Offshore banking refers to the practice of working with an offshore bank. An offshore bank works just like a normal bank, but it is located outside country where the depositor lives. The location of an offshore bank might give you a potential tax benefit.

Offshore banks normal use less money to run their business since they do not have fancy branch offices and other attachments. These savings are often translated into financial benefits for the depositor. The financial benefits can e.g. be in the form higher interest on offshore bank accounts.

Because of it's location, an offshore bank does not need to follow the same rules as normal banks. Offshore banks can therefore provide you with increased privacy. The offshore bank might also be able to provide you with legal advantages.

Both companies and individuals can work with an offshore bank. Many large companies use offshore banking as a way of increasing profits. Individuals will often use offshore banking for the added privacy and the financial benefit.

There are many advantages to offshore banking, but these are also some risks involved with offshore banking.