Secret Finance

Offshore Banking

An offshore bank is a bank located outside the country of residence of the depositor, typically in a low tax jurisdiction (aka "tax haven") that provides financial and legal advantages. These advantages typically include some or all of

* strong privacy (see also bank secrecy, a principle born with the 1934 Swiss Banking Act)

* less restrictive legal regulation

* low or no taxation (i.e. tax havens)

* easy access to deposits (at least in terms of regulation)

* protection against local political or financial instability

* An alternative to oppressive governement taxation and Banking regulations.

While the term originates from the Channel Islands "offshore" from Britain, and most offshore banks are located in island nations to this day, the term is used figuratively to refer to such banks regardless of location (Switzerland, Luxembourg and Andorra in particular are landlocked).

It is possible to obtain the full spectrum of financial services from offshore banks, including:

* deposit taking
* credit
* wire- and electronic funds transfers
* foreign exchange
* letters of credit and trade finance
* investment management and investment custody
* fund management
* trustee
* corporate administration

Not every bank provides each service. Banks tend to polarise between retail services and private banking services. Retail services tend to be low cost and undifferentiated, whereas private banking services tend to bring a personalised suite of services to the client.

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Offshore Banking"