In 2012 Puerto Rico replaced the long-existent Act 52, which was first adopted to allow international banking to compete with the offshore banking centers in the Caribbean, with Act 273, whose objective was to improve the conditions for conducting international banking in the country. Act 273 authorizes International Financial Entities to engage in traditional banking and financial transactions with non-residents of Puerto Rico. The country’s Office of the Commissioner of Financial Institutions (OCFI) is the entity responsible to license International Financial Entities (IFE) to conduct specified financial transactions.

Puerto Rico Offshore Banking License Key Features

With an IFE License you can:

  1. Accept deposits and borrow money from non-residents of Puerto Rico and certain government institutions.
  2. Place deposits in any Puerto Rican bank and foreign banks organized in Puerto Rico.
  3. Make loans and issue letters of credit to non-residents of Puerto Rico.
  4. Discount money orders and bills of exchange to non-Puerto Rican residents.
  5. Invest in securities and stocks, as well as Puerto Rican government bonds exempt from tax.
  6. Carry transactions in any currency and gold or silver and foreign currency trade.
  7. Underwrite and trade notes and debt instruments issued by non-Puerto Rican residents.
  8. Engage in trade financing of import and export of raw materials and finished goods.
  9. Acquire and lease personal property on behalf of non-Puerto Rican residents.
  10. Establish branches outside Puerto Rico in the continental USA or in other foreign country.

Puerto Rico Offshore Banking License Legal Requirements

Requirements

Description

General

  • Corporate  vehicle permitted

Puerto Rico Domestic Company

  • License application fee

USD 5,000

  • Local physical office required

Yes

  • Financial Guarantees

USD 300,000

Share capital or equivalent

  • Authorized Capital

USD 5,000,000

  • Minimum paid up capital

USD  2,000,000

Employees

  • Minimum number

3

Shareholders

  • Minimum number

2

  • Corporate shareholder allowed

Yes

  • Local shareholder required

No

Puerto Rico Offshore Banking License Tax Treatment

  1. A fixed 4% Puerto Rican income tax rate in the net income, increased up 10% at renewal.
  2. Full property and municipal license tax exemptions.
  3. 6% income tax rate on distributions to Puerto Rican resident shareholders.
  4. 0% tax rate on distributions to non-Puerto Rican resident shareholders.

Duration for set up

Around 6 months

Puerto Rico Offshore Banking License Distinctive Benefits

  • 0% tax rate on distributions to non-Puerto Rican resident shareholders.
  • Full property and municipal license tax exemptions.
  • Favourable regulatory environment coupled by a dynamic and pro-business Central Bank.
  • Excellent pool of facilities, banking service providers and communication infrastructure.

The Valsen Advantage

  1. End to end comprehensive service
  2. Speedy and efficient service
  3. Expert advice on structuring options
  4. Dedicated ongoing compliance support
  5. Extensive network pool of service providers