Laws regulating and defining offshore investment companies may vary from one country to the next. However, the general understanding of what constitutes an offshore investment company is that of an investment company constituted offshore, whose principle activity is holding securities for organisations or companies with the objective of investing these securities. In the US, investment companies are legally defined as issuers whose primary role or function is to trade, invest or reinvest in securities, issuing face-amount certificates, or owning trading, investing, reinvesting in or acquiring securities that are valued at more than 40% of all assets owned by the issuer/offshore investment company. As such, the United States identifies three fundamental types of investment companies, namely unit investment trusts, mutual funds and closed-end funds.
The structure and features of offshore investment companies may differ from one offshore jurisdiction to another, depending on the legislation enacted and the powers, abilities and level of flexibility that each types of offshore investment was endowed with. Therefore, regular tax exempt or offshore entities, similar to Seychelles companies, can be organised as offshore investment companies if they qualify on the grounds of carrying out the activities and having the basic features that offshore investment companies created in that particular jurisdiction are required to. Modern, sophisticated legislation does not only make an offshore investment entity effective in fulfilling its purpose as an offshore and investment vehicle, but also gives the jurisdiction a competitive edge over other tax shelters.
In order to allow offshore investors a greater degree of access to a wider variety of offshore investment opportunities, offshore investment companies ensure that their asset portfolio is diverse. This is done by making international offshore investments in property, real estate, bonds, stocks, and equity, just to name a few.
For offshore investment companies, this means investing in numerous types of securities so that as companies they are better positioned to serve the investment considerations of their customers. But due to the way in which offshore investment procedures are conducted, offshore investment companies are often considered a collective investment fund in its own rights. It is on this basis that in the United states, some investment groups are not considered investment companies and are instead classified as investment funds depending on if there are 100 or less investors or if the investors all have significant amounts of assets, and which if closely monitored may prove to be very sophisticated in their offerings or financial means.
Offshore investments companies all have an organised structure through which different offshore investment funds and individual investments are supervised and administered by an expert of a particular fund or investment security. There is therefore a wide range of offshore investment companies to include venture capital trusts, unit investment trusts and split capital trusts which are formed based on their specialisms.
Numerous benefits are associated with an offshore investment company given its ability to allow individual or institutional investors to pool assets, make small or large offshore investments, spread risk and source professional expertise in various fields of offshore investment.
Choosing an offshore investment company may be simpler than one may think, but the largest part of that decision is taking the time out to narrow your investment choices and be certain about reasons why you wish to invest and how you intend to go about investing offshore. It is important to pen specific objectives based on your financial intentions and needs, to determine whether you are looking for an offshore investment that will provide you with a regular income or a long-term investment that could provide secure, handsome returns after a specified period of time or, a combination of both long-term investment and regular income. An offshore investment company of excellent repute, experience, a tradition of success, and is willing to pay close attention to your demands and elaborate a tailored offshore investment plan may most likely be your best pick.
