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The Underrated Island: Obtaining a banking license in Puerto Rico
And among financial
licenses, banking licenses are, by far, one of the hardest.
Offshore banking is also
increasingly harder, and many jurisdictions that were considered offshore and
that protected secrecy until no so long ago, are starting to surrender,
providing the financial information of their accountholders, increasing taxes,
among many other measures.
But one man’s trash is
another man’s treasure. This is awful for the offshore banking world overall,
but it can be an opportunity for those willing to take the chance.
There are still incredible
legit options out there. Many jurisdictions that were not much known before are
starting to shine as they offer solid asset protection and tax planning
possibilities.
That means that starting a
bank in one of those robust jurisdictions that haven’t capitulated to
international pressure can bring otherworldly benefits.
And we bring you one today:
Puerto Rico.
This gorgeous Caribbean
island, also known as la Isla del Encanto (the island of enchantment),
is better known for its unearthly beaches, baseball, and musical legends.
But Puerto Rico is also one
of the banking jurisdictions that have been benefited by the last changes in
the offshore banking world.
Puerto Rico is a US
Commonwealth, which means it is self-governed but is a semi-autonomous
territory of the US.
And this has one fantastic
consequence. 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 accountholders to foreign authorities, which adds an extra
layer of confidentiality to your asset protection and tax planning strategy.
The post-financial crisis pressure
of the US Government and the FACTA uncertainty led to a substantial reduction
of license emissions between 2011 and 2015, and those who were lucky enough to
obtain one had a hard time opening the corresponding accounts.
But, since 2016, offshore
banking licenses are again on the rise, and we can help you apply for such
licenses in Puerto Rico in Mundo Offshore.
Some of the most famous
jurisdictions, such as Belize and Panama, have increased costs or reduced their
secrecy benefits, which has turned Puerto Rico in a top jurisdiction for those
wishing to establish an offshore banking business with reduced government fees
and capital requirements.
Moreover, the island is a
popular destination for US citizens that want a more beneficial tax policy. In
the US, the top federal income tax is almost 40 %. Furthermore, states may also
tax an additional income tax. Some, such as Texas, Florida, or Wyoming, don't,
others charge a small state income tax, such as North Dakota (2.9 %), but in
other states, the income tax is more than 10 % (we’re looking at you, Hawaii
and California).
Puerto Rico applies a series
of tax incentives that can reduce the income tax rate to a microscopical 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 meager 4 % on their locally-sourced income.
La Isla del Encanto has much more to offer than
only Héctor Lavoe and Roberto Clemente.
It’s one of the most
underrated offshore jurisdictions on the planet. Those that start operating in
it right now will reap terrific benefits.
Puerto Rican banks are controlled
by the Office of the Commissioner of Financial Institutions of Puerto Rico. The
goal of the authority is guaranteeing that the financial sector and all the
economy is steady by safeguarding a strict regulatory system that ensures
investors that their assets will be kept safe on the island.
However, the island has been
in an economic crisis for much of the 21st Century. The economy has
withered, and the debt has risen continuously, while the public security system
is completely broken. Unemployment before coronavirus was almost 9 %, which was
more than double than the US average, and the poverty rate is more than twice
the poorest state in the US. And that’s before talking about the effects of
Hurricane Maria.
You may ask yourself, who would put his money, and who would open a bank in a country like that?
You may ask yourself, who
would put his money, and who would open a bank in a country like that?
- First, offshore jurisdictions
aren’t necessarily developed economies. As long as they have a steady financial
sector and a government that allows people to do their business, offshore
banking can thrive.
- Second, this is the best moment.
Since the establishment of the CRS, the offshore banking world has changed, and
Puerto Rico can be one of the most benefited jurisdictions because of this.
- Third, the island's economic
shape isn't ideal, and the coronavirus crisis surely won't help. However, the
government has taken serious reforms, of which we may start seeing results in
the mid-term. A restructuring plan temporarily stopped debt payments, and the
island is increasing its FDI flow thanks to its tax regime. All this means that,
if Puerto Rico continues in the right direction, it may see an influx of fresh
investment.
Why Puerto Rico? Five reasons you should obtain a
banking license in la Isla del Encanto
Welcoming tax regime
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 a heavy 33 % to just 4 %
thanks to a wide array of tax incentives.
Now, regarding financial
entities there are fantastic tax benefits available for you. 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.
Perfect location
Puerto Rico is in the
Caribbean but is part of the US. Thus, it's the perfect entryway for Latin
Americans in the US. It's a fantastic first step towards starting operations in
this country. Likewise, it is a popular destination for American retirees and
businesspeople who want to optimize their taxes.
Solid 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.
We can offer you an
already-existent license
We’ll talk about this in
detail later, but we can help you 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.
We are offering a bank that
is on sale and includes its 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.
Want to know more about the
bank we have for sale in Puerto Rico? Check out our article right here and enquire now!
The best of the best
A duly-licensed
international financial entity in Puerto Rico is well-known as one of the most
powerful financial services structures on the whole planet. These entities can
offer all kinds of international banking services, investment management, and
financial services from Puerto Rico for international clients.
Flexible 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.
Reduced costs
Other top offshore banking
licenses still allow you to reap 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 and one of our favorites in
Mundo. A financial entity in Puerto Rico must have a $550k minimum capital,
which is the smallest minimum capital requirement in the offshore banking
industry.
An offshore banking license in Puerto Rico
Now, let’s get into details.
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 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
Who are we, and what can we do for you?
In Mundo Offshore, along
with NTL, we have 25 years helping investors and businesspeople worldwide to
handle their business freely.
Because freedom is our core
value, we want to help you live, work, and invest freely, and protect the
legacy you’ve built for yourself and your loved ones.
We have operations and
offices all over the planet, but we started operating and offer our best
expertise in the Caribbean. We have well-established experts in Puerto Rico
that can help you with such a specific and complex operation as obtaining a
financial license.
As we said before, offshore
banking licenses are on the rise again, as many jurisdictions have become more
stringent and expensive. Puerto Rico is one of the most benefited players of
this process because it will lead more family offices and high net worth
individuals to seek offshore banking services in la isla del encanto.
And more demand means there
must also be more supply. You can obtain terrific benefits from this perfect
storm.
And we’re here to help.
Our services include:
- Our 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
As we said, 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).
And we can help you with all
that. Our package includes all steps of the legal phase (the first six
months) and all steps of the corporate phase. We'll lead you to find the
most appropriate and cost-effective office space and employees, based on
clients’ needs.
We'll work with you to
create a corporate image based on name availability and perception of the
chosen name and create a strong corporate style that will be used to create a
logo, website, business cards, marketing materials, forms, and all
documentation.
We 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 immediately.
Also, our team can perform
all post-launch audits:
- Online Accounting -
weekly or monthly reconciliation of all transactions
- Quarterly and annual
compilation of financial statements
- BSA/AML audit
- Information Technology
audit (SSAE 16)
- Financial audits
Puerto Rico offers one of
the best cost-benefit balances in the offshore banking industries. In a world
where the offshore banking jurisdictions practically don´t exist anymore, and
costs for banking licenses in such countries grows, Puerto Rico is a place you
must definitely be looking at.
In Mundo Offshore, we
believe Puerto Rico is still an underrated jurisdiction that hasn't reached its
full potential. That means operating a financial institution in this gorgeous
island can bring almost unparalleled investment returns for you.
Want to start the process of obtaining an offshore banking license in Puerto Rico with Mundo Offshore?
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