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Usually, the investment selections are governed by a standard criterion such as passive funds, low cost, no load, etc. But in the case of offshore investors, the criterion becomes even more complex. These complex criteria are established owing to the complex international tax issues. Offshore investors should not invest with the motive of escaping tax payments. Rather, they must be prepared to stay happy with whatever post-tax wealth they are able to amass. All off-shore investors must consult a certified and experienced consultant, experts in international tax laws, or a competent authority regarding the international tax laws.
However, not all countries encourage this practice. Some countries such as the US and Canada forbid and strongly discourage their residents from investing in offshore investment funds. Many countries such as Australia, Canada, Ireland, the UK and the US have even devised strategies to discourage offshore investments by providing their countrymen with fantastic investing options at a local level. Most of these investment options are highly competitive and in cases much more superior to any other offshore funds.
Another reason why the offshore funds have not become very popular is fear factor. Anticipating harassment and numerous other forms of hassles with the IRS related to tax reporting, and numerous instances of money laundering in offshore investments has prevented offshore investment market from creating a wide customer base.
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