The term “offshore accounts” has come to be synonymous with hiding money from U.S. authorities, including the IRS, but most of the banking and business conducted abroad is legitimate.

However, a lot of regulations and restrictions exist for Americans who want to conduct banking and business in foreign countries, says Live and Invest Overseas, an online resource for investing, traveling and living abroad. So, in addition to knowing U.S.-imposed regulations for doing business overseas, it is essential to know the restrictions that apply in each foreign country.   

Some countries are friendlier to foreigners when it comes to transacting business and establishing finances than others. Live and Invest Overseas looked at the countries with the least regulations, taxes, and residency requirements, the ease of doing business and the best asset protection for opening a bank account and establishing a business.

Following are the top five options for diversifying offshore and a few reasons Live and Invest Overseas likes them.

No. 5. Cayman Islands

The Cayman Islands are a granddaddy among offshore jurisdictions. This archipelago is home to well-established financial and offshore entity industries and has more than 200 banks, including branches of major international banks, creating many private and investment banking options.

This is one of the best and most diversified choices for investing in offshore financial investments, such as international stocks, bonds, and mutual funds. The trouble is that SEC prohibits most Cayman banks and brokerage houses from dealing with U.S. citizens. An American wanting to take advantage of the investment opportunities on offer in this jurisdiction must set up an entity to hold them. You could go with a Cayman structure to make banking easier, or one from the island of Nevis.