Any bank account opened outside of one's native country can be considered an offshore bank account. Offshore bank account can be used for savings, or as the main means of banking. It may be opened by any individual or business in most countries, to have major benefits in terms of asset protection and tax relief.
Service and benefits offered by local banks and offshore banks are quite similar: offshore banking may be used as savings account, or as the main means of banking, making investments, purchasing insurance and loans. The current account also comes along with a debit card. Difference lies very much in the taxation area. Some offshore banks require a substantial initial deposit or other restrictions but the benefits of a lower tax obligation or higher interest rate usually overweigh this.
Now, many people consider opening offshore bank account for absolutely legitimate financial reasons, - for example to move finances in a jurisdiction more stable economically or politically. Exchange rate between foreign currencies is often more favorable with "local" accounts, most accounts are protected by international banking insurers.
Regular onshore banking is subject to the tax rules, foreign exchange rules and charges of the country the account is located in. These rules are also subject to foreign exchange regulations, and are not covered by the offshore banking confidentiality and asset protection legislation. On the other hand, offshore banking is tax free, all account information is confidential and there are no foreign exchange regulations.
Since offshore international banking is a good business, some companies create their own offshore banks. In some offshore jurisdictions, to receive a bank license it is required to have equities in the amount of just $100,000 or less. The company having its own offshore bank may use bank services for its own operations, such as loans, mortgages and debentures.
