Pirate Bank

AAA

DEFINITION of 'Pirate Bank'

A type of offshore savings account used by a wealthy individual to hide assets, typically to evade taxes and/or commit illegal acts such as money laundering. A pirate bank is different from a traditional offshore account in that it uses advanced technology to make it more difficult to track down the account. The account may also be unnumbered and have a chain of ownership that is difficult to trace.

INVESTOPEDIA EXPLAINS 'Pirate Bank'

Offshore accounts are commonly located in Switzerland, the Cayman Islands and the Channel Islands and funded electronically via wire transfer. Offshore accounts are associated with greater confidentiality and security, and these characteristics appeal to law-abiding citizens as well as less scrupulous ones. Not all offshore accounts are associated with illegal activity, however, and some banks require applicants to provide extensive documentation to prove their legitimacy before they can obtain an account. Offshore accounts can also legally be used to shield corporations from the higher tax burdens in their home countries.

RELATED TERMS
  1. Repatriable

    Refers to the ability of an asset to be moved from a foreign ...
  2. International Banking Facility ...

    A facility that allows depository institutions in the United ...
  3. Offshore

    1. Located or based outside of one's national boundaries. The ...
  4. Offshore Mutual Fund

    A mutual fund that is based in an offshore jurisdiction, which ...
  5. Tax Evasion

    An illegal practice where a person, organization or corporation ...
  6. Tax Haven

    A country that offers foreign individuals and businesses little ...
Related Articles
  1. Investing Basics

    Introduction To American Depositary ...

  2. Mutual Funds & ETFs

    Protect Your Foreign Investments From ...

  3. Personal Finance

    Pros And Cons Of Offshore Investing

  4. Savings

    How To Open And Access An Offshore Bank ...

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center