Developing an international investment portfolio

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One of the largest attractions for heading overseas to work as an expat is for the lucrative opportunity such an assignment will bring, which means understanding how to invest while living abroad will help you to enjoy the best returns.

There are a wide range of strategies that are potentially available to help an expat capitalise on investment opportunities outside of their home country.

By having a strategy of investing in their home country, the expat may be neglecting more potentially rewarding investment opportunities elsewhere.

For instance, the investment strategy for an expat could include:

• Renting out their home
• Investing rental income in stocks and shares
• Buying an investment buy to let property
• Investing the profits from a buy to let property

However, expats could also be looking at international and offshore investments, but what do these terms mean?

While many expats may believe that offshore investment might be a legally dubious way of investing, this would be a mistake. International investing and offshore investing are different terms which essentially mean the same thing. By moving money offshore, the expat is moving cash to a jurisdiction or another country to the one in which they are living.

It’s also advisable that expats avoid investing in those countries that have a poor financial regulation framework or in politically unstable countries.

Most expats tend to use international jurisdictions and offshore centres that come with high levels of legally recognised consumer protection.

These investments are then completely independent geographically and regardless of where the expat may be living, they can be managed easily by them or their wealth manager.

It’s now easier than it’s ever been before to develop an international investment portfolio that will deliver the returns the expat is looking for; they should consider:

• Investing in fast-growing world economies for impressive returns
• Diversifying their investments into a variety of geographic and economic conditions to reduce risk
• Offshore investments can be portable with one investment fund provider
• Opportunity to enjoy high returns with lower tax while living overseas

The tax efficiency of investing while living overseas is a crucial consideration and one that should not be ignored; expats are in a unique position in that they have the money to invest, can invest in safe offshore environments and enjoy a tax efficient investment.

Finally, all expats looking to invest should appreciate that investments can rise as well as fall so speaking with a specialist financial adviser is always the best advice to help reduce investment risk.

For many expats, particularly those who have an international bank account, their bank may offer a financial wealth adviser who can help with more investment advice, whereas for other expats it is an easy process to find a reputable chartered financial planner looking to give impartial guidance and advice for successful expat investing.