By Eric Streso, Certified Financial Planner, FPI.
21 November 2018; “Clients often ask me when they should invest offshore and I tell them now is the time, why wait until the next financial setback reduces your potential investment capital further,” says Eric Streso, a top-flight financial consultant, with more than 20 years’ experience in financial planning.
“South Africa is a relatively small financial market and, with the ability to invest up to R1 million every calendar year, without a tax clearance certificate, the opportunities multiply internationally.
“Here are markets, sectors or even companies outside the JSE that represent a wealth of experience and prospects. Utilising South African advice and expertise, clients are able to discuss the portfolios with an expert, who then advises and creates investment opportunities in various markets. I find the personal touch alleviates the understandable anxiety of venturing into a new monetary space. I encourage clients to ask questions, review portfolios and generally understand the complexities of offshore investments, taxes and regulatory practices.
“Investing in funds that are registered in foreign currencies can protect your investments in a hard currency and, if you plan to use the money overseas without bringing it back to South Africa, can potentially protect you from political and economic downturns at home.
“Ideally, one should be looking at $30 000 as an investment, with an investment period of 5-8 years, otherwise the returns may not be as lucrative as desired. One must also take into account capital gains tax, if you wish to realise your investment and convert it back to Rands. However, again if the rand has depreciated over this period, your capital gain is likely to be lower on your offshore investment than it would have be on a rand-denominated fund,” concludes Streso.