In this post, I’ll look at the 10 steps necessary to start a bank in Puerto Rico. Banking licenses in Puerto Rico are by far the hottest offshore banking license for 2020 and are dominating the market. If you’re looking to form an international bank, look first at Puerto Rico.
When I say that the offshore bank license industry in Puerto Rico is hot, I mean that it is on fire. More banks are opening in Puerto Rico than in all of its competitors combined. Where markets like Cayman Island are contracting (some would say crashing), and Belize has not issued a license in years, Puerto Rico has 81 banks and 45 applications pending.
Fyi… I consider direct competitors to Puerto Rico to be countries like Dominica, Belize, Cayman Islands, BVI, Bahamas, Panama, Luxembourg, Andorra, Isle of Man, etc. Not larger jurisdictions such as the United States, Mexico, Switzerland, and the UK.
In this article, I’m talking about how to start a bank in Puerto Rico in 10 steps. That is, how to start a new bank, a de novo bank, in the US territory of Puerto Rico. There is also a strong demand to purchase a bank license. The number of buyers is much higher than the number of sellers, pushing the price of a bank license to $4 million to $10 million depending on transactional capabilities and not including a book of business.
Here are the 10 steps to start a new bank in Puerto Rico:
1. Apply for a Permit to Organize as an IFE in Puerto Rico,
2. Build out your office space in a building approved by regulators,
3. Hire a minimum of 4 employees, including a qualified compliance officer,
4. Purchase, implement and test your core banking system,
5. Negotiate a correspondent account and apply for your FedWire account,
6. Prepare your compliance manuals and training materials,
7. Finalize your website and marketing collateral,
8. Apply for and receive your Swift code,
9. Go through an audit and receive your Permit to Operate, and
10. Take the business live and begin onboarding clients.