Bank Licensing - Puerto Rico

About Puerto Rico

Puerto Rico issued Act 273, which established foreign financial entities and an associated international banking licence. Given its Caribbean location and recent economic woes, the Puerto Rican government has sought to implement legislation to stimulate the development of an offshore financial services centre.

Despite the fact that it is not strictly “offshore,” Puerto Rico is an ideal location for the formation of an international offshore bank. With a favourable tax rate of 4% on profits and easy access to the US financial system, Puerto Rico’s International Financial Entity licence grants its holder extensive banking authority.

Puerto Rico is located on the continent of North America, between the Caribbean Sea and the North Atlantic Ocean. It’s east of the Dominican Republic and west of the Virgin Islands.

Puerto Rico’s current population in 2023 is 3,260,314, a 0.24% growth from 2022. Puerto Rico’s population in 2022 was 3,252,407, a 0.11% decrease from 2021.

Spanish and English are two official languages in Puerto Rico today. Nonetheless, the Puerto Rican language is distinct as a result of previous waves of language modifications and cultural influences, resulting in a hybrid identity.

Puerto Rico inherited the common law system when it became a US territory. This resulted in a mixed legal system that combined common law and civil law. This system is still in use today. Civil law is used in areas such as family law, divorce, child custody, real estate law, and contractual law, among others.

1. Access to the U.S. Market

Puerto Rico is a US territory, hence banks with a Puerto Rican licence have access to the enormous US market without the requirement for separate federal licencing. This allows banks to operate in Puerto Rico while also doing business in the rest of the United States.

2. Regulatory Framework

The Office of the Commissioner of Financial Institutions (OCFI) oversees the financial regulatory environment in Puerto Rico. The regulatory framework attempts to safeguard the financial sector’s stability and integrity while adhering to US regulatory requirements.

3. Tax Incentives

Puerto Rico provides financial institutions with appealing tax breaks. Under the Puerto Rico Incentives Code, qualifying banks may be eligible for reduced tax rates, exemptions, and other tax incentives, which contribute to improved profitability.

4. Economic Incentives

In addition to tax breaks, Puerto Rico provides a variety of economic incentives to encourage investment and growth. These incentives may include grants, subsidies, and specific economic development programmes that favour regional banks.

5. Financial Services Centre

Puerto Rico is establishing itself as a regional financial services centre, drawing foreign investors and organisations. Being a member of this expanding ecosystem can provide possibilities for networking, prospective collaborations, and access to a varied range of financial services experts.

6. Geographic Location

Puerto Rico’s advantageous Caribbean location puts it close to both North and South America. This can be beneficial for banks looking to enter regional markets and conduct cross-border transactions.

7. Cultural Affinity

Puerto Rico has cultural and linguistic ties to the United States, making it easier to create and maintain partnerships with clients and enterprises situated in the United States.

8. Stability and Infrastructure

Puerto Rico has a developed infrastructure equivalent to the mainland United States. This includes a dependable judicial system, cutting-edge telecommunications, cutting-edge banking facilities, and access to qualified specialists.

9. Local Market Opportunities

Banks in Puerto Rico can serve the local people, businesses, and government agencies in addition to the larger US market. This may open up possibilities for retail banking, business banking, and financing efforts in Puerto Rico.


License: International Financial Entity
Timeframe for Approval: 4 to 5 months
Regulator: The Office of the Commissioner of Financial Institutions of Puerto Rico

Company Structure

Local Director: Required
Local Shareholder: Required
Local Registered Office: Required
Local Staff: Required
Compliance Officer: Required
AML/KYC: Required
Audit: Required
Economic Substance: Required
Corporate Tax Rate: 18.5%
Currency: U.S. Dollar
Minimum Paid-up Capital: US$250,000
Capital Requirement: US$550,000
Tax Structure: Approx. 4% Percent Tax on Offshore Profits
  1. Setting up the banking entity
  2. Meeting the local substance requirements
  3. Preparing the legal documents
  4. Applying for the correspondent bank account
  5. Applying for the operative Puerto Rico banking license/permit
  6. Applying for the SWIFT/BIC
  • Formation of Puerto Rican subsidiary business corporation
  • Preparation and drafting of shareholder and officer agreements, narrative business plan, current financial statements, and personal financial statements (for owners)
  • Gather five-year financial projections
  • Identification and draft letters naming principal representative and auditor
  • Prepare and draft the required bank charter and prospectus, as well as application with the Puerto Rico Commissioner of Financial Institutions
  • Develop responses to OCIF application inquiries
  • Facilitate and consummate a bank-card relationship with Visa and Mastercard
  • Draft policy agreements and related documents
  • Facilitate and consummate IBAN/SWIFT and correspondent bank relationships
  • Organize required physical presence and a local director
  • Preparation and review of bank deposits, loans, and related agreements

Documents required by all involved individuals

(including but not limited to directors, shareholders and beneficial owners)

  • Passport copy (Notarised)
  • Utility Bill issued within the last 3 months (Notarised)
  • CV or Resume for each involved individual
  • Two professional reference letters
  • Qualifications (Notarised)
  • Business Plan
  • Statements Of Physical Presence
  • Statement Of Financial Relationships
  • Declaration Of Legal Representative
  • Statement On Bank’s Proposed Online Presence
  • Marketing Material Disclosure

For Corporate Shareholders

  • Articles of Association in English
  • Registered office address documents (Notarised)
  • Company Register of director/s
  • Company Register of UBOs (shareholder register, or incumbency certificate, or share certificates)
  1. Formation of operating subsidiary in licensing jurisdiction.
  2. Preparation and drafting of shareholder and officer agreements.
  3. Preparation and drafting of narrative business plan.
  4. Prepare five year financial projections.
  5. Preparation and drafting of current financial statements
  6. Preparation and drafting of personal financial statements for owners.
  7. Identification and draft letters naming principal representative and auditor.
  8. Draft and prepare required bank charter and prospectus
  9. Preparation and drafting application with relevant regulatory authority
  10. Respond and draft responses to regulatory authority application inquiries.
  11. Facilitate and consummate bankcard relationship with Visa & Mastercard
  12. Preparation and drafting of policy agreements and related documents.
  13. Facilitate and consummate IBAN and correspondent bank relationship
  14. Provide for required physical presence and local director
  15. Preparation and review of bank deposit, loan and related agreement