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

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Puerto Rico is not part of the Common Reporting Standard (CRS), meaning its banks do not automatically share account holders' financial information with foreign authorities. This adds an extra layer of confidentiality to your asset protection and tax planning strategy.

Some popular jurisdictions, such as Belize and Panama, have raised costs or reduced their secrecy benefits. As a result, Puerto Rico has become a top jurisdiction for those looking to establish offshore banking businesses with lower government fees and capital requirements.

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

In fact, financial entities benefit from tax advantages, such as a 20-year exemption from taxes on foreign-sourced income and the same 4% rate on locally-sourced income.

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

Attractive Tax Benefits

Puerto Rico has no dividend tax or capital gains tax. The corporate tax rate is territorial for foreign companies doing business in Puerto Rico, meaning they only pay taxes on their Puerto Rican income. This rate can be reduced from 33% to just 4% thanks to a wide range of tax incentives.

Financial entities also enjoy fantastic tax benefits. An international financial entity established in Puerto Rico receives a 20-year tax exemption on foreign-sourced income and a 4% tax rate on all locally sourced corporate income.

Strong Banking Confidentiality

Puerto Rico isn't part of the CRS, meaning it doesn't automatically share tax information with foreign authorities.

This makes it a top destination for investors and high-net-worth individuals looking to protect their assets with greater privacy. It also presents a fantastic opportunity for those looking to offer financial services in a jurisdiction with strong confidentiality protections.

Multi-Purpose License

The international financial entity license in Puerto Rico isn’t limited to international banks. Insurance companies, hedge fund managers, investment advisors, and other financial institutions can also apply and benefit from its advantages.

This makes it a highly flexible option for businesses looking to operate within a favorable regulatory environment.

Workable Minimum Capital Requirement

With the new Puerto Rico banking law, establishing an international bank has become significantly more onerous. The capital requirement has increased to $10 million, and an initial application fee of $50,000 has been introduced to deter frivolous applications and queue jumping.

Despite these changes, Puerto Rico continues to offer a competitive regulatory environment compared to other offshore banking jurisdictions.

Already-Existent License

You can purchase an already-established bank in Puerto Rico, which simplifies the process and allows you to acquire a client base from the start, enabling near-immediate operation.

Banks for sale come with an offshore banking license, physical infrastructure, banking software, offices, corporate branding, assets, and an existing client base. “Puerto

Puerto Rico Offshore Banking License Requirements And Services

An international financial entity (IFE) license in Puerto Rico now requires a minimum capital of $10 million.

Previously, the requirement was $550,000, divided into a $300,000 deposit in a local bank and $250,000 in minimum corporate capital. However, under the new Puerto Rico banking law, the capital threshold has significantly increased.

Additionally, the minimum authorized share capital remains at $5 million, but applicants must now demonstrate stronger financial backing to meet regulatory expectations.

A banking license in Puerto Rico allows you to:

- Accept deposits, including demand deposits and interbank deposits.
- Place deposits in foreign banks and other international financial entities.
- Issue, confirm, negotiate, or refinance credit instruments.
- Engage in legally permitted banking transactions in any currency, as well as gold or silver.
- 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.