The development of the concept of offshore banking center is one of the most important legal, social and economic phenomena. This has occurred thanks to a lot of modern factors such as development in technology and communication, the spectacular growth in transnational companies and of course the development of transnational banking. Actually, nowadays the offshore banking activity is seen as the most dynamic sectors of financial activity.
However, the well known concept “offshore banking” brings some negative connotation as well and an image of unethical, illegal or even criminal activity. This is a very narrow view in relation to what offshore banking activity represents in its entirety because it transcends such illegal activities as tax evasion or money laundering. In contrast, many offshore banking centers ensure compliance with international norms and practices. The creation of offshore banking
sector is the result of the laws and represents a legitimate phenomenon in itself.
The demand for offshore banking services is determined by several factors. Offshore banking centers aim to supply the demand of increase revenue. They take advantage of what in modern times it is called financial sector which goes beyond criminality, illegality and financial abuse or fraud. Today offshore banking centers aim at facilitating taxation for investors, use of modern and sophisticated banking, dynamic investment and mutual funds. Moreover, offshore banking centers view the principle of confidentiality in banking issues as an essential and crucial element which deserves to be protected and guaranteed. At the same time let us not forget that in many parts of the world the offshore banking sector is the main contributor to economic development and growth in the jurisdiction were it exists.
The offshore banking sector developed step by step. The basic structure of tax havens elevated to such sophisticated entity as offshore financial center with multiple financial services, including offshore banking. The movement of banking institutions offshore resulted in a huge scale offshore bank deposits. This resulted in the creation of a big network of onshore external financial centers and onshore-related offshore finance centers. The development of such a big network was primarily possible due to rapid development of telecommunications and air travel.
Thus, the offshore banking sector is rightly seen as one of the most dynamic sector. This sector is using heavily in its activity the rapid development of modern technologies and at the same advances it.