International Bank License Jurisdictions
The world of international bank licenses has gone through major changes over the last three years. One jurisdiction has emerged as the clear favorite, while every other country is losing licenses. That is to say, every offshore banking license jurisdiction has seen contraction and consolidations except one.
Most of these bank closings are due to the higher cost of compliance and the inability to maintain a USD correspondent account. It has become too costly to operate a small bank in all international bank license jurisdictions except one.
Cayman Islands
For example, the Cayman Islands was the gold standard in international bank licenses for decades. This is the first country that comes to mind when we talk about offshore accounts and is the jurisdiction most often featured in movies.
The Cayman Islands went from 400 international banks in 2001, to 207 in 2012, and 123 international banks in 2019. As of the first quarter of 2025, there are 79 licensed international banks (Class B branches/subsidiaries of foreign banks) operating in the Cayman Islands—these are distinct from the domestic or retail (Class A) banks. Unlike Puerto Rico, the Cayman Islands is pushing out its offshore banks. Note that Class A banks are local and domestic banks that serve the residents of the Cayman Islands. Class B banks are international banks that offer accounts to people outside of the Cayman Islands.

Per CIMA, foreign assets in Cayman have declined significantly, from about US $1.42 trillion at their peak in the mid‑2010s to approximately US $369 billion as of December 2023 (last official report). We estimate that assets are around $240 billion as of early 2025. As a result, the jurisdiction has dropped from being the world leader in cross‑border assets to now ranking 22nd as of 2023 and 35th as of 2025 in terms of asset value.
The same has occurred in most other offshore bank license jurisdictions. As of 2025, Dominica has 11 international banks holding licenses, but the number that are actually operating and have a correspondent banking partner is much smaller than this. None of the Class B banks licensed in this country have a correspondent partner at the time of this writing.
The only international banking jurisdiction that’s expanding is the US territory of Puerto Rico. As of 2025, this jurisdiction has 72 operating international banks (including IFEs and IBEs), plus 5 in the Permit to Organize stage and a number of new license applications pending.
Demand is also intense when a bank license comes on the market. International bank licenses from Puerto Rico. are selling for $4 to $5 million (just the paper, so a time to market purchase). Banks with a basic correspondent relationship sell for $5 to $7 million. Those with significant operations sell for significantly more, with the largest sale being $55 million plus paid in capital.
The top 5 reasons
Puerto Rico is so hot:
1
No CRS or FATCA reporting. The US territory the ONLY major jurisdiction with no FATCA or CRS requirement.
– FATCA doesn’t apply to the territory. Also, treaties, TIAs and information exchange agreements between US and foreign countries expressly exclude the territories. Puerto Rico is not permitted to sign on to CRS.
– Puerto Rico does not provide privacy for US persons. Puerto Rico is not a “foreign country,” and thus you do not need to file an FBAR or other FATCA forms such as 5471, etc.
2
Banks in Puerto Rico can join FedWire and SWIFT, as well as receive an ABA number. However, FDIC insurance is not required nor is it available in Puerto Rico.
– As a result, an international bank licensed in Puerto Rico can use the Federal Reserve as it’s correspondent bank.
Fedwire approval is a long process, so you will start out with a traditional correspondent partner. Then you can move to a FedWire account for sending and receiving transfers and holding your bank’s US dollars.
3
The relative ease of securing USD correspondent accounts compared to competing jurisdictions. Note I wrote “relative ease” and not ease. Securing a quality correspondent still requires capital and a lot of work.
– Challenges in compliance (from AML, KYC, CRS, and FATCA) and in maintaining a USD correspondent account are the primary reasons the industry is contracting. Ask any offshore banker her three main concerns or business risks and she’ll say, correspondent banking, correspondent banking and correspondent banking.
4
As of 2025, capital requirements are as follows: $10 million paid in capital, unencumbered assets (a CD in Puerto Rico) of $1 million, plus a startup budget of at least $1 million… though I recommend $2 million and to increase this base on your business model.
– Note that the above does not consider liquidity ratios which generally follow Fed or Basil II and III standards nor does it account for capital held by a correspondent. For more see: 12 CFR § 167.6, Risk-based capital credit risk-weight categories.
5
A 4% tax rate on ordinary income earned by the bank and a requirement to hire a minimum of 10 employees, with a focus on the Chief Compliance Officer and a top notch compliance department in Puerto Rico. US Federal income tax doesn’t apply in Puerto Rico. Dividends to non-US persons and companies are tax exempt and no withholding tax is taken.
With all of that said, Puerto Rico is not the right fit for everyone. If you want to minimize ties to the United States, then Puerto Rico is definitely not the offshore bank license jurisdiction for you. Of course, such a business mindset would also make it nearly impossible to get a USD correspondent account.