An offshore company is a business entity that is registered in a country different from where its owners reside. These companies are often established in jurisdictions with favorable tax laws, allowing for reduced tax liabilities and increased privacy. Common locations for offshore companies include places like the Cayman Islands and British Virgin Islands. Many individuals and businesses choose to set up offshore companies for various reasons, including asset protection, tax optimization, and regulatory advantages. However, it's important to comply with the laws of both the offshore jurisdiction and the owner's home country to avoid legal issues.