Updated June 2025
Puerto Rico remains the global hub for international banking—and in 2025, it just got more serious.
If you’ve followed the growth of Act 273 banks over the past decade, you already know why Puerto Rico has dominated this space. But 2024 and 2025 brought major reforms. Capital requirements have doubled, regulatory oversight has sharpened, and compliance standards are rising fast. In short, the easy days are over—and the professionals are taking over.
Whether you’re planning to buy a bank in Puerto Rico or applying for a new license, here’s the complete update to Act 273 you need to read.
A Brief History of International Banking in Puerto Rico
Puerto Rico’s journey into international banking began in 1989 with the creation of the International Banking Entity (IBE). These early banks paid 0% in tax and were primarily used by major institutions—UBS, Citibank, and Banco Popular among them. Citibank was the first to receive a license.
In 2012, the IBE law was replaced by Act 273, formally titled the “International Financial Center Regulatory Act.” This law introduced the modern International Financial Entity (IFE) structure and a modest 4% corporate tax rate. It was designed to bring high-paying finance jobs to the island while giving operators access to the U.S. banking system.
In the early days, IFEs were undercapitalized. Until 2017, you could launch one with just $550,000. Not surprisingly, many of these banks failed. By 2017, the minimum capital requirement rose to $5 million. In 2024 and 2025, the rules changed again—dramatically.
What’s New for 2025?
Here’s what’s changed under the 2024 amendment and the new 2025 implementation guidelines:
Higher Capital Requirements
The minimum paid-in capital has increased from $5 million to $10 million, and the CD deposit requirement has jumped from $200,000 to $1 million. That’s $11 million just to apply, plus an estimated $1 million startup budget, for a total of $12 million in cash required.
Application and Ownership Rules
- Application fees increased from $5,000 to $50,000.
- Due diligence and investigation fees may add another $25,000.
- All share transfers now require regulatory approval—regardless of percentage.
- A $75,000 fee applies to any 10% or greater transfer of ownership.
Employee and Compliance Requirements
- Minimum staff in Puerto Rico has increased from 4 to 8.
- Each IFE must employ a Chief Compliance Officer and support staff in Puerto Rico.
- Compliance must be autonomous and based entirely on-island.
Holding Company Jurisdictions
Only Puerto Rican or U.S. holding companies may now apply. BVI, Cayman, and other offshore structures are no longer permitted.
Independent Directors
Every IFE must appoint at least one independent director (not employed, not invested, and not financially connected to the bank or its shareholders).
Virtual Asset Custody
IFEs may now offer custody services for virtual currencies—but cannot act as exchanges.
Fines and Penalties
- Late license renewal? Expect fines of $1,500 to $5,000 per day.
- General violations? $5,000 to $25,000 each.
Transition for Existing IFEs
Current banks have a few years to meet the new capital rules:
- $500,000 CD by 2025
- $750,000 by 2026
- $1 million by 2027
Banks with issues (regulatory, capital, compliance) won’t be permitted to sell. Clean IFEs can still be acquired, and buyers inherit the right to increase capital gradually. Sales will remain limited—only two or three clean banks trade hands per year.
Why Puerto Rico Still Wins in 2025
Despite the higher bar, Puerto Rico remains the most attractive jurisdiction for international banking:
- Access to the U.S. financial system (Fedwire, ABA numbers, SWIFT)
- Tax rate: 4%
- No U.S. federal tax
- No tax on dividends to non-U.S. persons
Puerto Rico remains the only place in the world where you can run an international bank with access to the U.S. dollar system, Fedwire, and U.S. infrastructure—without being subject to U.S. federal income tax.
Looking Ahead
These updates mark a turning point. Puerto Rico is no longer the “cheap and easy” option—it’s now a professionalized jurisdiction for serious operators. The best capitalized and best governed banks will remain. And as regulators continue to modernize and clean up the sector, Fedwire access is expected to expand, opening up even greater efficiency and global reach.
If you’re ready to acquire or start an IFE in Puerto Rico, now’s the time to act before the field narrows further.
Contact us at info@banklicense.pro to discuss how we can help you launch or acquire a fully compliant international bank in Puerto Rico.