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Mar 10, 2020 — Just about the only jurisdiction in the world actively issuing international banking licenses is the U.S. territory of Puerto Rico. If you’re looking to establish a de novo bank in an offshore banking center, all of the action in 2020 will be in Puerto Rico.
First, let me define what I mean by an “international bank” or an “offshore bank.” An international bank is one that is built to accept clients from outside of its jurisdiction of incorporation. An international bank in Puerto Rico can accept deposits from anyone in the world except for those living in the territory.
That is to say, an offshore bank licensed in Puerto Rico can accept clients from the United States or anywhere else in the world. The only limitation is that it can’t accept deposits from people living or working in Puerto Rico.
Of course, limitations apply. Puerto Rico is a US territory and U.S. sanction rules apply. Those from sanctioned countries, such as Venezuela, can’t open accounts in Puerto Rico.
Also, offshore banking centers generally offer tax incentives to their licensees. The tax rate in Puerto Rico is only 4%, which compares favorably to other banking centers. Also, there is no tax or withholding tax on dividends paid to foreign holding companies.
But, the main reason Puerto Rico is so popular is the fact that it’s relatively easy to get a correspondent bank. While it’s nearly impossible to secure a correspondent partner with a license from a lesser jurisdiction such as Cayman, St. Lucia or Dominica, most of the banks in Puerto Rico find a correspondent bank.
And banks in Puerto Rico can apply to the Federal Reserve for a FedWire account. This means that the US Fed can act as your correspondent bank.
For information on the steps necessary to set up a bank in Puerto Rico, see: banklicense.pro/start-a-bank-in-puerto-rico-in-10-steps/
Please send me an email for a copy of my 330-page book on the topic and/or a quote to set up a new bank in Puerto Rico.