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Sujai Adithya
Business Development and Banking & Financial Services Expert
Asked a question last year

Difference between offshore and onshore banking?

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Sujai Adithya
Business Development and Banking & Financial Services Expert


  • An offshore banking is one which is located in a different jurisdiction from its investors or depositors reside.
  • Onshore Banking is the banking activities which are undertaken within the jurisdiction and territories of a nation or a sovereign state.

Privacy and Secrecy 

  • In offshore banking, authorities, regulators and even governments cannot access information except few exceptions.
  • In onshore banking, there is a standard privacy and security policy.


  • In offshore banking, the stability remains neutral in any situation like wars, economic up-down, rules and regulations and political changes. All this are not going to affect the account.
  • In onshore banking, all type of adverse conditions affects the account.

Initial Deposits

  • In offshore banking, the initial deposit is in large amount.
  • In onshore banking, the initial amount is much lesser than the offshore banking account.


  • Offshore banking is highly flexible because it serves the specific services as per their need. It has a high level of personalization.
  • Onshore banking is not flexible but it provides services up to a certain extent of personalization.

Reputation of Client

  • Offshore banking has a high level of goodwill because of high net worth customers who deal in international trade.
  • Onshore banking has a normal level of reputation in the market because the customers are from the national boundary.

Eligibility of Customer

  • Only non-resident individual can open an account in the offshore banking.
  • In onshore banking, the standard eligibility requirement is followed.

Tax benefits

  • An offshore bank account has no tax or a negligible tax.
  • An onshore bank account has standard tax rules.

Rules and Regulation

  • Offshore banking has minimum rules and regulation.
  • Onshore banking has to follow standard rules and regulations of many authorities like tax department, central bank and government.

Offshore banks are banks that are located outside a customer’s resident country. So, if you are resident in one country but have a bank account in another country, this account is technically an “offshore” account.

For instance, in Singapore, now also well-known as an offshore banking jurisdiction, Offshore Banks are licensed as such by the Monetary Authority of Singapore under the Banking Act.

Offshore banks offer banking services to customers outside the customers’ domicile or country of residence. Offshore banks offer a wide range of benefits over and above what is available through standard banking channels. This has made them popular both amongst high networth individuals and businesses that operate internationally.