Offshore Brokerage Accounts

If you are engaged in “commodities and securities trading” and hold such investment portfolios, you can enhance your tax planning and wealth management by using offshore trading companies in conjunction with an offshore brokerage account.

How does an offshore brokerage account facilitate tax planning and wealth management? An offshore brokerage account is a bank account opened in an offshore bank for the main purpose of trading using the capital (assets) deposited into the brokerage account. The key here is the “offshore”, meaning in a jurisdiction far removed from the one you live in; offshore jurisdictions are categorically tax havens with 100% tax free (or low tax) schedules. Any offshore income, revenue, capital gains earned by offshore brokerage accounts are100% tax free and not subject to erroneous duties or other tariffs, as they would be onshore; so is a key tax planning tool to benefit from more beneficial tax schedules. Further, if the offshore brokerage account is owned by your offshore company rather than the individual, on top of the assets benefitting from tax free status, the ownership of the revenues is removed from the individual.

In order to buy or sell commodity/contracts on your behalf the broker/brokerage firm will need access to your investment capital, the line of credit, and cash to which to invest. When you place the money into the offshore brokerage account, the broker or you, if you handle you own trading, uses this account as the primary trading account from which the investments capital comes, and to which your gains are paid into. One of the main components of offshore trading is investment capital, and unless you have access to lines of credit then your trading activity is made on a cash basis, in this case, the broker needs to have access to your money, and so the offshore brokerage account is in place to facilitate this activity. Normal offshore banks accounts sometime have conditions and limitations on them, minimum balances, a set number of withdrawals per day or per month, etc, the offshore brokerage account is designed for high deposit and withdrawal activity, and incorporates other features such as multicurrency transactions, instant internet access, and online banking services, as well as investment services.

The level of access to the offshore brokerage account will depend on the confidence in the broker, your contract/agreement details. You may impose strict limits or give free access to specified amount of money/assets. Offshore brokerage accounts, like other offshore banks accounts have more competitive interest rate for saving and loans compared to onshore banks.

The offshore brokerage account is also a trading account in that if trades are executed on behalf of your own account you are known as a “trader”, (and if trading on behalf of a client in exchange for a commission, the person is known as a “broker”).

When you use offshore brokerage accounts (offshore trading accounts) provided by reputable offshore banks, you can either trade privately from the privacy of your home, office, using the offshore brokerage account as the main source of funds for trading activity, or you can leave the work up to an offshore brokerage firms or offshore brokers. More and more offshore banks are offering offshore brokerage accounts and as such the scope of offshore broker services within the banks are also widening to include offshore brokerage (within the bank as a service), consultancy, wealth management, portfolio management. Further, offshore banks that offer offshore brokerage accounts will offer have multicurrency offshore bank accounts which are most appropriate banks accounts for us with offshore trading accounts, especially if your commodities involve currency trading, or if you transaction are in multicurrency’s.

Unless you are experiences in investing in trading offshore or in the stock markets, it is highly recommended that you us ether services of experiences brokers, to ensure that your investments are managed from an informed standpoint.

The broker is the middle man in the trading process, acting on a clients’ behalf. The brokers would invest according to the arranged that exist between the client and the brokers. Investors with offshore brokerage accounts must take the necessary due diligence steps to ensure that the broker is licensed to operate as a broker and is trust worthy before entrusting any amount of money or handing over assets for trading.

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