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A bank located outside the country of residence of its depositors is known as an offshore bank. Typically, most offshore account holders are not resident in the bank's jurisdiction. The popularity of offshore banking is due to the various advantages it offers compared to national banking such as: B. More privacy, easy access, little or no taxation and protection from political, local or financial instability. Whilst the term originally came from the Channel Islands off the coast of the United Kingdom and most offshore jurisdictions are historically located on islands, today it is used to refer to any bank offering the above benefits regardless of their location . For example, banks in Switzerland, Luxembourg and Latvia are often referred to as offshore banks.

Advantages of an offshore bank account
The main advantages of having an offshore account and the reasons behind the growing popularity of offshore banking are:

Convenience and Flexibility – The process of opening an offshore bank account is much faster and more convenient than national banks. Many companies are now specializing in offering a full service package for those wishing to open a bank account in a specific offshore jurisdiction.
Multiple Currencies – Having multiple accounts for different currencies allows you to diversify the risk associated with your home currency and benefit from exchange rate fluctuations.
Little or no taxation – some offshore banks are located in what are known as tax haven jurisdictions, where inheritance or income taxes are levied at a lower rate or not at all.
Greater secrecy – an alternative term for a tax haven is the secrecy jurisdiction, as most offshore banks offer a higher level of secrecy than other jurisdictions. This is possible thanks to legal provisions in these jurisdictions, which prohibit the disclosure of a customer's personal and account information to the authorities, except in the event of a criminal complaint.
Disadvantages of an offshore bank account
Before opening an offshore bank account, there are a few disadvantages to consider:

Offshore banking is often associated with tax evasion, money laundering and organized crime. Therefore, tax authorities and other authorities are working hard to enforce strict rules and more regulation of international finance, especially with regard to offshore banks.
An offshore bank, depending on whether it's private or retail, may require a relatively high minimum deposit before you can open an account. In addition, some banks require you to have a certain minimum balance in your account at all times.
You may not be protected if there is a financial crisis or if the offshore bank defaults, meaning you may not be able to recover all or part of the money you have deposited. It is therefore crucial to conduct extensive research, or have a competent professional familiar with the banks you are considering and the legal requirements of your chosen offshore jurisdiction, to conduct this research for you.
Offshore Jurisdiction Blacklists and their Impact
National and international authorities have developed several gray and black lists to tackle uncontrolled offshore banking. These lists typically include jurisdictions that refuse to cooperate on tax or other matters that require the provision of information about their customers. For example, the EU is drafting a joint blacklist of uncooperative jurisdictions, which should be completed by September 2017. This list should include not only the names of offshore jurisdictions and tax havens, but also sanctions and other defenses against those countries. Common sanctions against blacklisted jurisdictions include:

Increased disclosure requirements for individuals and companies using tax havens
Withholding taxes on transactions with tax havens
Ban on using interest accrued in blacklisted countries to offset taxes
Revision of tax treaties
Political pressure on global corporations to refrain from investing in tax havens
cuts in international aid
Interestingly, those who defend offshore banking tend to criticize any attempt to regulate and impose sanctions on offshore jurisdictions.