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.
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.
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.
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.
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.
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.
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.
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.
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.
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|
|Local Registered Office:||Required|
|Corporate Tax Rate:||18.5%|
|Minimum Paid-up Capital:||US$250,000|
|Tax Structure:||Approx. 4% Percent Tax on Offshore Profits|
(including but not limited to directors, shareholders and beneficial owners)