing in. They offer great advantages to those who follow the wisdom of their advisor, and make calculated decisions about how they invest offshore. If you plan to try it for yourself, make sure to speak with your financial advisor to gain clearer insight on the practice. There’s nothing wrong with overseas investments as long as you’re cautious and informed.

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