Obtaining a banking licence in Puerto Rico

International banking license of Puerto Rico is an access to the U.S. financial market, the ability to work with a large number of correspondent banks. The island belongs to the U.S., so it has not signed an agreement on the exchange of tax data under the CRS protocol. This means that the data from offshore banks will not be available to the tax authorities of the country where the client lives.

Advantages of a Puerto Rican license

The main advantage of a Puerto Rican banking license is confidentiality. A customer who works with a financial institution in this jurisdiction can count on the fact that information about his/her transactions will not leave the institution's walls.

On the list of other advantages:

• Banks in Puerto Rico are given a 20-year tax break on foreign capital income. It's also possible to get a 4% tax rate on local capital gains. The exemption will be valid for 15 years, with the possibility of extension for the same period.
• Not only banks, but also insurance companies, investment advisors, etc., can obtain a permit for international financial activities.
• Interest, profit distributions paid by the bank to non-residents are not subject to income tax and capital gains.
• Gross receipts, which are assessed by municipalities depending on the size of the business, are exempt from fees.

Puerto Rico is the country known for having the lowest cost for a banking license. Automatically, it reduces the cost of company formation, other expenses.

What the license allows to do

A company that obtains a Puerto Rico Class B banking license will operate as an IFE - International Financial Institution. The term bank can not be used if the plan is to work only with non-residents. IFE can provide services to all non-residents, but not to local residents.

IFE is available for all types of offshore banking, including:

• Open deposits from non-residents.
• Borrow/lend money from non-residents.
• Invest money in local government securities exempt from income tax.
• Engage in exchange of currency, precious metals.
• Deal with securities that have been issued by a non-resident.
• Assist in the organization and capital management of international financial institutions, which are outside the jurisdiction.

Stages in obtaining a license

• Permission from OCIF to conduct financial activities outside the country.
• Formation of the company structure, registration of the office, payment of share capital - these procedures should be initiated after the permit is obtained.
• Application and obtaining a license - the procedure takes about four months. After the license is issued, you have to find a correspondent bank, otherwise you will not be allowed to work.
• Filing a copy of the license to the State Department of the island within 10 days after issuance.

It takes three to four months for approval.

Requirements for the recipient

The banking license is issued by (OCIF). The applicant must show proof of solvency to convince of his or her reliability.

Other requirements for the recipient:

• The permit is issued to legal entities.
• The company must be registered as an LLC, corporation or partnership.
• A physical office must be opened on the island with at least four employees.
• The company must show a plan of operation for the next 5 years.
• All directors and owners must not have a criminal record, be known for fraud.
• Minimum share capital $550,000 ($300,000 blocked, $250,000 on the balance sheet as working capital, i.e. cryptocurrency, stocks/bonds).
• Minimum number of shareholders - 1.
• Minimum number of directors - 1.

How to get a license

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