The term offshore banks can unite a large enough range of credit, financial and banking institutions that conduct their banking activities outside the state of the depositor. Thus, any financial institution that meets these parameters can be referred to the category of the offshore banks. At the same time, in the international practice this definition refers to the banks which are located in jurisdictions with liberal financial and fiscal legislation – the so-called tax havens.
Speaking about the main areas of activities of these financial institutions, the following areas can be singled out:
- Opening of personal and corporate bank accounts and also the related services;
- Work with loan products and leasing programs, granting of loans;
- Insurance and investment activities;
- Repurchase and subsequent sale of the debt obligations (factoring).
Offshore banks – what it is and why so popular
The popularity of the offshore banks among the private business is caused by the number of advantages and opportunities, including:
- The minimum threshold of the initial and following administrative expenses;
- Independent position from the local Central Banks and regulatory authorities;
- Open access to the global credit and financial markets;
- Absence of strict currency exchange regulation from the state;
- Legislative protection of assets and confidentiality of the information.
