Offshore Banking is normally defined as opening and using a bank account in a bank located in another country. In the majority of cases this is a country that has relaxed tax laws. Offshore banking is a term used to describe banking activity in currencies other than the currency of the country in which the bank accounts are held. Countries / territories conducting such business are called offshore financial centres. Offshore banking is part of the inquiry, he said, although he declined to say whether subpoenas had been served in the investigation of Mr. Scrushy’s personal dealings.

Offshore banking is also a big business worldwide. Recent estimates calculate that as much as US$5 trillion is stashed in nearly 40 offshore banking havens that impose no taxes. Offshore banking is most often associated with bank transactions in tax havens like Luxembourg and Switzerland, which are more often than not chosen by people who wish to have investment accounts. The objective is to avoid taxation on interest income and gains on shares which are highly taxed in Europe. Offshore banking is central to the Channel Islands financial services industry. Channel Island banks are now used by clients in more than 200 countries worldwide with a sizeable proportion of deposits held in foreign currencies, a reflection of the international appeal of the Island and the complexity of the banking industry.

Offshore banking is somewhat different to offshore investing. Investing has to do with saving your money in a particular investment product with the purpose of growth and eventually good returns. Offshore banking is secure, stable and reliable. Additionally, an offshore corporate bank account in jurisdictions such as Singapore and Hong Kong have an excellent image. Offshore banking is a very controversial topic.