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Best Jurisdictions To Apply For An Offshore Banking License


Offshore Banking License in Puerto Rico

In 1989 Puerto Rico (PR) adopted the International Banking Center Regulatory Act Number 52 (Act 52) to promote international banking to compete with the offshore banking centers in the Caribbean. Act 52 granted tax exemptions to international banks and give a broad range of powers in leasing, insurance, securities and international banking. In 2012 Act 273 replaced the Act 52 with the objective of improving the conditions for conducting international banking in PR. Act 273 authorizes International Financial Entities to engage in traditional banking and financial transactions with non-residents of PR.The PR Office of the Commissioner of Financial Institutions (OCFI) is the entity responsible to license International Financial Entities (IFE) to conduct specified financial transactions. Once licensed the IFE can request a Tax Grant from the PR Department of Economic Development of Commerce to receive the following benefits for 15 years:

  1. A fixed 4% PR income tax rate in the net income, increased up 10% at renewal.
  2. Full property and municipal license tax exemptions.
  3. 6% income tax rate on distributions to PR resident shareholders.
  4. 0% tax rate on distributions to non-PR resident shareholders.

The IFE licensing requirements

The 273 Act determine a series of requirements for the granting of an international banking license:

  1. Articles of Incorporation and by-laws.
  2. Rent an office space.
  3. Hire at least 4 employees.
  4. Authorized capital at least $5,000,000.
  5. $300,000 financial guarantees acceptable to OCFI.
  6. Application to the OCFI for a permit to organize an IFE.
  7. $5,000 non-refundable fee and same annual fee if approved.
  8. Personal statements for 10% or more shareholders.
  9. Comply with US Bank Secrecy Act, US Patriot Act and Office of Foreign Asset Control (OFAC).
  10. After these requirements are completed, the Tax Grant will be authorized for 3 consecutive 15-year period for a total of 45 years.
Eligible Activities under IFE license. Click for more Info

 

Offshore Banking License Cayman Islands

The Cayman Islands are the most prestigious jurisdiction to get a full offshore banking license. This is the very reason why so many people and businesses choose offshore banking exactly in the Cayman Islands. As statistics have it, there are more than 70,000 companies registered there of which 350 are banks. This is a pretty big figure for a not so large piece of land.

Cayman Islands: Offshore Banking License B Application

Establish an offshore bank in the Cayman Islands

    • Most prestigious offshore jurisdiction
    • Capital: $1.2M

Offshore Banking License in the EU

The solution to the challenge was found in Lithuania new specialized banking license. Lithuania have a favorable regulatory and tax environment, good infrastructure, affordable office space and labor force. Fintech companies find it as an ideal jurisdiction to challenge traditional banking institutions and getting access to the EU banking market with the ability to open offices in many cities with the EU if desired.

Funding for Real Estate Projects

EU citizenship

The first hurdle for non-Europeans is how to invest in the EU because it is required the stockholders or applicants be Europeans. For this requirement it is key before the presentation of the application to have an associate in another EU country. The foreign applicants will also need to apply for a Foreign ID number to register with the EU their investments intentions. There is also the option of start-up visas from the Lithuanian government for innovative businessmen/women.

Bank Application Lithuania

The application takes over 6 months up to 1 year and requires at least two visits to Lithuania to meet the banking authorities and includes a business plan according to the services permitted under the specialized banking license applied for:

  • Taking deposits and other repayable funds
  • Lending (including credit agreements relating to immovable property)
  • Financial leasing
  • Payment services
  • Issuing and administering travelers’ checks, bankers’ drafts and other means of payment insofar as such activity is not covered by payment services (item (4) above)
  • Issuing guarantees and commitments
  • Financial intermediation (agency)
  • Administration of funds
  • Creditworthiness assessment services
  • Safe-deposit box rental
  • Currency exchange (in cash)
  • E-money issuance

 The specialized license does not allow to provide:

  • Investment or pension fund management
  • Securities brokerage
  • Investment advice and other similar services

But you can apply for separate licenses for those services. After 90 days of the approval the specialized bank is able to open its office in Lithuania. Click for more Info

Financial Services Provider (FSP) License

The meaning of financial services is defined in section 5 of the Financial Service Providers (Registration and Dispute Resolution) Act 2008.

Common examples of financial service are:

  • Building Societies
  • Credit Providers
  • Credit Unions
  • Financial Advisers
  • Finance Companies
  • Foreign Currency Exchange Dealers
  • Fund Managers
  • Insurers
  • Investment Portfolio Managers
  • Issuers
  • Money Changers
  • Registered Banks providing financial services elsewhere

Once registered, the FSP can offer:

  • Financial adviser service
  • A brokerage service
  • Acting as a deposit taker as defined in the Reserve Bank of New Zealand Act 1989
  • Keeping, investing, administering, or managing money, securities, or investment portfolios on behalf of other persons
  • Providing credit under a credit contract
  • Operating a money or value transfer service
  • Issuing and managing means of payment (for example, credit and debit cards, checks, travelers’ checks, money orders, bankers’ drafts, and electronic money)
  • Giving financial guarantees
  • Participating in an offer of securities to the public in either of the following capacities:
  • As an issuer of the securities
  • As a promoter
  • Changing foreign currency
  • Entering into derivative transactions, or trading in money market instruments, foreign exchange, interest rate and index instruments, transferable securities (including shares), and futures contracts on behalf of another person
  • Providing forward foreign exchange contracts
  • Acting as an insurer
  • Providing any other financial service that is prescribed for the purposes of New Zealand complying with the FATF Recommendations, other recommendations by FATF, or other similar international obligations that are consistent with the purpose of the 2008 Act.

Types of licenses and that during the process of application for FSP registration you will select a specific type of license. Click for more Info

OFFSHORE BAN K ACCOUNT

Offshore Bank Account

Corresponding banking thru a Financial Boutique

This is the most accessible option to have access to a corresponding account system. Currently there is a FSP offering corresponding accounts for banks and financial institutions thru one of the largest banks in Europe with the following cost structure:

  • Annual fee 20,000 USD 
  • 0.50% p/payment 
  • Cost per wire: USD75 / EUR75 / GBP75
  • Price per swift: GBP50
  • Recall/Cancelation: GBP50

 

Our team is trained to provide you with the necessary information for the formation of your project.

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Fulton Abraham Sanchez, CPA

Fulton Abraham Sánchez, CPA is a Certified Public Accountant, specialized In Tax Planning, International Business, Wealth Management and Offshore Banking. You can email him to fa@fascpaconsultants.com or follow us on Facebook : FAS CPA & Consultants.

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