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Offshore Banking Licensing

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Offshore banking brings many benefits and it is completely legal when done correctly. But more useful is to know what are the best jurisdictions you can get a license for a start-up offshore bank. 

Dominica 

The even better news is that in this country fresh applicants are actively sought, which means the application process is easy and quick. To top it all, Dominica is one of the most preferred destinations for offshore banking because it also claims at the top of the second passport industries list, meaning that many of the people who start a banking venture also purchase a second Dominican passport.

Requirements For Banking Licensing

  • Approval of shareholders, directors, controllers. 
  • Approval from parent supervisory authority
  • Objectives of company.
    • Reasons.
    • Customer base (including names for Restricted license).
    • Asset structure.
    • Management structure.
    • Two-year projection.
  • Minimum required capital.
  • Principal office.
  • Authorized agents.
  • Local auditors.
  • Date of financial year-end.
  • Memorandum and Articles of Association.
  • Certificate of Incorporation.
  • Application fee.
  • Opening balance sheet.
  • License fee.

Cost and Project Fees

Application

  • Application and license fee $20,000 approx.
  • Consulting fees approx. $150,000.00 plus taxes and refundable expenses.
  • Retainer Fee $50,000. Bi-weekly hourly billing after retainer fee is used.
  • Operations (will vary by product and volume)
  • Staffing $300,000 pa
  • Administrative costs $300,000 pa
  • Corresponding Banking $60,000 pa
  • IT, systems and office equipment $300,000

Capital base

  • Deposited with a local bank (remains untouched) $1,000,000

Cayman Islands

The Cayman Islands are the most expensive jurisdiction to get a full offshore banking license. The fees paid to the government for issuing the license can hike up to over half a million dollars and another half dedicated to legal fees. Of course, there are many other costs you will have to cover until you get that license. Also the application processing time is not too short and extends to over 12 months. Now, these may seem as all negatives, but really, they are just preventing measures to ensure that the institution getting licensed will be safe for depositors, will not commit any fraudulent actions and will not go into bankruptcy easily. 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.

Requirements For Banking Licensing

  • CIMA charges an application fee of US$2,439.02 when seeking authorization for a B licensed bank, upon granting the fee payable is US$85,365.85.
  • Approval of name.
  • Approval of shareholders, directors, controllers. The following is required:
    • Personal Questionnaire.
    • Two character references.
    • Financial reference from a bank/trust company.
    • Police clearance certificate.
    • Evidence of two effective directors.
    • Evidence of relevant banking experience of at least one director.
  • Letter of recommendation from bank/trust company.
  • Approval from parent supervisory authority (where appropriate).
    • Assurance from parent supervisory authority of consolidated supervision and good standing of the applicant (where appropriate).
  • Letter of recommendation from bank/trust company.
  • Approval from parent supervisory authority (where appropriate).
    • Assurance from parent supervisory authority of consolidated supervision and good standing of the applicant (where appropriate).
  • Objectives of company.
    • Reasons.
    • Customer base (including names for Restricted license).
    • Asset structure.
    • Management structure.
    • Two-year projection.
  • Minimum required capital.
  • Undertaking not to solicit funds in Cayman Islands.
  • Principal office.
  • Authorized agents.
  • Local auditors.
  • Date of financial year-end.
  • Memorandum and Articles of Association.
  • Certificate of Incorporation.
  • Application fee.
  • Opening balance sheet.
  • License fee.

Cost and Project Fees

Application

  • CIMA application and license fee $90,000
  • Consulting fees aprox. $350,000.00 plus taxes and refundable expenses.
  • Retainer Fee $100,000. Bi-weekly hourly billing after retainer fee is used.
  • Operations (will vary by product and volume)
  • Staffing $300,000 pa
  • Administrative costs $300,000 pa
  • Corresponding Banking $60,000 pa
  • IT, systems and office equipment $300,000

Capital base

  • Deposited with a local bank (remains untouched) $1,200,000

Lithuania,  EU

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.

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

Capital

Capital required is 2M Euros. The specialized banking license provide access to the Single European Payment Area (SEPA) as well as access to the banking window with the ECB. The deposits from clients up to 100K Euros are insured under the EU Deposit Insurance Scheme.

Operations

Similar to offshore banks, the specialized bank is allowed to do remote client verification and does not require the physical presence of their clients. It also enjoys directs access to EU financial markets. In addition to that the government of Lithuania has informed that will support the applicants thru the first year if specialized banks commit minor violations.

Staff

Staff needs are primarily driven by the complexity of the business model and the scale of the bank. The minimum number of staff when applying for a licence can be as few as 9 – 10 individuals. However, this does not eliminate the obligation to create and further maintain appropriate frameworks ‒ corporate governance, internal organization (risk management, compliance and audit) ‒ to ensure sound and prudent activities, comply with capital adequacy and regulatory reporting requirements, and implement internal and external audits.

 

Our Offshore Banking License Package Includes

 

DOMINICA
Setup Fee
$150,000
Offshore Banking License In Dominica Package
Consulting fees
Get It Now
LITHUANIA
Setup Fee
$500,000
Offshore Banking License In Lithuania Package
Consulting fees
Get It Now

 

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