Why should you open an account with a financial intermediary abroad (a bank, brokerage, trust, partnership or shell company)?
Because they can allow you to legally reduce your tax duties and have higher returns and lower risks in your investments.
(1) You must pay taxes in your place of fiscal residence. Your place of fiscal residence is usually where you live, but that is not always the case. Therefore, except if you are a US citizen, you can reduce or even remove all your tax duties by moving all your financial assets abroad (i.e. opening an account with a financial intermediary abroad) and switching your fiscal residence from a high tax to low tax jurisdiction. If you have enough wealth, it is easy to move your fiscal residence and, in fact, you may be working to lose money. (How could it be legal?)
(2) In the vast majority of countries, capital gains are only taxed when the gains are realized. For example, if you buy a stock and only sell it 5 years from now, you will only need to pay taxes on those gains 5 years from now. Thus, even if you currently live in a high tax country today, you can open an account with a financial intermediary abroad in a jurisdiction that do not tax non-resident capital gains. For example, if you are not a US citizen or US resident for tax purposes, capital gains from stocks and bonds made in the US are not taxable. Within the Eurozone, many jurisdictions do not tax capital gains of non-residents. Consequently, if you buy stocks today through a brokerage in one of those countries and only sell when you are a fiscal residence of a low or no-tax jurisdiction, you can possibly reduce your capital gains tax to zero. (How much wealth do I lose by paying capital gains tax?)
(3) If you have a bank account abroad, when traveling (especially to countries that do not accept credit cards very well, e.g. Spain, Italy, most developing countries), you are not required to carry large amounts of cash, pay fees, and accept very unfavorable exchange rates charged by your home bank. (How can I decrease exchange rate fees to a minimum?)
(4) Trusts, partnerships, and shell or shelf companies abroad, can also allow you to legally avoid death taxes, gift tax, generation-skipping tax, and wealth tax. For example, trusts can be used to use full gift and death tax exemptions and partnerships can be used to de jure devalue an asset you own. If you move your house to a family limited partnerships, it will drop its market value considerably because buyers much rather buy a home they have direct control than a share in a company that owns your house. Therefore, its market value will decrease which will potentially minimize or remove your wealth tax, estate tax, and/or inheritance tax duties, legally. This is especially useful for assets you have no intention to sell. If you have intentions to sell the asset, you can reallocate capital to assets that are often not taxable for wealth tax or death taxes, like human capital and works of art. (How can I avoid all types of taxation legally?).
(1) If you have a brokerage account abroad, it gives you access to many more investment options that may not available in your home country, such as extremely low-cost index funds, small and value stocks ETFs, emerging markets. For example, the US accounts for roughly 50% of the world's stock market capitalization. It has a larger number of companies listed and a highly liquid market, which decreases risks of not having a buyer when you want to sell your stock or a seller when you want to buy it. However, the London stock exchange is the most international in the world with approximately 2,200 companies from more than 70 countries represented. Brokerage firms in Europe allow customers to buy and sell assets in more than 20 countries without losing money by constantly having to exchange currency. (Why do I need more investment options?)
(2) Individuals cannot buy most foreign bonds from their home country's bank or brokerage accounts unless they are willing to invest a high amount in one single bond (usually 100 thousand dollars is the minimum required for investing in any emerging market and also for many developed countries’ bonds). Different than stocks that can have negative growth (i.e. you can lose money), bond investment never has negative nominal growth. You will always increase your capital from the perspective of the currency denomination of the asset. In other words, if you buy, for example, a US Treasury Inflation-Protected Security Bond ETF you will not lose money from a dollar perspective but you can lose money if the dollar depreciates in relation to other currencies, i.e. currency risk. Bonds can be prefixed (i.e. you know exactly how much you will earn in a given period) or pegged to multiple factors, such as inflation or interest. (Why should I buy foreign bonds?)
(3) If you have a brokerage abroad, you can protect yourself against currency risk when you buy enough assets in foreign currencies because currency exchange is a 0 sum game. That is if currency X is depreciating against currency Y, currency Y must be appreciating against currency X. Local banks or brokerage firms usually do not hold foreign currencies or allow you to buy assets in foreign currencies. And if they do, their variety of investments is very limited and/or they charge very high fees for those investments at terrible exchange rates. (Why should I invest in other currencies?)
After you have your foreign bank, brokerage, trust company accounts or shell company is opened, we can help to construct a "perfect" investment portfolio. What is our investment philosophy?