What is Offshore Account?

An offshore account is a bank account or related service that is located outside of the account holder's home country, often to secure favorable regulations as they relate to tax avoidance and asset protection. Offshore banking locations are usually island nations that are used by entities or high-net-worth individuals (HNWIs) to set up companies, investments, and other business types with the goal of saving money on operating costs by paying lower tax rates. Offshore banking and financial service providers, though theoretically legal, can often be used for illicit purposes like money laundering, criminal activity, and tax evasion.