Definition ∞ An offshore affiliate is a subsidiary or related entity of a company that is established and operates in a foreign jurisdiction, often for strategic financial or regulatory reasons. These affiliates typically benefit from the legal and tax environment of their host country. They conduct business operations that are linked to the parent company. Such structures are common in international finance.
Context ∞ Offshore affiliates frequently appear in crypto news when reporting on the global operations and regulatory compliance of digital asset exchanges and service providers. Concerns often arise regarding the transparency of these entities and their adherence to anti-money laundering and know-your-customer regulations. The debate involves the extent to which these structures are used for legitimate business expansion versus regulatory arbitrage. Increased international regulatory cooperation aims to address potential loopholes associated with offshore affiliations.
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