Category Archives: Offshore Investing

REPOST: Hong Kong’s Bermuda Bent

Companies domiciled in the Cayman Islands and Bermuda make up nearly half the market capitalization of the Hang Seng index. Here’s a comprehensive report on Hong Kong’s offshore companies from Bloomberg:

As this week’s release of the Panama Papers has shown, most investors like to keep their links to offshore financial centers on the QT. Not so in Hong Kong.

Take a look, for instance, at the front page of the latest annual report from one constituent of the Hang Seng Index, a noodle maker that Chinese consumers know by the cuddly name of Master Kong:

B1

 

The name helps remind local investors nervous of Beijing that while Tingyi’s main offices are in Shanghai, its legal base is an island 90 minutes’ flight from Miami whose governor is appointed by the Queen of England.That attitude isn’t unique among the city’s businesses. About 45 percent of the market capitalization of the Hang Seng Index consists of companies whose registered offices are in the Cayman Islands or Bermuda — including its largest constituent by weighting, Tencent, and all the main firms in Li Ka-Shing’s Cheung Kong empire.

 

Bermuda Option

Companies domiciled in the Cayman Islands and Bermuda make up nearly half the market capitalization of the Hang Seng index.

Hong Kong Bermuda

As the past week’s revelations have demonstrated, Hong Kong’s companies are far from alone in carrying out this sort of global regulatory arbitrage.Wolseley, the world’s biggest supplier of plumbing parts, was founded in Australia, earns most of its revenue in the U.S., is listed on the London Stock Exchange, is domiciled in Jersey, and pays its taxes in Switzerland. Pfizer is said to be terminating its $160 billion merger with Allergan after U.S. officials proposed new rules that would make it harder for the group to benefit from low Irish tax rates.

 

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Should you make an offshore investment?

Offshore investments means having to deposit you money in a foreign country. These investments offer a higher return rate compared to the local banks. The interest rate is usually about 8% but they require specific capital and you also have to pay some small fee.

These investments do allow for transfer of the asset’s ownership especially for those people who worry of confiscation of their assets. One can choose to change the ownership to other foreign entity, as long as it’s legal, through foundations and trusts.

Offshore investments officials will never reveal your financial details in the country. If this happens then the client has a legal reason to sue the official since most investors will not like to have their details, stocks they are buying, be made public.

These investments will offer you the freedom to make choices. They allow investors to diversify hence spreading the risks widely possible since just like any other investments offshore can go up or down.

Anybody who has the required capital can make an international investment thus protect their assets from certain liabilities that they would have experienced at home, debts and obligations.

People from some countries have a certain limited number of opportunities to make such international investments. These investments will require you to have enough capital to start as the minimum required amount can be around a hundred thousand dollars and will have such fee as corporation registration and a legal fee.

Average income earners can form a company that will make the offshore investment or get into a company to have investments that are in special funds. Trading companies that are involved in such activities as imports and exports can make offshore accounts. Other companies which can do so include; professional service providers like designers and engineers, shipping companies, intellectual property companies, asset protection companies, employment companies, holding companies and investment companies.

More info at these links from lom:

lom/mutual-funds

lom/investment-brokerage-services

These investments are safe and one should not be worried it is very important for you to get an investment firm who will make the necessary arrangements for your offshore investment process.

More info at this video: