17. OFFSHORE BANK LICENSE
Kw: OFFSHORE BANK LICENSE
Kw: OFFSHORE BANK FOR SALE, BUY OFFSHORE
BANK, OFFSHORE BANK
are the components of obtaining Offshore Bank License?
components should be taken into consideration when trying to obtain an OFFSHORE BANK LICENSE.
For offshore banking, these components are termed to be unique. You need to
develop each area as baking is a highly regulated and licensed industry. Only
then will the licensing board will derive satisfaction and favor you.
Top components to consider when considering OFFSHORE BANK FOR
strategy: Comprehensive business strategy will be required. It is rather the
heart of the bank license application. Hence, it is to include parent company
audited financials or tax records, accounting of beneficial owners. It also
should include projections of 3-5 years that are broken further by the business
unit. Such projections are to cover liquidity ratios, risk, funds, break-even
analysis, reserves, etc. The regulators should be convinced with the business
plan. The applicant is expected to have a requisite experience, fine character,
carefully funded plan. Also, he/she should know the risks involved including
the compliance requirements to operate an OFFSHORE BANK. The business
plan should be good enough to satisfy the licensing board, auditors and
countries have set specific criteria for capital requirements to set up
international banks. The minimum capital amount should comply with the set
statute. $1 million is the required capital in Dominica to be deposited in a
government bank. The amount is $250,000 in Puerto Rico of paid-in capital along
with a government deposit of $300,000. License is issued by both the
jurisdictions with the minimum capital amount under the law. More cash is
desired by other countries. The license can be obtained in Belize with $1 million.
However, for an offshore banking license, the amount required will be around $3
to $5 million. Larger jurisdictions are known to negotiate capital on a case
basis. A bank subsidiary from a popular destination for example can provide an offshore
license with $ million capital in Panama. Without a major license, a Class-A
license is to be obtained from Panama with a capital of $25 million.
systems: It is likely to be the very foundation of the banking operations. If
you BUY OFFSHORE BANK, the IT system should handle AML and KYC. It
should also carry out compliance background checks, document management,
transfer, account openings, etc. The government modules are likely to verify
these modules carefully before giving the ‘go-ahead’ signal. For the
international bank, compliance and core system modules are considered to be the
largest startup expenditure. The general expenditure on the IT system is around
$100,000 to $1 million. Implementing the IT system will take around 3-6 months.
On obtaining a provisional license, the IT system is to be taken care of, which
can be time-consuming.
business plan submitted should include key personnel as well as the board of
directors. They should possess extensive banking experience. Your employees and
management should be locals. The Board of directors should include a couple of
locals. More favors can be derived from the licensing authority if
professionals possess an excellent track record. Moreover, the board members
are to have omens knowledge in compliance and banking law. The basic thing you
would like to manage is AML, KYC, account openings and correspondent banking.
It will also include compliance in the same country of license issuance. Most
banks located in small jurisdictions tend to place investment/trading
management support in larger countries like Panama or Switzerland. Your license
country should be large to offer quality employees in huge numbers. Your staff
location will also play a crucial role to determine tax expenditure.
BANK LICENSE: Very few countries
support startup banks to get international banking licenses. For instance,
offshore licenses are offered to banks with valid licenses obtained from major
jurisdictions by Cayman and Panama. A license can be obtained to operate in the
Cayman Islands if you possess a license from Germany or the U.S. This is
because your home country already has imposed stringent regulations. With the existing
license, an offshore license can be obtained with $5 million from Panama. But
$25 million capital will be necessary to incorporate a new Class-A bank in this
country. Dominica and Puerto Rico are, however, considered to be the most
active of all jurisdictions to consider OFFSHORE BANK FOR SALE.
systems: It is developed generally around the IT system. It allows further
development of an in-house team. Otherwise, compliance monitoring is to be
outsourced to any reputed local law firm. All operational risks associated with
the international bank derive from potential compliance program failure. You
are likely to face huge penalties and even shut down much faster if you fail to
know client requirements. It also involves FATCA OCEF reporting and money
laundering rules. Your correspondent partner or the license board may shut you
off from the system. Government regulators are likely to watch very carefully
your compliance program, irrespective of your jurisdiction. Errors are likely
to be dealt with swiftly.
Considerations: Your corporate profits are not likely to be taxed by the majority
of the offshore banking jurisdictions. Rather, they charge some license fee
annually. Cayman is known to charge annual international banking license
maintenance fees of $85,000. On the other hand, Puerto Rico is said to charge
on corporate profits of 4% along with an annual fee of $5,000. If you BUY
OFFSHORE BANK, the tax benefits on operating cost are quite substantial. However,
to optimize the tax deals, you will require coming up with a comprehensive tax
plan. During the initial phase, global tax planning is crucial. Only then can
you optimize income in low-tax jurisdiction as well as reduce income in those
high tax countries.
Account: It is considered to be the very lifeblood for any international bank.
You can hold money as well as carry out transactions through the facilities
offered by a larger bank. If a Dominica bank, for example, is eager to hold US
dollar accounts, then a USA correspondent banking partner will be desired. Having
US Fedwire abilities, the US partner can perform the transactions in US
Getting to know the above components will allow you to set up an OFFSHORE
BANK LICENSE without much difficulty.