Offshore banking institutions have become very popular in recent years. Many major international banks have set up operations in certain attractive offshore locations, while many small companies and institutions have used this type of offshore structure to act as highly efficient cash management centers for their operations.

The underlying principle remains the same for all types of offshore banking operation, regardless of their origin or parent. Such banks pay interest that is free of withholding tax, and free of any local tax obligations whatsoever. Such offshore banking operations can provide a wide range of very attractively packaged services to international clients, they can also engage in international financing operations free of any exchange controls.