A bank that is located outside the country of residence of its depositors is known as an offshore bank. Typically, most offshore account holders are non-residents of the bank's jurisdiction. The popularity of offshore banking is due to the various advantages it offers in comparison with national banking, such as greater privacy, easy access, little or no taxation and protection from political, local or financial instability. While the term originated in the Channel Islands, offshore from the United Kingdom, and while historically most offshore jurisdictions are located on islands, it is now used to refer to all banks offering the above-mentioned advantages, regardless of their location. For example, banks located in Switzerland, Luxembourg and Latvia are often referred to as offshore banks.

Benefits of having an offshore bank account
The main advantages of having an offshore account, and the reasons for offshore banking's growing popularity, are:

Convenience and flexibility — the process of opening an offshore bank account is significantly faster and more convenient than when dealing with national banks. Many companies now specialise in offering a full-service package for those looking to open a bank account in a specific offshore jurisdiction.
Multiple currencies — having several accounts for different currencies allows you to diversify risk associated with your home currency and profit from exchange rate fluctuations.
Little or no taxation — some offshore banks are located in jurisdictions called tax havens, where taxes on inheritance or income are levied at a lower rate or not at all.
Greater secrecy — an alternative term for a tax haven is secrecy jurisdiction, because most offshore banks offer higher levels of secrecy than are available in other countries. This is possible thanks to legal provisions in these jurisdictions prohibiting the disclosure of a client’s personal and account information to the authorities, except in the event of a criminal complaint.
Disadvantages of having an offshore bank account
There are some disadvantages to consider before opening an offshore bank account:

Offshore banking is often associated with tax evasion, money laundering and organised crime. Therefore, tax agencies and other authorities work hard to impose strict rules and greater regulation on international finance, particularly with regard to offshore banks.
An offshore bank, depending on whether it is a private or a retail bank, may require a relatively high minimum deposit before you can open an account. In addition, some banks require you to maintain a certain minimum balance on your account at all times.
You may not be protected if there is a financial crisis or if the offshore bank defaults, which means that you may not be able to retrieve all or any of the money you have deposited. Therefore, it is crucial to carry out extensive research or to entrust a competent professional, who is familiar with the banks you are considering and the legal requirements of your chosen offshore jurisdiction, to conduct this research for you.
Blacklists of offshore jurisdictions and their impact
National and international authorities have developed several grey- and blacklists in order to tackle uncontrolled offshore banking. These lists usually include jurisdictions that refuse to co-operate on tax or other matters requiring the provision of information on their customers. For example, the EU is drafting a common blacklist of uncooperative jurisdictions, which should be finalised by September 2017. The plan is for this list to include not only the names of offshore jurisdictions and tax havens, but also sanctions and other defensive measures against these countries. Common sanctions against blacklisted jurisdictions include:

Increased disclosure requirements for individuals and companies using tax havens
Withholding taxes on transactions with tax havens
Prohibition on using interest accrued in blacklisted countries to offset tax
Revision of tax treaties
Political pressure on global corporations to refrain from investing in tax havens
Reductions in international aid
Interestingly, those who defend offshore banking tend to criticise any attempt to regulate and impose sanctions on offshore jurisdictions. They consider the process to be driven, not by security or financial concerns, but by the desire of domestic tax agencies and banks to access the funds held in offshore accounts.