Offshore Banking License Jurisdictions
In my experience, the best offshore banking license jurisdictions are:
- Kitts & Nevis
- Vincent & the Grenadines
Based on our experience bank require $500,000 to $3 million for a captive bank license and $1 million to $7 million in capital is standard for a small international bank. Jurisdictions like Panama and Luxembourg may require $30 million for a general license. Procedure will take from 6 up to 12 months.
TYPES OF OFFSHORE BANKING LICENSES
Captive Bank: A bank with a captive license may only do business with those named in the license. So, each client / owner of the bank must be approved by the central bank. Captive offshore banks are typically used by large family offices, groups of wealthy individuals (say 10 to 15 partners), or multinational corporations, to manage their lending and worldwide tax obligations. A captive bank may not market its services to the general public.
International Bank: The license we most commonly associated with the offshore industry is the international banking license. This allows you to conduct all types of banking business with cutomers outside of your country of issuance. For example, if you operate an international bank in Belize, you may do business with anyone except Belize citizens and residents.
General Bank: A general license allows you to conduct business with both local and international clients. Of course, central banks want to protect their citizens first, thus capital requirements and regulation of generally licensed banks are tighter than international banks.
Purchase of an Existing Offshore Banking License
From time to time, captive and international banking licenses become available. Usually licenses are sold by operators who went through the process and lost their funding somewhere along the way.
Each owner of a bank must be approved by the regulatory authority. The new ownership group will need to go through an extensive background check, a new business plan approved, and personal financial statements must be provided. Expect this process to take several months.
To account for this delay and potential risk, you need to run the purchase of an existing offshore banking license through an escrow agent. Condition a portion of the purchase price (usually 25% to 50%) on the approval of the central bank