Offshore investing and tax structure for Expat Canadians

by Aaron A Day on March 6, 2013

An estimated 2.8 million Canadian citizens live abroad, with naturalized Canadians leaving the country at a rate three times higher than those born in Canada. Statistics show that 57 per cent of all Expat Canadians live in the United States, Hong Kong, the United Kingdom or Australia.

Here is another compelling reason why an Offshore Investment, asset protection structure represents an opportunity for the individual or corporation:

Top 10 performing broad market indexes in 2012 (in local currency terms)

  • IMKB 52.6%
  • Egyptian Exchange 50.8%
  • Stock Exchange of Thailand 35.8%
  • Athens Exchange 33.4%
  • Philippine Stock Exchange 33.0%
  • National Stock Exchange India 31.8%
  • BSE India 31.2%
  • Warsaw Stock Exchange 26.2%
  • Deutsche Börse 24.8%
  • NASDAQ OMX Nordic Copenhagen 24.2%

This compares very favorably as alternatives to the US, Canadian or UK stock exchanges.

If this seems like too much risk for you and you’re worried about additional inflation in these emerging markets, you should consider Inflation Linked Bonds (ILB). ILBs work just like a conventional bond. The important distinction is the coupon and the principle are indexed to inflation; as inflation increases so does the coupon payment and the principle. In principle, this acts as a buffer if and when higher inflation rates begin hindering the emergent markets. As always, due diligence and sound economic advice are essential for guiding your portfolio development. Talk to your financial adviser about these emerging markets and how incorporating them into a balanced and diversified investment strategy may or may not fit the needs of your portfolio.

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