How To Get A Banking License In Puerto Rico And The Benefits

Puerto Rico isn't part of the Common Reporting Standard (CRS), which means the island's banks don't automatically share the financial information of its account holders to foreign authorities, which adds an extra layer of confidentiality to your asset protection and tax planning strategy.

Some of the popular jurisdictions like Belize and Panama, have increased the costs or reduced their secrecy benefits. This has made Puerto Rico a top jurisdiction for those wishing to establish an offshore banking business with reduced government fees and capital requirements.

Puerto Rico applies a series of tax incentives that can reduce the income tax rate to 4%.

In fact, financial entities enjoy tax benefits such as a 20-year exemption of tax payments for their foreign-sourced income and the same 4% on their locally-sourced income.

Our team can help you with your Puerto Rico banking license requirements. Contact us and we will help you with the process.

Stree view San Juan, Puerto Rico

5 Top Reasons To Get A Puerto Rico Bank License In La Isla Del Encanto

Attractive Tax Benefits
Puerto Rico has no dividends tax or capital gains tax. The corporate tax rate is territorial for foreign companies engaging in business in Puerto Rico, which means they only pay taxes on their Puerto Rican income. It can be reduced from 33% to just 4% thanks to a wide array of tax incentives.

There are fantastic tax benefits available for financial entities. An international financial entity established in Puerto Rico enjoys a 20-year tax exemption for their foreign-sourced income in Puerto Rico and a 4% tax rate on all locally-sourced corporate income.

Strong Banking Confidentiality
Puerto Rico isn't part of the CRS, which means it doesn't automatically exchange tax information with foreign tax authorities.

That makes it a top destination for investors and high net worth individuals that want to protect their assets with full privacy. Thus, it's a fantastic opportunity for those willing to offer these services to them.

Multi-Purpose License
Not only international banks can apply for the international financial entity license in Puerto Rico. Insurance companies, hedge fund managers, investment advisors, among others, are also some of the financial companies that usually apply for this license and reap its benefits. That means it shows it has unmatched flexibility.

Affordable Minimum Capital Requirement
Other offshore banking licenses still allow many significant economic benefits. Nevertheless, the costs of licenses have increased exponentially. That is another of the reasons why Puerto Rico continues to be a top choice.

A financial entity in Puerto Rico must have a $550k minimum capital, which is one of the smallest minimum capital requirement in the offshore banking industry.

Already-Existent License
You can buy an already-established bank in Puerto Rico, which is a simpler process and will allow you to have a client base from the beginning and to start operating almost immediately.

Banks that on sale come with an offshore banking license, physical infrastructure, banking software, offices, corporate image, assets, and a client base. If you want to operate ASAP, this a top option for you. Contact us for more details.

Puerto Rico beach view

Puerto Rico Offshore Banking License Requirements And Services
An international financial entity license in Puerto Rico must have a $550k minimum capital.

That is divided between a $300k deposit in another local bank and $250k that will be the minimum corporate capital. Also, the minimum total of the authorized shares of the company in Puerto Rico must be of at least $5m, but only $250k are paid upfront.

A banking license in Puerto Rico will allow you to:
  • Accept deposits, including demand deposits and interbank deposits
  • Place deposits in foreign banks and in other international financial entities
  • Emit, confirm, negotiate, or refinance credits
  • Participate in any banking transaction legally permitted in any currency or in gold or silver and participate in currency exchange businesses
Offshore international banks in Puerto Rico are barred from doing business with Puerto Rican individuals or companies, but they can do business with the Development Bank of Puerto Rico.

Documents And Procedure To Get A Puerto Rico Banking License
To start the procedure, we need the following documents:
  • Passports and CV of the final beneficiaries
  • Passports and CV of the directors
  • Copies of other financial licenses the company has (if applicable)
  • Proof of the necessary funds and their legitimacy
  • Letter indicating the intention of obtaining a financial license
  • Detailed business plan
  • Anti-money laundering policy
  • Approval policy
  • Financial analysis for the next five years
Preparing the application takes around two months, while the reviewing of the application takes about four months. The bank can start operating in about a year, but the whole process, including opening a bank account with the Federal Reserve, takes two years.

Puerto Rico Banking License Package
You can obtain a financial license in two ways: buying an already-existing bank or applying for a new license.

Puerto Rico offshore banking license package includes:
  • The creation of a banking corporation in Puerto Rico
  • Business plan (unless you already have one)
  • Directors’ and partners’ due diligence
  • Completing the application for the international financial entity license
  • Obtaining the documents that back the application
  • Submit the application and follow the process until the response
  • Guidance regarding banking software
  • Guidance regarding auditing companies
  • Searching for office space and personnel
The financial authority usually takes around four months to respond to the application.

When the application is approved, you’ll receive a preliminary license, which will allow you to rent an office space, hire employees, prepare your technological infrastructure, and deposit the $550k (split as explained above).

Our associates can help you with the process. The package includes all steps of the legal phase (the first six months) and all steps of the corporate phase.

Our associates will also help you to find the most appropriate and cost-effective office space and employees, based on your needs.

Our associates also offer an all-in-one IT infrastructure that provides real-time customer information, infinite scalability, and a fully integrated system, with fantastic security levels and the lowest false positive rate alerts, all for a low total cost.

If you want to know more about the package and the software we offer, please contact us.

Cobblestone street and colonial architecture in Puerto Rico

Provide All Post-Launch Audits
  1. Online Accounting - weekly or monthly reconciliation of all transactions
  2. Quarterly and annual compilation of financial statements
  3. BSA/AML audit
  4. Information Technology audit (SSAE 16)
  5. Financial audits
Puerto Rico offers one of the best cost-effective banking license in the offshore banking industries. In a world where offshore banking jurisdictions practically don´t exist anymore, and costs for banking licenses in such countries grows, Puerto Rico is definitely worth considering.