Glossary
Offshore terms, in plain English.
31 terms across structures, tax, banking, licensing, mobility and wealth — defined the way we'd define them for a client on a call.
Structures
- SPV (Special Purpose Vehicle)
- A legal entity created for a defined, narrow purpose — typically to hold a single asset, isolate risk, or ring-fence liabilities from a parent group.
- Holding company
- A company whose sole activity is to own shares in other companies. Usually placed in a treaty jurisdiction to reduce withholding tax on dividends.
- BVI Business Company
- The standard corporate vehicle in the British Virgin Islands. Fast to form, no local tax, widely accepted by banks and counterparties familiar with the jurisdiction.
- Cayman exempted company
- The Cayman equivalent of a BVI BC. Exempt from Cayman tax for 20+ years, standard vehicle for funds and joint ventures.
- SOPARFI
- A Luxembourg holding company that qualifies for the EU parent-subsidiary directive — the default holding vehicle for European investments.
- Foundation
- A civil-law entity with no shareholders, used for succession and asset protection. Common in Liechtenstein, Panama, Jersey and the UAE.
- Trust
- A common-law arrangement where a trustee holds assets for the benefit of named beneficiaries under the terms of a trust deed.
Tax & reporting
- CRS (Common Reporting Standard)
- OECD-driven automatic exchange of financial account information between participating tax authorities. Effective in 120+ jurisdictions.
- FATCA
- US legislation requiring foreign financial institutions to report on accounts held by US persons.
- DAC8
- EU directive extending automatic exchange to crypto-asset service providers and e-money. In force from January 2026.
- Beneficial owner (UBO)
- The natural person who ultimately owns or controls an entity — the individual behind any corporate chain, foundation, or trust.
- Economic substance
- The requirement that an entity carry on real activity — people, premises, decisions — in the jurisdiction where it is resident, not just be registered there.
- Tax residency
- The country entitled to tax an individual on worldwide income. Determined by presence, home, and centre of vital interests — not by nationality alone.
- Permanent establishment (PE)
- A fixed place of business that creates a taxable presence in another country. A silent trap in cross-border structuring.
Banking
- Correspondent bank
- A bank that holds accounts for other banks and processes payments on their behalf, typically in USD or EUR.
- Nostro / Vostro
- Terminology used by banks to describe accounts held with each other. Nostro = 'ours with them'. Vostro = 'theirs with us'.
- Onboarding
- The end-to-end process of opening a bank account: KYC, source of funds, board resolutions, expected activity, and internal committee sign-off.
- Source of funds / wealth
- The origin of the money being deposited (funds) and how the client accumulated wealth overall (wealth). Two different questions, both required.
- Correspondent de-risking
- The practice of terminating correspondent relationships to reduce compliance burden — the reason so many banks stopped touching certain jurisdictions.
Licensing
- EMI (Electronic Money Institution)
- A licence to issue e-money and provide payment accounts. Regulated at national level within the EU/EEA and UK.
- PSP (Payment Service Provider)
- A licence to initiate and process payments without issuing e-money. Lighter than EMI but with a narrower scope.
- VASP (Virtual Asset Service Provider)
- Any business dealing in virtual assets on behalf of clients — exchanges, custodians, and issuers. Registration or licensing required in most reputable jurisdictions.
- MSB (Money Services Business)
- US and Canadian regime covering money transmitters, currency exchangers, and cheque cashers.
- MGA (Malta Gaming Authority)
- The EU-facing gold standard for online gambling licensing.
Mobility
- CBI (Citizenship by Investment)
- A programme granting citizenship in exchange for a qualifying investment or donation. Operated by 14 countries as of 2026.
- Golden visa
- Informal term for residency-by-investment programmes granting residence rights, typically in exchange for a real-estate or fund investment.
- Non-dom
- A tax regime that taxes residents only on income remitted to the jurisdiction. Historically the UK's — restricted from April 2025.
- 180-day rule
- Common heuristic: spending 183+ days in a country typically makes you resident for tax purposes. Real rules vary; the heuristic is not a defence.
Wealth
- PPLI (Private Placement Life Insurance)
- An institutional-grade insurance wrapper allowing tax-efficient holding of investment portfolios for HNW policyholders.
- Reserved-power trust
- A trust structure that lets the settlor retain defined powers (investment, distribution) without invalidating the trust.
- Family office
- A private organisation managing the financial and lifestyle affairs of a single family (SFO) or several families (MFO).
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