What is Legal Terms - Offshore Bank Account?

Offshore Bank Account Information: This is an account that is housed in a financial institution located outside the jurisdiction of the US Banking System and its regulations. Investment products that are sold in the US by the offshore bank are subject to US securities law. The most popular location for these banks is Bermuda and The Cayman Islands. The purpose of using offshore accounts rather than domestic accounts located inside the US is tax avoidance or at least tax minimization. Income on offshore accounts will be taxed at the prevailing local rate, which is usually lower than the tax rate that would be applicable on a domestic US account. Many US banks own offshore financial institutions and operate them as subsidiaries.