Invest offshore to diversify your portfolio and take advantage of global growth opportunities. But, what are the best countries for investing your money? Forbes provides a list of countries and suggested investments in a recent article. The first nation on the list is Portugal!
Buy: Global X FTSE Portugal (PGAL)
Why: With its banking issues from the summer of 2014 largely contained and fiscal policy improving, Portugal will lead the pack in any Eurozone recovery scenario. In terms of fiscal policy, Portugal is mostly improving. The top corporate tax rate was reduced to 21% this year from 23%.
Read the article for the details. Here is a list of the best countries for investing your money from one to ten:
Safe Bets and Improving Conditions
The global economic downturn is slowly but surely getting better. There are a lot of stocks that suffered greatly after the 2008 market crash. And there are deals to be found. The best rationale is to invest in safe economies and look for undervalued stocks or index funds. South Korea and China are both at stock market highs which means you probably want to look elsewhere. China is also considering taxing foreign investors according to Reuters, which is another reason to look at the other nine countries on the best countries for investing your money list.
China is considering taxing foreign investors for their share-trading profits going back to November when Beijing announced an exemption of such duties after the launch of the Shanghai-Hong Kong connect scheme, the stock regulator said on Friday.
China’s two largest portfolio investment schemes for foreigners, known as the Qualified Foreign Institutional Investor (QFII) and the renminbi-denominated version of the same programme (RQFII) will likely be subject to a 10 percent corporate income tax until Nov. 16, 2014, retrospectively.
The China Securities Regulatory Commission (CSRC) said on its official Weibo on Friday that such a move would be in line with China’s income tax laws. Its comments confirm a Reuters report in February citing sources that such a plan was being considered.
If an investment pays well enough it is just a business expense to pay taxes. But when other nations provide equal or better investment opportunities and lower taxes it is a simple decision where to invest your money.
Funds, Stocks or ADRs
If you are fluent speaker of Portuguese and have an account with a broker in Portugal direct investment in a local stock or local stock index fund may be a good approach. However, there are ten nations on Forbes’ best countries for investing your money list and it is unlikely that you will be able to deal efficiently in each national language. Thus US based funds that focus on specific countires are a decent approach and so are ADRs (American Depository Receipts). Investopedia defines American Depository Receipt.
A negotiable certificate issued by a U.S. bank representing a specified number of shares (or one share) in a foreign stock that is traded on a U.S. exchange. ADRs are denominated in U.S. dollars, with the underlying security held by a U.S. financial institution overseas. ADRs help to reduce administration and duty costs that would otherwise be levied on each transaction.
ARDs are a good way to invest in foreign stocks. Level I ADRs trade on US stock exchanges and are subject to the same disclosure requirements as US stocks making your research into stock fundamentals as safe and accurate as when buying US stocks. If you want to diversify your portfolio with stocks from the best countries for investing your money consider buying American Depository Receipts on the NYSE or NASDAQ.