A foreign bank is a banking institution that is organized under the laws of a foreign country and operates in a country other than where its headquarters are located
. Specifically, it refers to banks where 50% or more of the shares are owned by foreign investors
. In the context of the United States, a foreign bank generally means any banking operation of a banking organization headquartered outside the U.S. These banks may operate through branches, agencies, subsidiaries, or representative offices and are subject to regulations both from their home country and the host country
. Foreign banks often provide services to multinational clients and businesses, and they play a significant role in the financial system, such as making loans to American businesses
. Foreign bank branches differ from subsidiaries in that branches are part of the parent bank and must comply with both home and host country regulations, while subsidiaries are independently operated and adhere only to the host country's laws
. Foreign banks contribute to global financial connectivity by offering services internationally, often benefiting from regulatory and tax environments in different countries
. In summary, a foreign bank is a bank that operates outside its home country, owned or controlled by foreign interests, and subject to regulatory frameworks of both its home and host countries
