The key driver of popularity for offshore investment is that many expatriates want to avoid the situation where they have 'bits and bobs' of investments scattered around the world. They lose track of what is invested where and are, often, presented with logistical issues when attempting to gain access to, or manage, the investment after they leave that particular place. Offshore investing irradiates these irritations.

Furthermore, the tax efficiency of the international investment centres is often seen as an 'added bonus' for those individuals who make use of these investment areas.

First, let's look at what the term 'offshore' does not mean. It does not mean investing in a small, shady, semi-legal island state somewhere where the rules are informal, at best, and they could be here one day, gone the next. Far from it. Today's offshore centres represent the very best in international wealth management:

Examples of these premier investment centres include the Isle of Man and Channel Islands, or EU Member States such as the Republic of Ireland, Luxembourg and Cyprus. All of these jurisdictions benefit from stable governments, strong regulatory controls and measures to protect investors.

When somebody decides to make use of an international investment centre for their financial needs it is to get capital, which they already have, working harder for them and thus generating a return. Or, it is about redirecting a proportion of their income, every month, to work towards building a fund of money for the future to address future financial demands such as retirement or child university costs.

With inflation running at 3 percent plus and banks only returning 1 percent, it is imperative that you have your money working as effectively for you as possible. Otherwise, you are in effect losing money each year.

Many offshore jurisdictions offer the complimentary benefit of secrecy legislation. These countries have enacted laws establishing strict corporate and banking confidentiality. If this confidentiality is breached, there are serious consequences for the offending party. An example of a breach of banking confidentiality is divulging customer identities; disclosing shareholders is a breach of corporate confidentiality in some jurisdictions. However, this secrecy doesn't mean that offshore investors are criminals with something to hide.

With offshore investing the tax advantages are more about tax control rather than tax avoidance. What this means is that because your investments are based in a tax-neutral investment area, you are normally able to decide where and when you pay tax on your investments. For instance, imagine that you have been paying EUR 500 a month into an offshore retirement investment plan for 20 years.

Now in year 19 of the plan, you are looking forward to gaining access to your 'nest egg' and putting your feet up during your retirement. You are now resident in Ireland and have accumulated some gain payable on your retirement investment plan. So, what can we do to limit our tax liability? Well, what you can do is establish your tax residence elsewhere and in that place cash in the investment. For example, you decide that you will take a consultant's job in Holland for a few years, just to 'top up your final retirement fund', and thus not put your feet up just yet... As the Netherlands does not impose Capital Gains Taxes on investments, you could cash in your investment while you were resident there and upon returning to Ireland, would have availed yourself of any Irish tax liability.

In short, offshore investments offer a highly appropriate solution to the transient expatriate who wishes to invest and make financial plans, for his or her future, without the inconvenience and disruption of needing to re-establish a fresh plan every time they should move jurisdiction. The offshore plan will move with you.