Offshore Banking Licensing in Puerto Rico

How To Apply For An Offshore Banking Licensing in Puerto Rico

Check Our Video Presentation And Learn The Details To Apply For An Offshore Banking License In Puerto Rico

The approval of the application for an International Financial entity (IFE) license in Puerto Rico is divided into two stages as per provision in the Act 273:

IFE organization permit.

  • Submit an application to the OCFI for a permit to organize an IFE.
  • Submit articles of Incorporation and bylaws.
  • Provide personal statements for 10% or more shareholders.
  • Pay a $5,000 nonrefundable fee and same annual fee if approved.

IFE licensing to start operations.

  • Have an authorized capital of $5,000,000 and at least $1,500,000 paid capital to start.
  • Have $300,000 financial guarantees acceptable to OCFI.
  • Rent an office space.
  • Hire at least 4 employees.
  • Comply with US Bank Secrecy Act, U.S. Patriot Act and Office of Foreign Asset Control (OFAC)

Act 273 was first adopted to allow international Puerto Rican banks to compete with the offshore banking centers in the Caribbean and to improve the conditions for conducting international banking in the country. The IFE carries a big deal of scrutiny and due diligence and the board of directors and officers should be qualified US bankers with a long proved history in the US banking industry. Currently access to the US federal banking system is suspended for new IFEs.

 Act 273 authorizes International Financial Entities to engage in traditional banking and financial transactions with non-residents of Puerto Rico. The country’s Office of the Commissioner of Financial Institutions (OCFI) is the entity responsible to license International Financial Entities (IFE) to conduct specified financial transactions.

Once the IFE is approved, the Puerto Rican Department of Economic Development of Commerce grants the following benefits for 15 years:

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

If you are successful in your application, the Tax Grant will be authorized for 3 consecutive periods of 15-years, making it 45 years in total. The extensions are requested from 6 to 24 months before the end of applicable 15-year term.

Here are some of the activities your business will be able to exercise under the IFE license:

  • Accept deposits and borrow money from non-residents of Puerto Rico and certain government institutions.
  • Place deposits in any Puerto Rican bank and foreign banks organized in Puerto Rico.
  • Make loans and issue letters of credit to non-residents of Puerto Rico.
  • Discount money orders and bills of exchange to non-Puerto Rican residents.
  • Invest in securities and stocks, as well as Puerto Rican government bonds exempt from tax.
  • Carry transactions in any currency and gold or silver and foreign currency trade.
  • Underwrite and trade notes and debt instruments issued by  non-Puerto Rican residents.
  • Engage in trade financing of import and export of raw materials and finished goods.
  • Acquire and lease personal property on behalf of non-Puerto Rican residents.
  • Establish branches outside Puerto Rico in the continental USA or in other foreign country.
  • Act as a fiduciary, executor, administrator, registrar of stocks and bonds, custodian, trustee, agent and any other fiduciary capacity with non-residents of Puerto Rico after obtaining a special permit from the government.

If this is not compelling enough, we are glad to inform you that there are additional benefits to opting for Puerto Rican residency for individual investors. If you want to hear more about it and make sure your application will be successful, give us a call and one of our experts will be happy to take your case and see it through, resulting in opening new horizons for your organization and assets.

Our Turn Key Package Includes

Silver

Setup Fee

$500K

International Banking License IFE Application

Company Incorporation in PR
International Banking License
Banking Software Introduction
Legal Firm Introduction
Accounting Firm Introduction
Local Office Search
Local Employee Search

Gold

Setup Fee

$600K

 IFE Banking License Application + IT Setup

Company Incorporation in PR
International Banking License
Banking Software Introduction
Legal Firm Introduction
Accounting Firm Introduction
Local Office Search
Local Employee Search
IT Banking Software Setup

Platinum

Setup Fee

$650K

 IFE Banking License Application + IT Setup + Consulting

Company Incorporation in PR
International Banking License
Banking Software Introduction
Legal Firm Introduction
Accounting Firm Introduction
Local Office Search
Local Employee Search
IT Banking Software Setup
Consulting First Year

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