Georgetown Trust Blog

What To Do With Your Offshore SDIRA/LLC

Posted by Georgetown Trust on Mar 27, 2015 1:58:41 PM

OffshoreInvestingSDIRAThe benefits of having an SDIRA/LLC are clear. First, investors who move their IRAs offshore to self-direct them have greater freedom over the potential of their assets.

They can explore new opportunities for investment, many of which may be offshore rather than domestic. They can make split-second decisions based on their current needs and desired risk levels, and they can save money by legally reducing their tax burden and even cutting costs on management fees and expensive domestic financial advisers.

If you have established your own SDIRA/LLC, then discover what you can and can't do with it.

What is an SDIRA/LLC? 

An SDIRA/LLC is an IRA, or individual retirement account, that has been moved offshore and incorporated into an LLC, or limited liability company. Because of this move, the IRA can be self-directed, making it a SDIRA/LLC. 

This differs from a traditional IRA both because of its offshore location and its self-directed nature, both of which make it a smart move for those eager to make the most of their assets while they financially prepare for security in retirement.

How Can You Invest the Assets in Your SDIRA?

Once you have established an SDIRA/LLC in an offshore destination like Belize, you might be eager to make some changes. However, it is important to understand that self-directing your IRA does not give you carte blanche, as you will still need to follow local laws as well as annual IRA filings on the status of your IRA. 

The good news is that there are plenty of investments available for you to choose from. You might choose to invest in a new startup company in an offshore location, or you could purchase stocks on any of a dozen different international exchanges. 

You might want to spread your risk and reduce vulnerability by diversifying, which could be done through the purchase of foreign metals or even international real estate. 

With an SDIRA/LLC, you will have a wide variety of investments available to you, many of which simply wouldn't be options if you had kept your traditional IRA domestically.

What Can't You Do With Your SDIRA?

While an SDIRA/LLC boasts plenty of benefits and lots of options for investment, there are some limitations that you should be aware of. An IRA helps limit your tax liability, so it should not be used for your immediate benefit or for the immediate benefit of family members. 

That means you likely won't be able to legally use your SDIRA to buy a house and let a spouse or child live in it. You may be able to invest in valuables like gold, silver or other precious metals, but there are some physical valuables that don't qualify for your IRA. 

These typically include antiques, collectibles, coins or stamps. However, the limitations of your self-directed IRA are generally self-explanatory. As long as you are following the objective of the IRA, which is to invest for the future rather than immediate benefit or enjoyment, you will likely have all the financial freedom you require.

With these tips, you will be ready to start making investments with your newly established self-directed IRA/LLC.
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Topics: Self-directed IRA