Foreword:
It is wise to inform the reader / client that the services provided offshore will essentially be the same in nature as those provided from onshore centres, the reader / client will therefore, tend to find the following on offer:

Execution Only Services
Some clients do not require investment advice or management but only want the facility to place trades, they therefore contact a broker, bank or other such service provider and instruct them to place the trade required on their behalf.

Advisory management Services
Some clients are happy for their investments to be managed by an agent but they still want to retain control over decision-making processes, such as what to sell or purchase and when those orders should be placed, this is the essential feature of an advisory service as the client would be consulted on all investment matters. This can create additional work and administration time for the agent and often you will find that the fees which are charged for the provisions of this type of service can be high and are often negotiated at the commencement of the relationship.

Discretionary Management Services
This is the most commonly used investment service in offshore centres. The service provider would be given complete control over the client's portfolio and would have absolute discretion over buying and selling decisions. The service provider would usually attend to all related administration issues such as the collection of dividends, dealing with corporate actions (such as rights issues) and arranging the safe custody of the certificates.

Agents are generally more willing to provide this type of investment service as they will be able to perform a full management function with minimum interference.

THE ADVANTAGES of OFFSHORE INVESTMENT SERVICES for CLIENTS

There are a number of reasons why a client might decide to have their investments managed offshore but perhaps the following are the most common.

Confidentiality
Offshore centres can generally provide a greater degree of confidentiality than onshore centres. Indeed, as we have already seen when looking at banking services, some centres have implemented legislation designed to provide statutory protection of information.

Taxation
Depending upon a client's taxation position, it might be possible for the income and capital gains generated from a portfolio which is registered and managed offshore to be retained by the agent in the offshore centre tax-free until such time as the income or capital is remitted to the client.

This method of tax deferral is a widely used and important tax planning device.

Regulation
The lack of regulation and reporting requirements relating to investment business in many offshore centres provides appeal to some clients who prefer their agents to proceed with their affairs with the minimum of outside interference or restriction.

Professional Management
Most offshore centres can boast a number of sophisticated and professional investment service providers who have experienced and qualified staff with knowledge of a number of world markets.

Convenience
In view o the number and geographic spread of offshore centres, it is possible that a client might be closer, in terms of distance, to an offshore service provider that to an onshore service provider of equal experience and competence.

POSSIBLE DISADVANTAGES for CLEINTS

Despite the potential benefits there are also possible downsides to locating investment services in an offshore centre and these could include the following:

Lack of Regulation of Agents
Not all centres regulate or have a system to supervise the provision of offshore investment services. By appointing a service provider in an unregulated or unsupervised jurisdiction, there is a greater risk of that agent acting outside the scope of their powers and obligations under the terms of nay client agreement which may have been executed in addition, there might not be any redress available to the client under local law in the event of a default on the part of the agent.

Control
It can be very difficult for a client to monitor, or in some cases, control the actions of his investment agent if hi is located in an offshore centre.

Contact (by telephone, fax or meeting) may also e another hurdle in view of the geographic distance which may exist between the client and his offshore adviser.

Reputation
Very few offshore centres have their own stock market which means that most trades for offshore-based portfolios have to be placed via an onshore market, this can add to the expense.

Location of the Service / Client Information
Clients should also chick where the investment services are being performed, this is important because some offshore investment management services are in fact being performed in onshore centres (perhaps on London or New York). This would not affect the quality or standard of service but there could be a confidentiality issue as client information would have to be held by the agent in the onshore centre which might make that information subject to onshore disclosure on the powers of the investment agent.