As countries in Asia develop, there are more reasons and opportunities for both investors and offshore companies to pour their millions into offshore banks and even more reason for off shore banking to flourish in Asia.

An offshore bank is any bank that is not in the depositor's residence. These bank accounts are usually tied in with offshore companies, IBC's (International Business Corporations or companies incorporated off the shore of the owner or stockholder's country of residence.

Besides using the offshore bank to conduct international trade, the off shore corporations also take advantage of incorporating in a country with a lower or no tax structure. There is also a great deal more privacy using an offshore bank since they, unlike banks in America, are not required to report interest to any government.

In addition, since growth is much more explosive in developing countries, offshore banks sometimes offer better interest or return on investment than banks in developed countries. That is why offshore banking has become even more attractive to investors and why there are a growing number of Asian countries looking to attract offshore investors by liberalizing their countries incorporation and banking rules. Some of the more prominent offshore banking centers are:

Hong Kong

One of the largest and oldest off shore banking centers in Asia is in Hong Kong. With one of the most stable and secure places for savings, Hong Kong also offers an attractive taxation for Hong Kong Companies. Many who incorporate in China use a Hong Kong based parent company as a tax advantage. Hong Kong is one the most popular countries for setting up an offshore company because of the ease of company setup and absence of foreign exchange controls.

Singapore

With one of the lowest taxation rates in Asia, Singapore is possibly the most attractive in Asia and was one of the few off shore centers to avoid the European Union's 2005 taxation directive. After this directive, Singapore's offshore banking community rapidly increased as financial institutions expanded to service the growing demand. Great return on investment is another reason touted as a reason for banking in Singapore.

China

China has been enjoying an increase in foreign investment as companies flock to establish a presence in China. Besides the savings in manufacturing costs in doing business in China, there is the added benefit of company structures that are beneficial for reducing taxes.

Taiwan

Taiwan recently announced liberalization measures to allow offshore banking and overseas branches of domestic banks in Taiwan to engage in Renminbi (RMB) related business, which will include account and deposit services, loans and advances, trade finance, remittances, and currency exchange services. The scope of RMB services will be expanded in the future, as policies allow.

BEA deputy chief executive Brian Li said these services further enhance their RMB capabilities in Greater China, which already include well-established RMB platforms in Hong Kong and Mainland China, and enable their customers to enjoy greater flexibility and reduced exchange rate risk when conducting cross-strait business transactions

Doing business in Asia almost certainly requires the use of offshore banking. Luckily the advantages of offshore banking in Asia is becoming more and more attractive everyday.

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