What are offshore bank accounts?
For a bank account to be considered “offshore,” it must be in a different location than the country of residence of the depositor. There are official offshore financial banking centers throughout the world.SignificanceOffshore banks provide privacy to depositors and often they pay interest without deducting tax. If a depositor lives in a country where assets may be seized or frozen, it benefits them to have money offshore, where only they have access to it.Client TypeAlthough offshore banking is perfectly legal, many people associate the act of it with organized crime. However, many upstanding — and usually wealthy — individuals use offshore accounts as well.StatisticsAccording to Merrill Lynch and Gemini Consulting, one third of the wealth of the world’s “high-net individuals” is held off shore, equaling approximately six trillion dollars. Tax havens (a type of offshore bank) hold 26 percent of the world’s wealth.DisadvantagesOffshore banks can be in remote places and are less finan
