Offshore banking is a subject in business that can be considered a touchy subject because of the negative feeling people get when they hear the term. Most people think of illegal acts, tax evasion, and money laundering but when looked at closely there are several advantages to offshore banking. Wikipedia defines an offshore bank as bank located outside of the country or residence of the depositor with a lower tax haven and that provides financial and legal advantages. The advantages of offshore banking include more privacy, little of no taxation, easy access to deposits, and protection against local political and financial instability. People think that offshore banking is illegal because the do not fully understand what offshore banking is and that what really makes it illegal is the decisions the depositor makes. One of the big misconception of offshore banking is that people us it to evade taxes but this only happens if the depositor chooses not to report any gains that have been made such as interest on their taxes. Yes then in this sense it would be illegal and you not be used properly. One of the biggest advantages would be that most offshore banks offer higher interest rates than the banks in the depositor’s home country and the offshore bank is able to do this because several of the offshore banks operate with a lower cost base. I feel this is very appealing to investor who can partake in offshore banking because it allows you to get a higher return on the money that you are depositing which will generate more money than a bank in the home country. I think the most appealing aspect of offshore banking is the tax haven that offshore banking provides to the depositor because the interest paid by offshore banks is paid without taxes being deducted. As stated earlier it is the depositor’s job to report the interest on their taxes if their country requires it. These advantages can be helpful to investors and the argument on whether offshore banking is legal or illegal is going to be one of opinions. This question can only be answered by the person investing and how they decided to use or abuse these advantages provided by offshore banking. REFERENCE http://en.wikipedia.org/wiki/Offshore_banking?FIN370 Powerpoint slides