IDEAS FOR TAX SAVINGS INVESTOR

The United States and Canada have mutual funds that operate in a similar manner. These funds are open-end funds, closed-end funds, and unit investment trusts. Those investing in offshore mutual funds may find that the term is used more broadly. It is used to refer to any type of collective investment. The names that the investor may see these referred by include open-ended investment companies, unit trusts, undertakings for collective investments in transferable securities, and unitized insurance funds. That may seem like a lot to swallow, but many investors find that their offshore mutual fund investment opportunities are not as restricted because there are more types of mutual funds to invest in.

When it's about differentiating both of them it's quite difficult to do, as both assist in making investment decisions. That involves choosing MF schemes as well. Both are the enrolled entities and managed by the different regulatory body. As the Mutual Fund Distributor is under and controlled by AMFI ( The Association of Mutual Funds in India). And the Investment Advisors are controlled by SEBI (Securities and Exchange Board of India).

Lifetime Annuity

Before moving on first understand a difference lets discuss that who are mutual fund distributor and investment advisor is?

Investment Advisor- A Investment Advisor is an individual or group who give financing and investment advice. Even manages securities analysis in return for a fee, whether by direct administration of client assets or by written publications. If he has sufficient assets to be enrolled with the SEC is recognised as a Registered Investment Advisor or RIA. Investment Advisors are also known as "Financial Advisors". He/she do an evaluation of the investor's assets, liabilities, income and expenses and advise investment plan.

Long Term Life Insurance

Mutual Fund Distributor - They be person or entity facilitating in buying and selling of MF units to the investors. They earn income in the form of commission for bringing leads(investors) for investing in MF schemes. He/she is expected to know the investor's situation, risk profile and suggest suitable investment plan to meet the investor's demands.

In understanding the difference between domestic and offshore mutual funds, it is important to know what these funds are. It is true that there are a number of different mutual funds that are available to investors, but the basic construction of a mutual fund is that it is created by a firm that takes the money of many investors and invests that money into stocks, short-term money markets, bonds, and other types of securities. It is then that the manager of the portfolio manages that money by investing and trading the underlying securities of that fund. What happens is that capital gains or losses are realized and those gains and losses are then passed to each individual investor.

There are tax advantages to the offshore mutual fund that individuals will not find with their domestic mutual funds. Unless one of the rare loopholes is found, United States residents will still be fully taxed on their offshore mutual fund. This is usually referred to as "foreign arising income" on IRS tax forms. Nevertheless, individuals have found that investor-friendly countries allow savings on investments through tax incentives. Some offshore locations, such as the Virgin Islands, do not require tax to be paid. This allows the portion of the gain that would normally go to tax to be reinvested.

Tax Savings Investor

There are certain organizations that argue that allowing no tax to be paid or reducing the amount of tax is a form of legalized tax evasion. However, tax incentives are a way for individuals to invest into that economy, making that economy even stronger.

Tax Planning

But what one will find is that there is a high degree of regulation when it comes to offshore mutual funds. One may find that there may be a minimum investment of $100,000 and that an individual is required to identify him or herself as a "professional investor." In the U.S., Canada, and various other countries around the world, a person does not have to be a professional investor to invest in mutual funds. They have brokers who can take care of that for them and guide them through the process or simply take care of 100% of the account transactions.

Save On Taxes

There may also be instances in which the number of investors is limited because of stipulations set forth in constitutional documents. It is these types of regulations that can limit the number of foreign investors in mutual funds, but they can prove to be quite profitable.