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Bermuda to Become the Top International Bank License in 2024

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Bermuda to Become the Top International Bank License in 2024

Posted by: Christian Reeves
Category: Bank Holding Company, Bermuda, Business Plan, Business Planning, International Bank License, Offshore Bank License
starting an international bank in Bermuda

The government of Bermuda is working hard to increase its market share in the crypto, fintech, and international banking sectors. Now is an excellent time to apply for a new banking licensee in the country of Bermuda. 

As of this writing, there has been one international bank approved (Jewel) and the world’s largest crypto exchange received a license this week (Coinbase on April 20, 2023). Next week, the Premier of Bermuda will be in the United States meeting with companies considering a move to the island. 

While the international banking industry has been dominated by Puerto Rico since 2014, Bermuda is poised to take significant market share in the coming years. As they search for quality candidates to put them on the map and in the game, as they did with Coinbase, now is the time to apply for a banking license in Bermuda. 

Example in Bermuda

Bermuda is a top choice for an international banking license for several reasons:

  • Reputation: Bermuda is a reputable offshore financial center with a well-regulated and stable financial system. It is considered one of the world’s leading offshore financial centers and is a member of the Financial Action Task Force (FATF), which sets global standards for combating money laundering and terrorism financing.
  • Taxation: Bermuda has a tax-neutral environment, which means that there are no income or corporate taxes levied on international banks that operate within its jurisdiction.
  • Access to International Markets: Bermuda provides international banks with access to a broad range of international markets, including North America, Europe, and Asia.
  • Regulatory Environment: Bermuda has a well-developed and sophisticated regulatory environment that is overseen by the Bermuda Monetary Authority (BMA). The BMA is responsible for ensuring that all international banks operating within Bermuda’s jurisdiction comply with international banking regulations and standards.
  • Location: Bermuda is strategically located in the Atlantic Ocean, making it an ideal location for international banks looking to operate in both the North American and European markets.
  • License Type: Bermuda is using its domestic banking license law and allowing international transactions. As a “full” banking license, rather than an offshore license, you will find it much easier to open correspondent accounts. 

Applicants should have a minimum of $10 million in capital available, plus $1 million for startup expenses. 

Process to Apply for a Banking License in Bermuda

In order to apply for a bank license in Bermuda, you must follow the regulatory framework established by the Bermuda Monetary Authority (BMA), the primary financial regulatory authority in the country. While the specific requirements may change over time, the general process is outlined below:

Research and preparation:

1. Familiarize yourself with the regulatory environment, relevant laws, and regulations governing the banking sector in Bermuda. Key legislation includes the Banks and Deposit Companies Act 1999 and the various policies and guidelines issued by the BMA.

Develop a business plan:

2. Create a detailed business plan outlining your bank’s proposed operations, target market, organizational structure, risk management policies, and financial projections. The business plan should demonstrate the bank’s viability, management expertise, and ability to comply with regulatory requirements.

Incorporate a company in Bermuda:

3. Incorporate a local company under the Companies Act 1981. The company must have a physical presence in Bermuda and should meet any specific requirements set by the BMA, such as minimum capital requirements and a certain number of resident directors.

Prepare application materials:

4. Gather all the required documentation, which generally includes:

  • A completed application form provided by the BMA
  • The proposed bank’s Memorandum and Articles of Association
  • A detailed business plan
  • Information on the proposed bank’s ownership structure and beneficial owners
  • Personal declaration forms for each significant shareholder, director, and senior officer
  • Financial statements and projections for the first three years of operation
  • Evidence of capital resources, including the source of funds
  • Details of the proposed bank’s risk management policies and procedures
  • Information on the bank’s IT systems and security measures
  • Any other information or documentation requested by the BMA

Submit the application:

5. Submit the completed application form, along with all required supporting documents and the relevant application fee, to the BMA.

Application review and assessment:

6. The BMA will review your application and assess its compliance with relevant regulations, guidelines, and industry best practices. This process may involve discussions, clarifications, or additional information requests. The BMA will consider factors such as the bank’s financial soundness, management competence, corporate governance, risk management, and anti-money laundering and anti-terrorist financing measures.

Licensing decision:

7. After completing the assessment, the BMA will make a decision on whether to grant a banking license. This process may take several months, depending on the complexity of the application. If approved, you will be issued a banking license subject to certain conditions, such as maintaining minimum capital requirements and ongoing reporting obligations.

Ongoing compliance and supervision:

8. Once licensed, your bank will be subject to ongoing supervision and regulatory compliance requirements. This may include regular reporting, on-site examinations, and adherence to any changes in regulations or guidelines issued by the BMA.

We have been working in the international banking sector since 2004 and can assist you with all facets of your license in Bermuda, from Business plan to approval to core systems to opening your doors. For more information, please contact us at info@banklicense.pro