The Top 3 Secrets to Safe Offshore Investing

Michael K. Cobb


The Top 3 secrets to offshore investing can be cast as something that shady characters do but let’s be real, all multinational companies are by definition, “offshore investors.”


So are millions of private citizens who can acquire a condo in the Caribbean or Cancun, an American who buys a cabin in Canada, or a Canadian who invests in a place in Phoenix, Arizona. Offshore investing, when engaged in prudently, makes sense for hundreds of millions of people worldwide.

So, why all the fuss? Does offshore investing deserve to be associated with illicit activity? What makes offshore property purchases seem so exotic?

Well, for most people in the world, it isn’t an extreme idea. Europeans have been investing cross border the way U.S. folks have invested across other states for centuries. Many nations create laws to encourage their   citizens to invest offshore, even to become expatriates, to gain influence and a foothold overseas. Individuals seeking higher returns on their investments find them in developing markets.


So, this isn’t a new concept. In fact, it’s ancient. And the upsides to diversifying assets overseas are many and powerful. But caution should be heeded. Here are three simple yet highly effective rules to follow when engaging in offshore investing.

Top 3 Secrets to Safe Offshore Investing: Stay Legal

The first rule is to do business legally, especially in your home country. All countries have rules about taxation and reporting income. There are two different but important factors to keep in mind — always. Many nations, like Canada, tax citizens on residency which can provide an incentive to buy offshore property and live there. Other countries, like the United States, tax citizens on their worldwide income, regardless of where they reside.


One major requirement that many people fail to recognize is that even if you earn no income overseas, certain governments have laws that call for declaring the existence of offshore structures. For U.S. citizens, there are a couple asset classes that are exempt from reporting. But for the rest, reporting is mandatory. Failure to report the existence of an offshore bank account, trust, company, or other entity can result in huge fines and even jail time.

Compliance is simple. With it, you stay on the right side of the law. The list here is a sample of requirements.

Canadians need to file a T1135 for most offshore assets. U.S. residents and citizens may need to file an 8938 or a 5471. Bank accounts require separate reporting. Retaining tax and legal professionals is always wise to ensure that you are complying with all the laws and regulations that relate to each specific case.

Top 3 Secrets to Safe Offshore Investing: Stay Humble


One huge character asset we can possess, or acquire, when going overseas is humility. This attribute is the one that really helps us to be open to the fact that we don’t know what we don’t know and lets us forget what we think we know.

Humility is the synthesis of these two concepts.

We don’t know what we don’t know.

You might be saying to yourself, “Okay. But how can we know what we don’t know?” It’s a great question. Obviously, we can’t. But we can slow down and be open to new possibilities. We can watch and listen for new realities that are different from ours back home.

What we need outside our home turf is a willingness to listen more, hear what doesn’t make sense, acknowledge it and try to fit that weird data into our analysis. When we are humble, we can allow others with more experience to guide us through unknown territory. Ultimately, our choice is really finding humility or paying attention.


Top 3 Secrets to Safe Offshore Investing: Stay Awake

When going overseas, especially to places that feel familiar, we must be careful. Very, very careful. In fact, the more familiar the setting seems, the more careful we need to be. Because most places outside North America are the land of “buyer beware.” Stay sharp.

First, forget what you think you know. Some assumptions are good. But many will be liabilities in this new, foreign environment. Because you don’t know what you don’t know, there’s no way to know which assumptions are valid.

We assume because it makes life easier. Flip the light switch, the light comes on. Assumptions also let us filter out unwanted noise and reserve brain power for other things. But this filtering mechanism can be an Achilles Heel unless we understand that we are indeed filtering.

Many people simply assume that the laws overseas are similar to back home and are there to protect us as consumers. Consumer protection is just one of the assumptions people bring. There are many more things that people take for granted or assume. Construction standards in North America, may not be standard in Latin America.

Acceptable broadband, water pressure, zoning restrictions and a whole host of quality-of-life factors cannot be assumed. They must be verified.

Success means turning off our filter as best we can but it’s not easy. Always living on your toes, ready to see something that doesn’t make sense takes work. But it is necessary, if we want to make wise property ownership decisions overseas.

Top 3 Secrets to Safe Offshore Investing: No Science

The bottom line is that there are numerous wonderful offshore investments out there. Some are probably right for you. Secure the tools you need to make wise, prudent, and measured investments and join the ranks of successful offshore investors for greater diversification and higher yields.

For those interested in the top 3 secrets to offshore investment, I recommend learning the critical “Must Ask” questions, guiding principles and, of course, my exclusive tips. Request your complimentary copy of the “Consumer Resource Guide,” then keep it handy and refer back as often as needed during your international journey.

Get Your Digital Copy of the Consumer Resource Guide, now!


Michael K. Cobb

Chairman and CEO of ECI Development

14 Years Living as an expat in Latin America

Contact Me

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