In this post, I will consider the offshore banking regulations in St. Lucia. It is under these processes which you can negotiate an international banking license on St. Lucia and operate as an offshore bank.
Note that this article covers banks under the international banking statutes, which means that they can only accept clients from outside of St Lucia. Domestic banking statutes are a topic for another day.
Because of its proximity to the United States, warm climate, and lower cost international banking license, the Caribbean has been a major hot spot for banking investors and financial institutions as a place to operate from.
Even though they might seem pretty similar, each country has a different process in which to obtain a banking license. Also, every country has different banking regulations that regulate banking activities on the island.
St. Lucia offers two types of bank licenses, a Class A international banking license and a Class B offshore banking license. Both of these bank licenses are regulated by the Financial Services Regulatory Authority in St. Lucia.
A Class A Bank License allows you to do business with all types of clients excluding residents of St. Lucia. A Class B Bank License is more restrictive in that it allows you to do business with a pre-approved list by local authorities that do not exceed 10 clients. A Class b offshore banking license is commonly referred to as a captive banking license.
The minimum capital requirements also vary between the two licenses. For Class A you must maintain a fully paid-up capital of $1,000,000. While Class B requires a fully paid-up capital of $250,000.
Some of the basic requirements that you will have to meet in order to start doing business on the island include:
– Pay the application fee
– Due Diligence regarding all officers, directors, shareholders, an key persons
– Detailed business plan
– References from other financial institutions
– Information regarding assets and bank statements
– Compliance Information
Just like all the other jurisdictions in the Caribbean, you will find that the main concern of the government falls on Anti-Terrorism and Money Laundering. St. Lucia’s banking regulator is working hard to strengthen the island’s AML and KYC regulations to match those of top tier jurisdictions.
Another regulatory framework that you are going to have to learn almost verbatim is the International Banks Act. The International Banks Act is the institution responsible for regulating the operation of international banks doing business from St. Lucia.
Everything that you need to know about the process to apply for a banking license in the country you will find under these guidelines. Remember to comply with all the documents they ask of you and to update your business plan based on laws that might be changing periodically.
Both the International Banks Act and the Financial Services Regulatory Authority are linked so many times when you are doing a banking activity on the island you must check under whose authority it falls, sometimes both of these regulations will have a say on the banking activity you wish to realize.
Even though these regulations can be strict and restrictive, the approval of the banking license and the limitations that are put forth are based on only two matters. How you incorporate the company and the capitalization of the bank or financial institution.
I mention these two regulations because they are the most common, but there are over 50 guidelines on how to operate your bank or financial institution in the country. These two are just more relevant.
In my experience working with banking regulations in the Caribbean, as long as you don’t do business with someone who is laundering money or you don’t hire the number of people necessary you should be fine. Still, I would highly advise you to hire a lawyer to take care of your banking activities.
Luckily for foreign investors, St. Lucia has a number of registered agents that will help you open your international bank without any problems. At this moment there are 15 registered agents on the island.
Besides the relaxed banking laws and the tropical climate, there are other incentives to the island. Strong telecommunications infrastructure, ease of international accessibility, with Saint Lucia offering two airports, and a well-educated workforce drawn from the population of approximately 170,000.