You Can Take Your Self-Directed IRA Offshore

There are traditional IRAs, and then there are self-directed IRAs. Both have their perks, but it’s likely that one type appeals more to your own personal situation than the other. The traditional IRA is one that is held at a brokerage firm. You’ve probably heard of a few of them, like Charles Schwab, Merrill Edge, or TD Ameritrade. This brokerage will offer you terms for the investments you can purchase through them, and those investments are usually within the category of stocks and bonds. They take a small percentage of what you put in for managing your account and offer you a certain percentage as well. Then, there are self-directed IRAs.

When making use of the self-directed version of the IRA, you choose your custodian, who then charges a flat rate per investment and helps you to direct your investments where you wish. Use of a custodian helps you keep from making any prohibited purchases with your investments, and keeps you from mistakenly doing anything that would get you in trouble with the IRS. Unlike brokerages, however, the custodian does not select any investments for you. Self-directed means you get to choose your investments and request that the custodian invest accordingly.

Taking the Self-Directed IRA Offshore

When you’ve found the custodian who deals in offshore IRA investments, you can request that funds be delivered offshore. Remember that this is important even if you only plan on putting 1 or 2 investments offshore, since a custodian can keep you out of trouble by practicing the correct legal work.

The types of investments you can make overseas would be the same as what you could make in the United States, but be sure to research the best possible investment items ahead of time, before making such a move. Try going to the country and visiting real estate locations before investing in them.

In order to actually move your funds over, you’ll have to request a transfer via your custodian. This will require a decent amount of paperwork, explaining the terms of the investment and showing proof of where the money will be allocated. Be sure to name your investment based on the name of your custodian while you’re at it. That name should be the one on your assets, rather than your own name. Once your investment is processed via your custodian, who will review it according to all rules and regulations, you’ll be free to manage your IRA funds.

When managing your investments, it is important to note that any expenses acquired because of that investment must be paid using IRA funds, and not funds from your own pocket. Keep the money flow within the IRA and revolving as necessary.

With this offshore option, you have the luxury of having a custodian to review each of your investments for compliance with all laws and regulations. That’s a nice way to keep stress off and keep from worrying about accidentally slipping up.

The Offshore IRA LLC Option

There is one other way to move your self-directed IRA funds offshore. That is through creating an offshore IRA LLC. When you start an offshore IRA LLC, you have to be careful to make sure that the LLC is not in your name, or in the name of your custodian, but is named after the IRA itself. You will need to list yourself as the manager of the account.

You’ll open an offshore bank account for this IRA LLC and your custodian will send a wire from its bank to your new offshore account. This method of running your self-directed IRA allows for you to have complete control over how the funds are allocated. The risk is high, too, though, because you will no longer have a custodian looking over your account to make sure all laws and regulations are followed. This will now be your responsibility.

Perks to moving offshore and keeping your investments in an offshore bank account usually involve that country’s particular rules around asset protection. Some countries, like Belize, have strong asset protection that the United States doesn’t have, so you can feel safer keeping your funds there. Other countries can also offer nice tax benefits to those who want to do offshore banking within their borders. When it comes down to it, just do some research to make sure that the offshore bank you’re choosing is within a country whose policies best meet your own circumstantial needs. Many Caribbean locations are highly recommended for this, so check them out!