Term used for investing in a country outside the one you are living in, as well as referring to a company or financial institution with a headquarters outside of the country. A mutual fund with a legal domicile in the Bahamas or the Cayman Islands is called an offshore fund. To be sold in Canada, funds must adhere to strict federal regulations. Many banks have offshore subsidiaries that are under the standards and regulations of the particular country, which can vary considerably. Companies may establish headquarters offshore because of lower tax rates.
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