Ask for help on the meaning of offshore finance

The offshore financial market mainly provides non-residents with overseas currency loans or investments, and settlement; An international financial market for financial services such as foreign exchange trading, insurance services and trading, also known as overseas financial markets, can be simply summarized as market transactions are dominated by non-residents and are basically not subject to the laws and regulations and tax system of the country where they are located. The rise of the offshore financial market in the 60s has brought the development of the international financial market into a new stage of development.

The offshore financial market has some distinct characteristics compared to the onshore financial market:

1) The market is broad, the scale is huge, and the financial strength is abundant.

2) The lending relationship in the market is the relationship between non-resident borrowers and borrowers.

3) The market is basically not subject to the jurisdiction of the financial regulations and foreign exchange controls of the national authorities.

4) The market has a relatively independent interest rate system.

Function: The emergence and development of the offshore financial market is conducive to the inflow of a large amount of international capital, making up for the domestic capital gap, and enabling domestic market players to raise funds and financing in a more flexible way and channel; It is conducive to narrowing the time and space distance between the financial markets of various countries and facilitating the global reduction of the cost of international borrowing funds; It is conducive to the introduction of a large number of modern financial technology tools and financial products, prompting domestic peers in the host country to improve their operation and management methods, improve service quality and the quality of employees, and accelerate financial innovation; It is conducive to speeding up the financial supervision of the host country to move closer to international practice and improving the quality of supervision; It is conducive to increasing foreign exchange earnings and increasing domestic foreign exchange reserves; It is conducive to regulating the host country's balance of payments and stabilizing the international economic and financial order; It is conducive to bringing a wide range of economic benefits.

As a new type of market with a high degree of freedom, flexibility, fast and convenient, and high efficiency, the establishment of the offshore financial market must meet the following conditions: political and economic stability of the country or region where it is located; There is a well-developed domestic financial market, a sound financial system and experienced and efficient financial institutions; There are flexible and free financial laws and regulations and fiscal and taxation policies conducive to market development, foreign exchange controls are relaxed or abolished, financial management is relaxed, and preferential tax reductions and exemptions are provided; It has a relatively superior economic and natural geographical location.

1. The objects of the transaction subjects are different.

1. Onshore financial market: The onshore financial market is mainly a financial transaction between residents and non-residents.

2. Offshore financial market: The offshore financial market is mainly a financial transaction between non-residents and non-residents.

Second, the constraints are different.

1. Onshore financial market: The market is subject to the management and restriction of the laws and financial regulations of the country where the market is located, with many restrictions and high borrowing costs.

2. Offshore financial market: The financing business is basically not subject to the policies and regulations of the country where the market is located and other countries.

Third, the characteristics are different.

1. Onshore financial market: usually only operates credit business in the currency of the country where it is located.

It is essentially an export of capital.

form. Therefore, the traditional international financial market cannot be called an international financial market in the true sense.

2. Offshore financial market: The currency traded is the currency outside the country where the market is located, including the world's main freely convertible currencies.

Encyclopedia - Offshore financial markets.

Encyclopedia - Onshore financial markets.

Offshore finance refers to the financing activities carried out by financial institutions located in a country that have little connection with the financial system of that country and are not subject to the financial laws and regulations of that country.

An offshore bank, also known as an offshore unit, is a bank or other financial organization located in an offshore financial center. Its business is limited to dealing with other overseas banking units or foreign institutions, and it is not allowed to operate in the domestic market.

The offshore financial market is also known as the offshore financial market. A market that is isolated from the domestic financial market, so that non-residents can freely trade in raising and using funds without being affected by the tax and foreign exchange controls of the host country and domestic financial regulations.

The main reasons for the rapid development of offshore financial business are: offshore banks do not have to hold reserves, and their operating costs are lower than those of domestic banks; Offshore banks are not subject to interest rate caps, i.e. they can pay higher interest rates to depositors than banks to domestic depositors, and they can pay interest on demand deposits; Offshore finance enjoys preferential tax treatment.

Characteristics of offshore finance: the difference between the offshore financial market and the traditional international financial market, from the nature of the market, the traditional international financial market is essentially a domestic market, because it is regulated by the laws and regulations of the country where the market is located, and the currency of the country where the market is operated, and the interest rate system is also the interest rate of the country where it is located. The offshore financial market is a stateless and completely international market, which is not subject to the control of any country's currency laws, mainly operates foreign currencies, and implements a unique international interest rate structure.

From the perspective of lending relationship, the lending relationship in the traditional international financial market is between locals and foreigners, that is, domestic funds provide loans in their own currency to foreigners, and are characterized by the net export of domestic capital. The lending relationship in the offshore financial market is between foreigners and foreigners, that is, foreign currency deposits are provided to non-residents with non-resident deposits, and are characterized by foreign funds**.

Offshore finance refers to financial activities that use freely convertible currencies as the medium of exchange, with the participation of non-residents (overseas individuals, legal persons, ** institutions, international organizations, etc.), providing financial services such as settlement, lending, capital flow, insurance, trust, ** and derivatives trading, and are not subject to the general financial laws and regulations of the country where the market is located and the country where the currency is issued.

The offshore financial center takes the Eurodollar market as an example, it is a very typical offshore financial center, it is a free international financial market with free trading and unregulated. Offshore financial business is a wholesale banking business, with a large amount of deposits and loans, and the transaction objects are usually banks and multinational companies, and its business is usually to introduce foreign funds and then lend funds to foreign countries. Individual investors can also invest through institutions.

Offshore financial business refers to the financial activities in which banks absorb funds from non-residents (mainly including: overseas (including Hong Kong, Macao and Taiwan) individuals, legal persons (including Chinese-funded enterprises registered overseas), ** institutions, and international organizations) to serve non-residents.

Offshore finance refers to the financing activities carried out by financial institutions located in a country but have little connection with the country's financial system and are not subject to the country's financial laws and regulations. For example, if a trust and investment company is headquartered in the Bahamas, but its business activities are to absorb U.S. dollar funds from European residents or other non-U.S. residents, and then invest those funds in European or non-U.S. residents, the company is engaged in offshore financial activities. Strictly speaking, offshore finance is the financing of funds that are not subject to the domestic banking laws of the authorities, regardless of whether these activities take place onshore or offshore.

For example, the international banking facility (IBF) in the United States and the business activities of the offshore financial market in Tokyo are all offshore finance.

The onshore international financial market refers to the place where residents and non-residents conduct financing and related financial business, and the typical onshore market is the foreign bond market and the international ** market.

The offshore financial market is a type of financial derivative market. The offshore financial market, also known as the "offshore financial center", is a market for non-residents to engage in international financial business. The offshore market is traded by non-residents, and the funds must be ** foreign currency funds of non-residents and other international ** in the country where the bank is located.

The offshore financial market is an intangible market, in a broad sense, it only exists in a certain city or region and does not exist in a fixed trading place, it exists through the business exchanges between the local financial institutions and the international financial market. In the past 20 years, New York, London, Luxembourg, Switzerland, Liechtenstein, Morocco, Quinsea, Singapore, Hong Kong, Tokyo, the Philippines, Bermuda, the Bahamas, Bahrain, Panama, Cayman Islands, etc. have become famous offshore financial markets.

Rong Mom will answer for you.

Answer]: B answers: B. Analysis:

The offshore financial market, also known as the foreign market, is an international financial market that provides non-residents with financial services such as overseas currency lending, investment, and settlement. The characteristics of the transaction can be summarized as follows: the transaction is dominated by non-residents, the market is independent, not restricted by the policies and laws of any country, and the transaction is a foreign currency (currency other than the country where the market is issued).