Offshore banking is keeping money in a country or area where the owner of the money is not a resident. The term started in the UK to describe the practice of some UK individuals or companies opening accounts mainly on islands just offshore, ie close to but not part of, the British mainland. Islands like Jersey or the Isle of Man, for example, sometimes have different regulations that favour big investors, such as low taxation or less investigation of your account.

Nowadays the term is used to describe banking anywhere considered a tax haven (place where you pay less tax) so it is also applied to countries like Switzerland which is a major centre for international finance and has low taxation.

There have been problems with offshore banking due to some criminal organisations using these accounts to carry our or disguise illegal operations, and also due to some companies using them to avoid paying their share of tax. However, their use is very widespread and most of the big banks offer offshore investment.