Many economists argued that offshore banking sector represented the new beginning of the international capitalism. They traced the evolution of the offshore banking sector to the development of transnational corporations. In this context the evolution of the international banking came as a response to the modern phenomenon of capital which obviously goes beyond national borders. At the same time the rapid growth and boom of the technology sector gave a great incentive and facilitated the creation of the international offshore banking area. This permitted global access of world market information and subsequently its management and control.
Under the traditional national and international sectors there were several constraints which gave the possibility for 
offshore activity to grow. These are: the extension of national tax bases; intermittent fiscal and monetary instabilities; the existence of foreign exchange controls and fluctuations; limiting cross-border controls; conservative banking laws and regulations with regard to foreign and domestic industrial entry, systems of supervision and liquidity requirements, constraints on the issue of foreign and domestic bonds, the admission of securities to capital markets, stock exchange, insurance regulations ; company laws which restricted business.
Also it has to be mentioned from the international perspective there was a lack of coherent set of international fiscal principles and laws in which transnational company could operate across border.
The evolution of the offshore banking center is described from the perspective of its tax and banking functions. More recently, however, other constraints onshore have served as an incentive element which pushed for offshore investment and have emphasized the importance of that investment. These include: the need to provide for what is seen as the vulnerability of professionals and investors to creditors; the desire to avoid onshore laws and regulations which mandate the reservation of assets to spouses and heirs; the need for savings and investment vehicle for ordinary persons.
Offshore banking center came with innovative solutions to all these constraints that were mentioned above. Let us refer for example to taxation. There are 3 models of offshore banking centers from the perspective of taxation: with zero-tax (here even residents do not pay taxes); with low-tax; tax at normal rates but exemption or other preferential treatment is granted to non-resident investors or investment for certain categories of income.
Notwithstanding the fact that the above categories refers only to tax aspects of offshore banking activity, it clearly shows the scope of such centers.
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