Banking Licenses / Bank Charters
Among the products which FINOR-GROUP offers in building offshore structures are private banks. In some instances, more standard entities, such as IBC’s, cannot satisfy all of an individual’s offshore needs. The advantages which a bank can afford are quite distinct from those of corporations, trusts or even foundations. For the more sophisticated client, these unique benefits offer additional financial empowerment and freedom, privacy and favorable tax treatment.
Through a bank, you may access the international marketplace for your capital raising endeavors. Rather than secure capital personally for your projects, you may do so in an institutional capacity through your own personal bank and the deposits it receives. If you have a business currently in operation, your corporation can hold its assets in its own bank to secure additional privacy, rather than have the funds held in an unrelated depository. This arrangement will also facilitate money movements between subsidiaries of your corporation.
It is possible that the operation of the private bank could itself become a profit-center. Offshore banks may pursue investment activities from which on-shore banks are prohibited, such as underwriting. Additionally, you may utilize your offshore bank to provide captive insurance or real estate brokerage services.
Located in a jurisdiction outside your country, the activities which you conduct through your private bank will be more confidential and secure. You will be able to extend the same privacy to your clients, along with the other benefits you can offer, such as letters of credit to third parties. A final measure of security is that offshore banks in many jurisdictions offer confidentiality with respect to ownership.
From a tax perspective, bank profits are generally not taxable to the owners. Further, in some jurisdictions, there are treaties which make banking easier from a withholding tax perspective. Where there is a treaty in effect, there is little or no requirement of withholding.
Some people have awareness of the benefits of a private bank, but are intimidated because they feel that the required documentation could be cumbersome, or that there is greater risk associated with it. Compared with the stringent requirements of chartering an on-shore bank, it is not difficult to form and own an offshore bank.
We can establish a private bank for you for as little as US$50,000. If you feel that your offshore needs are complex enough to warrant the establishment of an offshore bank, then you should contact us for additional information.
A number of offshore jurisdictions have still the facility to grant banking licenses to qualified applicants. They offer some interesting possibilities because:
a) They will allow a bank to operate free of tax on profit and
b) It is possible to set up a bank without the need to maintain a physical presence within the jurisdiction other than that which can readily be provided by a service company.
Usually, banks will only be granted licenses if their place of incorporation, mind and management are within the same jurisdiction, or, in the case of a subsidiary, if the mind and management are located in the jurisdiction in which consolidated supervision is being exercised. In line with internationally accepted good practice in relation to bank license applications, the Licensing Authority should expect as a minimum to be satisfied that:
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the management has proven experience in a relevant field of banking;
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the controllers are fit and proper people to undertake the functions envisaged and that the ongoing management will be competent;
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the institution will conduct its business in a prudent fashion;
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the institution has devised an appropriate and sustainable business plan;
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adequate capital and other resources will be provided in relation to that business plan;
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direct confirmation has been received from the supervisory authority in the country in which the institution or its proposed parent is incorporated, that the authority;
- consents to the establishment of the institution in the host territory;
- will exercise consolidated supervision over the institution's overall activities, including within the host territory; and
- will cooperate in the sharing of regulatory information with the Licensing Authority
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the applicant will appoint approved auditors who will perform that work according to internationally accepted auditing standards.
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the applicant will disclose to the Licensing Authority all information that the latter legitimately needs to fulfil its overall supervisory responsibilities.
A prerequisite for the maintenance of sound banking standards is careful consideration of the financial standing, overall probity, skills and reputation of new banking applicants.
Some things you can do with your own offshore bank:
Set up your own banking instruments (e.g. bonds, securities &c).
These can be used in a variety of ways not to be covered in depth here due to space limitations. You may issue letters of credit for yourself, certificates of deposit, provided funds are indeed there (don't do it otherwise, as this would qualify for fraud in most jurisdictions!), letters of recommendation, etc.
Boost your corporate image by retaining your very own bank.
This can facilitate business no end: whether you are involved in import-export trade, in industrial manufacturing, in upmarket financial services, or simply want to impress your business associates and gain a cutting edge against your competitors – an offshore bank is probably the most powerful business tool money can buy.
Grant yourself constructive credit ratings.
Fed up with hopping around, currying favor with loan sharks and paying exorbitant sums to “credit repair” agencies that can't really do a thing for you anyway, except sing sweet, harmless odes to deaf ears? Why not do it the banks' way instead? With your own offshore bank, it's a totally new world to explore – grant yourself the credit rating you deserve and make good use of it in your other financial operations.
Grant your own loans and mortgages.
A nice way of legally funneling profits offshore and minimizing on taxes! Once you sign up, we will show you a unique insider strategy how to reduce your tax load and even say goodbye to taxes forever.
Seize your own assets before your creditors do.
Don't twiddle thumbs while the vultures are blithely hacking away at your life's work: with our insider strategy, you will be able to employ your bank to lay its hands (i.e. yours!) on your assets before anyone else does. Buy out your own debt for a song, stage your own “friendly self-takeover” and make exorbitant profits – absolutely legally, too, provided you know the proper way to do it!
SUMMARY
In summary, irrespective of the jurisdiction in which clients decide to proceed it will be necessary for them to produce:
- References from a leading bank, leading firm of lawyers and leading firm of accountants on each shareholder and each director.
- Police clearances.
- Evidence to satisfy the authorities that the shareholders/promoter(s) of the bank have substantial wealth and assets.
- A detailed business plan which outlines the type of business that the bank will undertake, the way in which that business will be handled by the bank and estimates of turnover for the first 3 years. This is perhaps the most important document.
- Evidence that the required minimum capital is available.
- Curriculum Vitaes on all directors and shareholders which should show some expertise in running a financial institution/bank. This is the minimum required documentation. The list is not necessarily exhaustive. As can be seen, some authorities will require that local directors be employed who are actually going to run the bank. In all jurisdictions it is always helpful if a local director who has banking expertise attaches his name to the application especially if the other directors are unable to show any relevant experience. We can provide such directors upon request.
Ultimately the choice of jurisdiction will depend largely on what business you wish to undertake in the name of the bank and whether or not you wish to set up a physical presence in the jurisdiction of incorporation.
We trust that the above is helpful but we would be pleased to provide whatever further information you may require.
More Information or Questions? Contact Us HERE
