Offshore Banking refers to a bank that is located outside the depositor’s home or domicile country. These offshore banking establishments are usually located in a tax haven or low tax jurisdiction that provides a combination of financial, tax and legal benefits. There are several advantages to offshore banking that typically include greater privacy, tax asylums, easy access to deposits. Offshore banking can also provide protection against local, political and financial volatility in the depositor’s home country.
Offshore banking accounts for a large share of the global financial ecosystem. Popular offshore banking locations include Switzerland, Cayman Islands, The Isle of Man, Hong Kong and the Bahamas. Swiss banks account for nearly 35% of the world’s offshore funds. Offshore banking applies to any investor who is looking to set up an offshore bank account. This kind of banking enables an investor to diversify his investment, invest in a favorable tax environment and consider financial products that are not available in his country of residence.