What Is An Offshore Merchant Account?

An offshore merchant account is a web trading account established in a country in which the holder is not resident.

Distilled down, an offshore merchant account is a merchant account that has been underwritten by a non-resident country bank. By issuing the account holder with a Merchant ID Number (MID), the bank is agreeing to assume the risk for, or underwrite, the charge backs incurred in the merchant's credit card transactions. (Charge backs are the costs involved when a credit cardholder decides to cancels the transaction.)

So long as your business is legal and legitimate, there need be no obstacles in the way of operating it as a potential tax-free offshore concern via an offshore merchant account. There are today plenty of countries with reputable major banks keen to facilitate offshore merchant accounts which are, after all, just another form of the offshore banking carried out for the super wealthy for many decades now.

The jurisdictions most commonly used are those of the Caribbean countries, Costa Rica, Central and South America, Switzerland, Latvia and other Baltic states where the banking environment is regarded as safe and secure.