Since English is translated as offshore off the coast. And apply this term to certain banking transactions. Just offshore companies can be a region with gentle tax regime, where various financial transactions. The first offshore company began in the late 50s in the U.S.. The leaders of this company moved its operations to another country with lower taxes.
Thus, they saved hundreds of thousands of dollars, paying taxes, another small state. High taxes in many countries make the business look for ways to legally avoid high taxes. And if there is demand, then come and offer. So there was a lot of economic areas with low taxes. Offshore practice, or entire states, or offshore areas may be located in economically developed state, as some U.S. states. But the reduction in tax payments is not the only plus registration of a company in the offshore zone. There are a lot of information covered offshore areas that can provide information secrecy and anonymity.
But there are many restrictions for companies located in the offshore. It is impossible to do business in the offshore of the state can not be used in the name of the organization such words as: Banking, Insurance, Royal and others. And that would be to conduct banking, medical, educational activities required to get special licenses. There are also areas where there is a tax, but legislation is that certain types of income are exempt or taxed at low rates. For example, after the state of Cyprus to the EU authorities suspended the practice offshore. But for certain types of income taxes were reduced. But this is not the only example, as between France and Luxembourg there is a "legal conflict", which is exempt from tax on rental property in France, if a company is registered in Luxembourg.