Offshore

Loading the player...

What is 'Offshore'

1. Located or based outside of one's national boundaries. The term offshore is used to describe foreign banks, corporations, investments and deposits. A company may legitimately move offshore for the purpose of tax avoidance or to enjoy relaxed regulations. Offshore financial institutions can also be used for illicit purposes such as money laundering and tax evasion.

2. Offshore can also refer to oil and gas drilling operations that are conducted in the ocean.

BREAKING DOWN 'Offshore'

Many countries, territories and jurisdictions have offshore financial centers (OFCs). These include well-known centers like Switzerland, Bermuda and the Cayman Islands, and less-well-known centers like Mauritius, Dublin and Belize. The level of regulatory standards and transparency differs widely among OFCs. Supporters of OFCs argue that they improve the flow of capital and facilitate international business transactions.

RELATED TERMS
  1. Offshore Mutual Fund

    A mutual fund that is based in an offshore jurisdiction, which ...
  2. Pirate Bank

    A type of offshore savings account used by a wealthy individual ...
  3. Tax Haven

    A country that offers foreign individuals and businesses little ...
  4. Foreign Deposits

    A deposit made at, or money put in to, domestic banks outside ...
  5. Offshore Banking Unit - OBU

    A shell branch located in an international financial center. ...
  6. Bermuda Stock Exchange - BSX

    The stock exchange headquartered in Hamilton, Bermuda.
Related Articles
  1. Economics

    Why Do Companies Go Offshore?

    The term offshore simply means to be located or based outside of a nation’s boundaries.
  2. Savings

    How To Open And Access An Offshore Bank Account

    You don't have to be a master criminal or billionaire to open an offshore bank account. This article will walk you through the process.
  3. Taxes

    The Top 10 Caribbean Tax Havens

    Discover relevant tax policy information about the top 10 tax havens located in the Caribbean, including the Cayman Islands and the Bahamas.
  4. Wealth Management

    How To Open And Access An Offshore Bank Account

    Opening an offshore bank account does not require a high level of financial sophistication. It’s a lot like opening an account at your neighborhood bank.
  5. Personal Wealth & Private Banking

    Offshore Banking Isn’t Illegal. Hiding It Is

    If you want to put your money into an offshore account, go ahead. But be aware that it won’t be exempt from taxes.
  6. Forex

    Steps To Open An Offshore Forex Account

    Here is a simple breakdown of how to open an offshore forex account for US-based users, including legal requirements.
  7. Forex Fundamentals

    Steps To Open An Offshore Forex Account

    Offshore forex accounts offer favorable tax treatment and less restrictive regulations. Here’s how a U.S.-based investor can open one.
  8. Investing

    How Shackling Offshore Banks Will Impact You

    FATCA regulations have cast a wide net on offshore banking activities, and many innocent account holders might get caught in its tangle.
  9. Investing News

    Offshore Accounts Hold a Tenth of the Stock Market

    According to Gabriel Zucman of UC Berkeley, fully 9% of the market capitalization of the U.S. equity market was held in offshore accounts in 2012.
  10. Your Clients

    Panama Papers: What Advisors Need to Know

    Here is how clients may be impacted by some of the issues brought to light by the Panama Papers.
RELATED FAQS
  1. Why Is Panama Considered a Tax Haven?

    Learn about the offshore tax haven of Panama, and discover the legal and tax structures that make Panama a premier Caribbean ... Read Answer >>
  2. Why is the Cayman Islands considered a tax haven?

    Find out why the Cayman Islands is considered a tax haven and why this location is so popular among those looking to reduce ... Read Answer >>
  3. Can foreign investors invest in US hedge funds?

    Understand whether foreign investors are permitted to invest in hedge funds that are based in the United States, and find ... Read Answer >>
  4. Why is Andorra considered a tax haven?

    Find out why Andorra is considered a tax haven and how developments have lessened its appeal due to increased taxation and ... Read Answer >>
  5. How do the average costs compare for the different types of oil drilling rigs?

    Learn the average costs to an oil producer for purchasing either land-based or offshore oil-drilling rigs and some factors ... Read Answer >>
  6. What are the tax incentives or disincentives to vertical integration?

    Merging companies through vertical integration can provide companies in the United States with a marginally advantageous ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center