Can someone explain Offshore bank accounts to me?
In: Economics
I’m not sure I understand the question? “off shore bank account” really just means a bank registered in another country.
Are you asking why are they used? Or what the benefit of them is?
To that let’s come from the perspective of an American. nations have laws, this should surprise no one. And part of the rules of doing business in a country is you have to follow those country’s rules.
Want to have a bank in America? Follow American banking laws. And that includes a whole long list of rules like “report certain transaction”, “tell the IRS how much interest your customers are making”, “respond to a warrant and give us the information we ask for”
But if the bank you use is based in, say, the Cayman Islands well the Cayman Islands is a whole ass other country. And that Cayman Islands bank can go “that’s nice America, you got some great rules there. Truly. But we’re way over here, not over *there* and your rules don’t apply to you because we don’t have banks in America. So we aren’t actually obligated to follow any of your laws because you’re over *there* and we’re over *here* so we’re just…not going to”.
Which means they can’t actually be compelled to obey any request by any American law enforcement or tax entity to do a *damn* thing.
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