How to make your offshore investments using a trust

Knowing the steps to making offshore investments as easy as everyday banking.

  1.    Firstly obtain a prospectus. This may be downloaded from the website on which the fund is detailed. Reading the prospectus of all offshore investments should be part of your due diligence before choosing the fund and actually investing.

  You could call fund managers and request a prospectus for the investment you're considering but you might find in many cases that they will not send a prospectus to you if you live in one of the prohibited countries. This is because they respect the laws of your country which prohibit managers of offshore investments from soliciting money from your country.

  However if you are investing through a trust then you personally are not making the offshore investments - the trust is. As long as that trust is domiciled in a location which the fund is allowed to send information to then you may be able to get material sent to you either through the trust or directly. Alternatively you can have documents sent via mail forwarding services if you take the trouble to set them up. The advantage of mail forwarding services is that they give you another level of anonymity.

  2.    Obtain and fill out the application form. This may form part of the prospectus. If investing through your trust then this task is done by the trustee, not you personally.

  As measures to prevent money laundering and terrorist financing you will probably still have to pass the identity check as you do when opening a bank account:

   If you are investing directly as an individual:
- personal details
- permanent residential address
- date of birth
- place of birth
- nationality
- recent utility bill, credit card or bank statement to verify residential address
- certified true copy of passport, license or identity card (The certificate can generally be done by a lawyer, banker, notary, Justice of the Peace, or accountant.)

   If the trust is investing on your behalf it has to provide
- similar details for all the principals of the trust,
- a copy of the trust deed (or 1st and last pages)
- registration certificate if applicable
- details of registered office

  The requirements may vary from fund to fund but it should all be outlined in the prospectus or other documents obtainable from the offshore investments funds.

  3.   If making offshore investments through your trust you will apply to the trust for a debenture. Different trusts may do things a little differently. Generally the trust will have its own debenture application form for you to fill out.

  Details required will be things like:

Who is making the application - The name of the Entity could be a partnership name, a company name, a self managed superannuation fund or just a person's name. The type of entity is the legal structure of the entity applying - a partnership, a company, a self managed superannuation fund, an individual, two individuals etc.;

Address of that entity;

The amount of the debenture - i.e., how much you are investing (considered as a loan to the trust);

The term of the debenture - This is the period of time that you want the loan to be in place. You can select whatever time frame you like and submit that to the Trustee. As a rule, the minimum term will be for no less than 12 months, but it can be 3 years, 5 years, 6 years or 10 years;

The interest rate to be paid - The interest rate is the rate of return that you want to achieve on your funds. Once an application is made, the trustee will consider the interest return required by you and make a decision as to whether the trust can earn the necessary money so that the rate can be paid or not. In other words they will make an assessment of the fund or funds which you are investing in to determine whether the return being asked for is reasonable. Obviously if the fund makes more than the return on your debenture, that money stays in the trust until you redeem it;

Their frequency - how regularly you want the interest earnings from the debenture to be paid to you - it could be monthly, quarterly, annually or on maturity;

Date and name of applicant.

As the applicant you will probably have to produce certain identification to the trustee - If a company - the certificate of incorporation; if a self managed superannuation fund - a copy of its tax file number notification; if a partnership - a copy of its tax file number notification; if an individual - a copy of the photograph and signature page of your passport or a copy of your drivers licence (a form of photographic identity).

  4.    Lodge the debenture application - it can generally be lodged by mail, faxed or scanned and sent electronically. Remember to send with the application a letter clearly indicating the specific offshore investments you wish to place your money in.

  5.    Then you wait until the debenture has been approved. When it is approved you can send the money to be invested by telegraphic transfer. The trustee will provide you with the appropriate account numbers. Your bank will also more than likely charge you for the transfer.

   Now that you know how to do it you will need some of the best offshore investments to invest in.

You are here:
Offshore Investments - how to go about making your offshore investment through an offshore trust.

Mutual Funds - An explanation of what they are.

Mutual Fund Investing - How funds make money, how you make money from them, explanation of distributions and some special dates.

Offshore Investing Mutual Funds - an outline of why offshore funds beat all, and a bit about taxation.

Advantages - a discussion of the advantages and the disadvantages of these funds.

Types of Mutual Fund - a listing and explanation of all the different types of funds onshore and offshore.

Understanding the Mutual Fund Prospectus - an explanation of some of the main things to look for when reading a prospectus.

Choosing a Mutual Fund - 6 important things to consider before making your decision to invest in a particular fund.

Compare Mutual Funds - how to analyze what the 1 year, 3 year, 5 year and 10 year returns mean, and how to compare funds with those figures.

Mutual Fund Managers - A very comprehensive list in alphabetical order of many of the managers of mutual fund families around the world.