An offshore investment is when someone keeps their money/funds in an account or place in another country (outside of their own). There are many advantages for investing offshore and for why someone would want an offshore investment product.
Offshore investing often is seen as a bad thing for the economy and countries, but for the most part, most offshore investment products ARE legal. People are just trying to become more profitable on the money that they do have by investing outside of their home country.
Offshore investments aren't open to just those with very large accounts, many people can have these.
There are many reasons for why someone would want an offshore investment as well. Some reasons are listed below:
1. Tax advantages.
Other nations have lower tax rates, and this is very alluring for investors in countries where the tax rate is higher. These other countries have lower tax rates for many reasons, such as to gain new investors from other countries. This then brings new wealth into their country.
2. Less regulation.
There are more things that you can invest in, also with more privacy.
As stated above, there are more things that you can invest in, and therefore there is the possibility of more diversification. There are some things that certain countries do not allow investors to invest in, and with offshore investing, this makes the possibility of a portfolio to be more diversified.