Global investing is the buzz word today. Every magazine, TV channel, website is talking about the merits of diversification and why we should not be keeping all our money parked with Mother India.
Now as usual I am always wary of anything that is the flavor of the season. Hell I don’t even eat the most popular dishes in a buffet (recycled in most of the cases, so).
So any ways the logic being given is that if your entire portfolio is invested in
My first question is how many people in
Here is how it must be working
- Corrupt neta shows that he has got some money in form of agriculture income (Ever wondered how all our politicians love to call them son of soils).
- This tax free money is invested abroad in some tax haven. More money is pumped out through havala. Now suddenly the money invested by our neta makes a lot of return outside of
Indiaand is brought back to in form of income in USD, again tax free. India
- Suddenly the black money is white and we can file our IT return and our money becomes legal.
- IT is again invested in property etc.
But is investing outside of
I think not. Given below are my reasons:
- The amount of money most of us have to invest does not make sense to take it outside of
. As the cost of transactions outside India are very high. E.g in US most of brokers will charge almost $5 for even small transactions. India
- The exchange rate fluctuations can easily wipe your profit out.
- Tax treatment of these investments is fairly complex and requires expertise in tax laws of more than one country.
But most of all when the world is coming to