Can I Move My IRA to an Offshore Account?
Moving an IRA (or 401K) offshore significantly expands your investment possibilities. Switching your retirement account over to a Self-Directed IRA LLC gives you access to overseas bank and brokerage accounts as well as foreign hedge funds, real estate investments and even private businesses for investment purposes.
Diversifying into emerging market currencies and protecting them from civil creditors are two additional benefits of doing so, which we will outline here.
Moving an IRA (and/or 401K, 403B, etc) offshore does come with its own set of consequences; depending on which method is chosen, this could become a taxable event that needs careful planning to avoid immediate tax liabilities. Therefore, professional tax advice should always be sought prior to initiating such transfers.
Step one in moving an IRA offshore is creating a Self-Directed IRA through an IRA custodian who facilitates international transactions. This type of account allows clients to manage investments such as private companies and real estate independently while traditional custodians tend to limit the investments available solely through stocks, bonds and mutual funds.
Once this account is set up, an offshore company is formed in the name of the new Self-Directed IRA and funds are transferred via wire from this account to accounts opened under its name.
Moving your IRA offshore provides numerous investment opportunities not available through conventional custodian accounts, including real estate investments, private companies, mortgages and precious metals both inside and outside the United States.
However, in order to comply with IRS rules regarding “prohibited transactions,” you will need a Self Directed IRA LLC in place. This allows you to invest your retirement funds in various assets – from IPO stocks and foreign real estate investments through to investing in private placement stocks and derivatives. To do this successfully, an offshore company owned by your IRA needs to be created whereby as Manager/Member you have checkbook control over this company and its assets; we can assist with this aspect of your overall strategy!
Acquiring offshore assets through your IRA is easy with the right custodian. Most US-based IRA custodians make money selling investments directly to clients, and don’t want you to move your IRA assets away or into an offshore entity such as an LLC.
Transferring your IRA funds to an offshore Self Directed IRA provides you with the ability to invest in virtually anything imaginable – real estate investments abroad, precious metals and foreign currencies trading on foreign exchange, private equity investments in offshore hedge funds or companies, or anything else of your choosing.
An offshore IRA is established with an offshore company, which serves as its international banking arm, enabling you to open offshore bank accounts and investments, purchase international real estate or leveraged investments, own vehicles, invest into private companies and much more. Furthermore, you have direct “checkbook control” over this offshore company; thus removing the need for custodianship while widening investment options exponentially.
There are various steps that you can take to protect you and your investments from government intervention, but one of the most essential is working with an advisor who understands offshore structures.
One effective strategy is to switch custodians that do not make money by selling investments or providing advice; rather, they charge a flat annual fee and thus less likely to engage in prohibited transactions with your IRA.
Moving your IRA offshore can be a relatively straightforward process. A new Self Directed IRA account must first be set up, with funds then transferred into it. From there, the funds can be invested through an offshore company with you as manager – giving you greater options such as foreign real estate investments or IPO stocks; in some instances physical precious metal purchases might even be possible – just some examples to get you started!