OFFSHORE BANK LICENSES - THE SETUP OVERVIEW

Only a handful of jurisdictions offer ideal environments to incorporate / set-up an own private banking institution. Offshore bank licenses have become increasingly popular with institutional clients and crypto entrepreneurs, due to the fact, that many activities can be easily provided in sharp contract to onshore solutions such as in the USA, Europe or Asia in particular.

Many offshore jurisdictions are offering licensing solutions to establish privately owned private banking institutions. 

Countries such as Puerto Rico, Dominica, The Comoros Union, Vanuatu or the Cook Islands are prime-jurisdictions to establish a bank.

However, requirements are differing quiet significantly - starting with capital requirements, personal eligibility / competence and skills requirements of applicants and also services to be provided after the desired licenses have been obtained. 

There are different types of Offshore Bank Licenses. They differ significantly in terms of permitted activities, targeting clientele and customers, regulatory framework etc.

Here are some examples:


General Bank License, used in all onshore-and offshore jurisdictions.
Understood in a majority of jurisdictions as a license for providing bank services, at the place of registration and internationally, direct to the general public. The bank acts as any other bank entity, it can accept deposits from the public and perform common bank services with residents or non-residents.In an overwhelming majority of countries, however, the activity is limited to providing services to non-residents, i.e. offshore banking services only. This type of offshore bank is established in lieu of providing commercial bank services in an offshore regime.

 

Restrictive Bank License, e.g. from countries in the Pacific and Caribbean
Often referred to as the "internal" license, is a license that:

  • limits territorial activities of the bank

  • limits the possibility of providing services in foreign currencies

  • limits the possibility of providing services to certain people

Offshore Bank Licenses, widely used in Caribbean jurisdictions
These licenses are so as the name already states, to be used offshore (usually no interaction with the domestic, local market and its market participants) but with a far wider range of permitted activities, especially and often designed for the needs of the Fintech Industry. Permitted activities for Offshore Bank Licenses, with restriction to interact in the local market, are for example:

  • crypto trading platform services 

  • brokerage services of high speculative instruments which are for domestic, General Bank Licensees, often not accessible and restricted

  • crypto currency exchange activities

  • issuance of securities tokens / ICO launches

  • card processing of high risk merchant payments 

  • high yield accounts 

Offshore Banking Documents under highest standards.

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Offshore banks can become excellent tools for:

  • Tax planning

  • Increase in image of the financial group or holding

  • Active cash flow management

  • Issuing bonds and guarantees for tender proceeding purposes

  • Easier access to bank information about business partners and competitors

  • Easier access to financial markets

  • More progressive financing of business activities of a holding or financial group

  • Establishment of confidential and flexible bank accounts

  • Providing loans and credit facilities

  • Offer Cryptoservices, such as trading, storage or even own crypto based portfolios

 

Capital Requirements

"The license type, the jurisdiction and the requested activities" are usually an indicator with what bank incorporators have to calculate in terms of minimum capitalizations and capital requirements. The ranges in the Offshore Banking Sector are immense.

Some countries, such as the Comoros Union, jurisdictions in Africa are offering incorporators a minimum of required paid-up capital requirements. It can range from 0,00 USD to up to 500,000 USD in this category. In most cases the local regulator or Central Bank demands a deposit, but IFLS Corporate Services Ltd has already established banks with zero deposits, just based on a proof of available funds which are deposited with banks elsewhere and who consequently do confirm it.

Caribbean jurisdictions usually require a paid-up capital starting at 500,000 USD. Especially Puerto Rico is here a real bargain. Other countries such as St. Vincent and The Grenadines or Dominica can easily require up to 1,000,000 USD or even 5,000,000 USD.

Similar capitalization demands are currently in place in Vanuatu, The Cook Islands and other micro nations in the pacific. The average minimum capitalization in this region is around 5,000,000 USD.

Attention:

NOT ALL OFFSHORE BANKS CAN OFFER SIMILAR SERVICES - ALL DEPENDS ON THE JURISDICTION AND THE LOCAL REGULATOR AND THE RESPECTIVE INTERNATIONAL BANKING ACTS / OFFSHORE BANKING ACTS. 

Questions? Reach out to us.

Typical Bank Form Requirements

The information and backgrounds required from the bank license applicant, in an overwhelming majority of jurisdictions, are as follows:

 

  • Bank name and its legal form

  • Applicant status (whether the matter concerns establishment of a branch office of a foreign bank or a new company)

  • Names and curricula vitae of the bank directors

  • Certificates of police clearance of applicants and directors

  • Bank and business references

  • Submission of information about economic management of the firms of the applicant(s)

  • Identification of the bank shareholders

  • Identification of the type of issued shares of the bank (registered shares, priority shares, shares without voting rights, etc.)

  • Denomination of the issued shares of the bank and type of currency used

  • Capital structure of the bank and capital security

  • Capital reserves of the bank Information stating from what resources the bank will be invested

  • Document of certifying that the registered capital has been paid up (if registered in the host country)

  • Document certifying that all taxes, stamp duties and royalties have been settled

  • Identification of the registered office in the host country

  • AML / CFT Compliance Policy Setup

  • Identification data of the registered agent or representative (if required)

  • Identification data of the auditor and lawyer with a registered office in the host country

  • Type of intended services which are to be provided

  • Territorial operational range of the bank

  • How the company will protect itself from fraudulent or criminal conduct

  • Business plan of the bank (the authorities generally require a balance sheet from 3 to 10 years)

  • Benefits for the host country resulting from the bank operation

  • Signed and presented applications for the issue of the bank license

IFLS is the leading source for the acquisition and establishment for financial licensed entities in more than 25+ jurisdictions.

Instant Contacts

 

T +46 21 490 49 88
T +44 141 628 0943

email:    info@banking-licenses.com

Register Information: 99123

LEI Info: 8945009P1UA8BVZ79Q85

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IFLS Group

 

Registered Office
Ajeltake Rd, Ajeltake Island
The Trust Complex
MH 96960 Marshall Islands

Asia
IFLS Corporate Services Ltd

Main Office Tower - Level 14
Financial Park Labuan Complex
87000 Labuan
Malaysia

IFLS Corporate Services Ltd accepts BTC / USD / EUR Payments. SWIFT & SEPA. Up from May we do accept in addition SGD, HKD and JPY.

IFLS is not a bank, nor does it provide banking services. IFLS offers international company formation, corporate administration services, and bank/broker introductory services and account opening assistance through third parties only. This website is only used for promotional marketing purposes of IFLS and is not intended to portray that this is the site of a bank, financial institution or being itself a licensed or regulated Corporate Services Provider. IFLS connects customers and Corporate Services Provider which are in an exclusive partnerships with IFLS Corporate Services Ltd in the respective jurisdiction(s). 

In the following jurisdictions IFLS is providing the services through professional CSPs, banks, legal representatives, accountants etc. All services are considered to be third party services, but under permanent control and monitoring of the IFLS Group, which will be your guide and primarly contact point until the corporate and/or licensing setup has been finalised successfully. We will introduce you directly the competences but still assist you as your partner during the entire setup process. The jurisdictions where third party services by CSPs / MC (Management Companies) are being carried out are: Bahamas, BVI, Cayman Islands, Seychelles, South Africa, Malaysia, Vietnam, Japan, Vanuatu, Cook Islands, UAE, United States of America, Kazakhstan, Republic of Georgia, European Union in general.

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