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A banking transaction where a person deals with an external banking institution that is not located in the country of residence or beyond its jurisdiction is defined as offshore banking. Someone will indulge in offshore banking only because it has the promise of giving some tax benefits or at least some kind of added security and confidentiality. The concept originated from the habits of the UK residents to open an account in the Isles of the British Channels, which offers some very attractive tax benefits. These places were really offshore and they were great for tax benefits. These islands become great attraction spots due to their tax incentives and lenient rules.

You will find that offshore banking is liberally regulated because of the less restricting nature of their government policies. You can open more kinds of offshore banking accounts and manipulate them in various ways. Such banking moves about ,000,000,000 each day around the globe. There’s a vast difference between now and the time when the few offshore accounts that existed were considered to be options for covering up for drug money and other illegal kinds of money.

Whatever services your domestic bank can provide you with, the same services are available through your offshore bank. Checking accounts, savings accounts, personal accounts, corporate accounts – all are possible through such banking. You can also make use of the host of other features they provide such as ATM cards, debit cards, credit cards (all internationally accepted) and avail of loans and mortgages and money transfers. Using just numbers instead of names, you can get better anonymity from these accounts.

Other features that some of these offshore banks provide include investment management and custody. These banks also provide for trustee services, corporate administration services, foreign exchange and wealth management. So all of them may not have all the features listed here. A retail bank has more standardized services and they are more cost-effective than private banks. Personal banking, while expensive, provides a set of personalized features that clients can use.

The best advantage of offshore banking is that your information is totally private; offshore banks are not obliged to release your personal or business details to anyone. Your government or tax authority will get this information only if they can prove your involvement in some criminal activity. So if they don’t know about any involvement, or cannot prove it, then they cannot appropriate anything from you.

Your money grows tax free because these offshore banks are located in regions that are called as tax havens. Getting relief on tax is an important advantage of having an overseas account. Yet, this tax benefit cannot be termed as total. Offshore banking brings another benefit, which is termed as asset protection. When you hold offshore accounts, you will find that there are much less chances of becoming a victim of invasive bureaucracy, seizure of your assets and even some lawsuits.