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. Shell Corporation

    A corporation without active business operations or significant ...
  3. International Banking Facility ...

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

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

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

    An illegal practice where a person, organization or corporation ...
Related Articles
  1. Introduction To American Depositary ...
    Investing Basics

    Introduction To American Depositary ...

  2. Protect Your Foreign Investments From ...
    Mutual Funds & ETFs

    Protect Your Foreign Investments From ...

  3. Pros And Cons Of Offshore Investing
    Personal Finance

    Pros And Cons Of Offshore Investing

  4. How To Open And Access An Offshore Bank ...
    Savings

    How To Open And Access An Offshore Bank ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center