There are many non-residents of their home countries living in other countries. How should these expatriates and foreign residents start investing their assets?

In many cases, non-residents in their home country try to invest in the country where they currently live. As a result, they fail to manage their assets. Instead, the correct way for non-residents to invest their assets is to invest overseas.

Of course, you should not invest abroad without thinking, and the non-resident of the home country must start investing by the right method. One of the ways to invest overseas is through hedge funds. It is possible to invest in hedge funds by using offshore tax havens.

Why does it have to be an overseas investment? And why are hedge funds so good to invest in? It is possible for ordinary people to invest in hedge funds, and I will explain how to do it.

Stocks and Investment Products in the Country You Live in Are Poor

Unfortunately, there are no good financial products available in your country of residence. In fact, if you invest there, you are likely to lose a lot of money.

It’s great that you want to support the country you live in. However, investing should not be done to support the country you are living in but increasing your assets. Therefore, you should not invest in the country you are currently living in.

For example, in the case of Japan, the stock price reached its highest point in 1990 and has not hit a new high since then. In other words, Japan’s stock price has not grown for decades.

The same is true for emerging countries with high economic growth rates. Emerging countries are known for their high risk and low return, and this is because there is little growth in stock prices. For example, below is the price movement of stock prices in the Philippines, representing the 10 years.

Even though the economic growth rate is high, stock prices are not growing. The reason is that they depend on domestic industries and do not earn foreign currency by doing business in developed countries such as the US and Europe.

In addition to stock investment, there are other investment products available in your country. However, bank deposits have very low-interest rates. Also, even if you take out life insurance, your money will only grow at an annual interest rate of about 4% or less. Therefore, asset management is not efficient.

Moreover, when you invest, you have to do so in the local currency. You can only receive your money at a local bank in that country, which is not convenient for people living abroad. This is because if you decide to move to another country, even if you receive the money, you will not be able to use it freely. In particular, expatriates always move to another country.

Therefore, it would be a mistake for non-residents of the home country to buy investment products from the country where they are currently living.

You Can Invest in Hedge Funds by Using Tax Havens

So, let’s invest overseas. Among overseas investments, the method of investing assets in tax havens, where taxes are almost non-existent, is called offshore investment. Offshore investment is the best investment method for people living abroad and expatriates.

There are several types of offshore investments, as follows.

  • Offshore Mutual Funds
  • Offshore Life Insurance
  • Hedge Funds

In general, when it comes to offshore investments, you make a regular investment. On the other hand, when you invest in hedge funds, you will be investing in a lump sum. By investing a large sum of money in hedge funds, your assets will be managed by the funds.

The Money You Have Invested Can Be Transferred to Any Bank in the World

The reason why offshore investment is so good for people living abroad is that when you want to get your money back, you can send it to any bank in the world.

When purchasing financial products in the country you are currently living in, such as fixed deposits, stock investments, life insurance, etc., you must always use a bank in that country to receive your money. Therefore, if you decide to move to another country, you may not be able to receive your money or use it freely.

Investments are generally made for the long term, such as 20 or 30 years. If you are living abroad now, there is always a possibility that you will live in another country in the future. When this happens, it is a big disadvantage to receive money only in a specific country.

On the other hand, when you invest offshore, you will not have any trouble no matter where you live because you can receive your money from any bank in the world. The reason why you should invest in offshore instead of investing in the country you live in now is that you will not have any trouble receiving your money.

Offshore Investment in US Dollars

When you invest offshore, you can manage your assets in US dollars. In addition to US dollars, you can also invest in euros and British pounds. However, even if you live in Europe, you usually invest in US dollars.

On the other hand, when you purchase financial products in the country where you live, you invest in the local currency and receive your money in the local currency, as mentioned above.

If your country of residence is in the US, Europe, etc., there is no problem because the currencies used are the US dollar and the euro. These currencies are very reliable.

On the other hand, you should not invest in currencies other than the US dollar or euro. This is especially bad when it comes to investing in the currencies of emerging countries. This is because emerging countries have low currency values and tend to be lower in value compared to more reliable currencies such as the US dollar and the euro.

For example, here is a chart showing the value of the Turkish lira and the US dollar over the past 15 years.

As you can see, the value of the Turkish lira has been declining for a long time. Investing in the currency of an emerging country is very risky.

On the other hand, as mentioned above, offshore investments can be made in US dollars. You can invest in hedge funds in US dollars, and you can manage your assets in US dollars. You will not be investing in a risky currency but in the most trusted currency.

All Hedge Funds in Your Country Are Scams

When you invest in a hedge fund, you will be investing in a legitimate hedge fund. In offshore investment, you invest in hedge funds using insurance companies (investment companies) registered in tax havens.

Investors from all over the world invest in tax havens. They are also highly ranked by global rating agencies. When you invest in hedge funds with these investment companies, there is no possibility of fraud.

On the other hand, there are no hedge funds in countries other than tax havens. There are active funds that are listed and can be invested in, but they are not hedge funds since they invest only long positions (buy). In any case, you can invest in these active funds through a securities company.

In contrast, there are many hedge funds in every country that are offered as private funds. However, there is a 100% probability that these hedge funds are scams. Not only do they not operate and disclose fact sheets, but they are also fraudulent funds that are only interested in collecting money with high yields.

As is the case with all hedge funds, superior hedge funds are always operated in tax havens. The countries where they are registered vary from hedge fund to hedge fund, such as the Cayman Islands, Bermuda, and Singapore, etc. In any case, if it is not a hedge fund operating in a tax haven, it is certainly a fraudulent fund.

There is a 100% probability that there is no good hedge fund in the country you are living in or in your home country. This is because there are no hedge funds registered in countries with high tax rates.

If the country you live in is a tax haven known for its low tax rates, there are hedge funds. On the other hand, if not, you cannot invest in real hedge funds unless you invest offshore.

Open an Offshore Investment Account and Invest in Hedge Funds

Invest in hedge funds in tax havens rather than in your home country or country of residence. The way to invest is to open an investment account through an insurance company registered in a tax haven.

You can invest in stocks, bonds, and hedge funds around the world by using an offshore investment account offered by an investment company. However, if you want to invest in stocks and bonds, there is no point in using an offshore investment account because you can open an account at a securities company and invest.

On the other hand, you cannot invest in hedge funds through a brokerage firm. You can only invest in hedge funds by using an offshore investment account. Therefore, you should understand that an investment account in a tax haven is an account for investing in hedge funds. For your reference, the following is the management screen of my offshore investment account.

You do not have to be wealthy to open an investment account in a tax haven. If you can invest a lump sum of US$30,000 in cash, you can open an investment account to invest in hedge funds.

There Are Various Hedge Funds to Invest in

The most important thing is to decide which hedge fund you want to invest in after you open your account. Insurance companies in tax haven only provide investment accounts, and it is up to you to decide where to invest.

The most important factor is the IFA (Independent Financial Advisor). Offshore investments must always be contracted through an IFA. An IFA also advises you on which hedge funds to invest in. The hedge funds that you can invest in depends on whether the IFA knows the good hedge funds or not.

For example, I use an offshore investment account to invest in the following funds.

It is a fund that deals in real estate loans and has an average annual interest rate of 13.26%. It is not a hedge fund that invests in stocks or bonds, but a fund that earns interest income from real estate loans, making it a low-risk investment. Although the annual interest rate fluctuates, there have been no negative return years in the past.

On the other hand, there are high-risk, high-return hedge funds that invest in stocks, bonds, forex, and futures. In this case, you can aim for an annual interest rate of 20% or more, even after deducting fees. However, this fund can have negative returns in some years.

There are high-risk hedge funds, and there are low-risk hedge funds. Make sure to discuss with your IFA which hedge funds you want to invest in according to your risk tolerance.

Investing in Hedge Funds Excellent for Non-residents in Home Country

There is a right way to invest for foreign residents and expatriates. It is not to invest in the country where you are currently living. In other words, non-residents in their home country must manage their assets through overseas investments. One of the best ways to do this is through offshore investment.

In the case of offshore investment, the investment company supports all banks in the world. Also, when you invest your assets, the currency is the US dollar, not an unreliable currency.

So, use an insurance company registered in a tax haven to open an investment account to invest in hedge funds. After that, you can choose which hedge funds to invest in by discussing with your IFA.

There are different types of hedge funds, ranging from low-risk to high-risk. Also, the annual interest rate of each hedge fund varies greatly. Whether or not you can invest in excellent hedge funds depends on your IFA, so you should start by looking for a good IFA for your offshore investment.