Offshore bank license and offshore banking licenses are still in high demand, though they are very difficult to obtain. Only the most qualified and best capitalized applicant will be able to negotiate an offshore bank license from any country.
Of the respected nations, I recommend Belize, Dominica and Panama as jurisdictions that are willing to issue a license to highly qualified individuals. Other countries, such as Cayman, have stopped issuing licenses and those with low compliance standards (I won’t name names here) are being pushed out of the industry.
In my opinion, Belize banking license is the most efficient for a start-up offshore bank because this country is open to international investment, merchant, and currency / transactional international banks. Panama, on the other hand, is looking for only large Class A deposit taking banks.
A Belize bank license can be negotiated with a minimum $3 million to $5 million in corporate capital, while Panama requires $15 to $25 million. I note that the Belize statute requires $3 million, but regulators are demanding better capitalized banks.
The Belize offshore banking license application begins with submitting a business plan to the central bank and the Ministry of Finance, followed by a meeting with the Belize government. To facilitate the application process, your legal representative (me) along with the bank’s principal officers are required to attend the initial introductory meeting with the Central Bank of Belize. It is mandatory that the bank principals (officers and directors) be qualified and experienced in international banking business and be of suitable character and financial status. The application should be as complete as possible and submitted with substantial documentary support for the application. The entire application process can take anywhere from three months to one year to be completed.
The owners of the bank must be individuals and not a corporation. The only exception is if you already have a license in another jurisdiction. Then, your domestic bank can obtain an international license in Belize.
There are two types of offshore (international) banking licenses available in Belize. An “A’ class banking license allows you to transact banking business with anyone outside of Belize. The minimum capital requirement for a Class “A” bank is US$3,000,000 and most will be expected to provide $5,000,000. The annual licensing fee for a Class “A” License is US$20,000.
Class “B” banking licenses are allowed to establish, maintain and operate a business office in Belize with certain restrictions that include being prohibited from issuing a check book to any depositor, and may only do business with those listed on the license. This license is commonly referred to as a Captive Bank. The minimum capital required for a Class “B” bank is $1 million. The annual licensing fee for a Class “B” License is US$15,000.
After the business plan is completed, the Belize corporation is formed, and corporate capital is deposited in to a bank in Belize, the Belize Ministry of Finance will consider your application on the following terms:
- the financial reputation and standing of the applicant
- the applicant’s record in international business
- financial performance of affiliated companies for three years immediately preceding the date of the application, certified by an independent auditor
- the audited financial net worth of each of the shareholders, associates or affiliates of the company applying for the offshore banking license
- the character and standing of all the shareholders/directors or proposed directors of the applicant company
A local office and a small number of employees in Belize is required. You may run the business from abroad and place IT and sales anywhere in the world.
After your license is granted, I will be happy to remain on and provide ongoing support, negotiate a MasterCard and Visa Acquiring license, and handle any issues as necessary. Here is a description of some of my experiences in these secondary areas:
- I have 15 years of experience in international corporate formation, offshore asset protection, and international business planning. This includes companies in various countries, including Panama, Belize, Hong Kong, Cook Islands, Taiwan, and China.
- I am an expert in US tax planning for offshore businesses, FATCA, and compliance. I have a many of articles on this topic at www.premieroffshore.com and a book at www.premieroffshore.com/category/taxbook/
- I have unique experience in multicurrency transactional businesses and offshore merchant acquiring. A general article on this topic can be found at http://premieroffshore.com/offshore-merchant-account/
- I have experience in both high risk (MLM, MOTO, etc.) and traditional credit card acquiring and licensing. I have assisted various banks secure acquiring licenses or payment cards / debit cards / Visa Electron Cards / or secured cards.
Please contact me for a free and confidential consultation on securing a banking license from Belize or any other jurisdiction. Costs will vary with the needs of each applicant, but you should assume a budget of at least $200,000 and a minimum of six months after the application is submitted.