In recent years the Caribbean has become a haven for foreign investors and corporations to open an offshore bank in many jurisdictions you can find here. In most cases, you can even get a tax incentive if you do so.
Still, there have been many problems associated with offshore banking in the Caribbean as many illicit activities have been detected and forced to stop. This tainted the Caribbean’s reputation in the offshore banking industry, but it has been making a comeback.
A country in the Caribbean that has been getting a ton of attention in the offshore banking industry as of late is St. Lucia. St. Lucia has one of the best regulations regarding their banking industry right now and is worth looking into as a major option for your offshore bank.
St. Lucia Offshore Banking. An international bank can be established in St. Lucia under the International Banks Act, Cap. 12.17. This is the legislation that governs the operation of international banks doing business from St. Lucia. The Act and regulations made thereunder, outline the requirements and procedure to be followed in applying for a license.
St. Lucia offers two types of international banking licenses, Class A and Class B. The Class A banking license is an offshore license that allows you to do business with persons and companies outside of St. Lucia.
With a Class B Baking License, you have to share the information and show the records on who you are doing business with to the Financial Service Regulatory Authority of St. Lucia. Class B Bank Licenses quite rare these days. They’re also referred to as Captive Banking Licenses.
To legally operate an international bank in Saint Lucia, a somewhat in-depth application process for a Saint Lucia International Banking Licence must be completed. Under Saint Lucia’s International Banks Act, an international bank can be established within Saint Lucia if certain requirements are fulfilled.
Just like all the other jurisdictions in the Caribbean and around the world, St. Lucia has regulations that mandate the minimum capital requirements necessary to obtain an international bank license.
For a Class A Bank License, the minimum capital requirement is $1,000,000. Besides this minimum capital requirement, you must also maintain a fixed deposit of $100,000 while the bank is operating.
The $100,000 is a CD or bond held at a local bank. If your offshore bank goes out of business, the government will seize this $100,000 to pay creditors.
You must prove that you have the $1,000,000 to fulfill the capital requirements, but it is more important to properly identify to the applicable authorities how you managed to obtain that amount.
Although the regulations state that you prove that you have the $1,000,000 dollars, I highly suggest you keep at least $5,000,000 to make it easier for yourself to attract a good correspondent banking partner.
A Class B Bank License requires a minimum capital of $250,000 and maintained a fixed deposit of $100,000 while the bank is operating. Because these licenses are rare, I won’t go into details here.
Some of the requirements that will be asked of you when you apply for this bank license are:
– Annual audits by an authorized auditor
– Two directors, one should be resident of St. Lucia
– Detailed Business Plan
– Application Fee paid
– Attorney legally allowed to practice law in St. Lucia
– Registered Agent
– Projected Financial Statements
Once you are given your license you must comply with the correspondent regulations to be in good faith within the country of St. Lucia. As opposed to other countries these regulations are not that strict, but must still be followed appropriately.
Actions that might cause your bank license to be removed include:
– Failure to respond or comply with the Director of the Financial Service Regulatory
Authority
– Accepting or offering a bribe
– Doing business with corporations or individuals doing illicit activities
– Caught doing business with residents of the island
Privacy has been a hot topic since what happened in the Cayman Islands and with the Panama Papers, so investors will be happy to know that St. Lucia is one of the best places for financial privacy out there.
There are several rules and regulations that have been specifically created for the safeguarding of information submitted to the authorities in St. Lucia. The shareholders of the corporation or the offshore bank are only known to the FSRA and the Registered Agent.
St. Lucia is one of the hidden gems of the offshore banking industry. Private, secure,
inexpensive, experienced workforce, central location, and many more things. Take a moment to consider St. Lucia as a viable option for your offshore bank or international financial entity.
It’s possible to combine St. Lucia’s second passport program with your banking license. You can set up a bank and then purchase citizenship on the island for about $250,000. Both St. Lucia and Dominica offer citizenship to investors but St. Lucia has a better travel document (passport).