Nolo's Plain-English Law Dictionary

Offshore Corporation

A corporation chartered under the laws of a country other than the U.S. that does not conduct substantial business in its country of incorporation. Some countries (particularly in the Caribbean) are popular nations of incorporation since they have little corporate regulation or taxes and only moderate management fees. Reasons to use an offshore corporation may include avoidance of taxes, ease of international operations, freedom from state regulation, and placement of funds in accounts out of the country.