| Offshore banking, by its very definition, is a bank that is located outside the depositor’s country of residence.
Offshore banking, by its very definition, is a bank that is located outside the depositor’s country of residence. More times than not, this involves a country whose tax jurisdiction is more favorable than one home banks. There are also legal benefits and more importantly privacy not available at home. While the entire industry suffers from a cloak and dagger type status, there are legitimate reasons for using offshore banking, offshore trusts, and offshore corporations to an individual’s or company’s advantage.
Most think of low profile millionaires whose road to wealth is somewhat questionable but consider the alternative. There are areas of the world where offshore banking is safer than the political climate of one’s homeland. Would you want to be a depositor in any Russian bank in the roaring 90’s? Maybe you are a wealthy sugarcane farmer in a third world country in the Mediterranean; would you trust your local currency to your state run bank?
Also consider the ability of lower cost banks in other regions being able to offer better rates than available at your local bank, is it worth the risk? This is going to depend on you doing your homework. One downside is the typical offshore bank is remote, so access to information can be difficult.
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