Better jurisdictions for an offshore banking license

While it is true that Offshore jurisdictions represent an almost essential opportunity for investors in the world, the truth is that their existence has become more complicated every time in recent years. This time I will tell you about the best jurisdictions in the world to apply for an Offshore Banking License.

The integrity of offshore jurisdictions recently underwent a notable crisis, specifically after the birth in 2010 of the FACTA law United States, which through the IRS pushed hundreds of small companies and offshore banks in the world to disappear. The crisis that eventually the offshore banking was victorious and as in any process of natural selection, only the organisms most apt to change survived.

The impact that IRS has had since the beginning of its frontal war against the OFFSHORE banks is clear since in its objective to monitor and prosecute the US taxpayers, the government of the country has mounted a huge and implacable tax and tracking structure that in 2012, many experts considered the OFFSHORE bank practically dead.

The reality at present is very different from what the IRS predicted, since the various offshore jurisdictions all over the world have aligned themselves with the FATCA initiative,   something that on the one hand has complicated the American taxpayers, bordering them to hide from the IRS, but that, on the other hand, has preserved and legitimized   the existence of offshore companies. Let’s say that in reality, the only ones impacted by the IRS war against Offshore Jurisdictions were the American taxpayers and the smaller banks, so much so that even many Americans are already giving up their citizenship.

The war has ended and after the alignment of the different offshore jurisdictions with the FATCA law, Offshore Banking is currently reinforced with new international regulations, its situation in general terms has improved, that is, that international business in Offshore jurisdictions is still highly attractive

Next, I will name the best jurisdictions to acquire an Offshore banking license.

Where to Acquire an Offshore Banking License?

Virtually all offshore jurisdictions in the world have the capacity to offer banking licenses, but there are notable differences among them that make them more or less convenient according to the needs and capacity of each society.

In general terms, the most attractive jurisdictions to grant offshore bank licenses are:

  • Andorra
  • Eel
  • Bahamas
  • Barbados
  • Bermuda
  • Belize
  • Alligator
  • Dominica
  • Lebanon
  • Luxembourg
  • Montserrat
  • Panama
  • Seychelles
  • Saint Kitts and Nevis
  • St. Vincent and the Grenadines
  • Republic of Vanuatu

As I commented, each jurisdiction offers alternatives and specializes in different schemes that depend on the target market since they are based on the client’s objectives. As the case may be, it is also important to consider the reserve capital of each jurisdiction, as this varies greatly. On the other hand, some jurisdictions require from 500,000 to 3 million for a banking license. The smaller banks require from 1 million to 7 million dollars, on the other hand, large jurisdictions like the one of Panama or Luxembourg can require from 30 million dollars to grant a banking license.

In general terms, some important considerations when thinking about acquiring an Offshore banking license according to your jurisdiction are the following:

  • Andorra and Luxembourg specialize in issuing licenses for large private banks
  • The Cayman Islands provide investment advisory services and issue licenses for captive banks.
  • Vantau grants licenses   to captive financial institutions and specializes in European companies.
  • St. Kitts and Dominica are governed by the regulations of the Central Bank of the Caribbean.
  • Belize is ideal for creating a bank that will promote deposits but it is important to consider that this jurisdiction works with high Capital Ratios.
  • Panama is one of the most advanced international financial centers since the personnel costs are lower, it has advanced communications infrastructure and enjoys a consolidated reputation worldwide.

Depending on the jurisdiction, the type of offshore banking license, or your business plan, The granting of a license has a cost that can range from $ 175,000 to $ 650,000 dollars. The business plan is fundamental in the application for a banking license since it has to contemplate several elements, such as a detailed business plan, anti-money laundering documents and a detailed board of directors.