Capital Requirements for a Banking License in Mexico

When applying for a new banking license, you must have a certain amount of capital. This article is on the capital requirements to apply for a banking license in Mexico. Note that this is the amount of cash you need to have to apply for the license. To operate the bank, you must maintain an 8.5% reserve and a 2.5% reserve in Mexico.

The amount of capital required for a banking license varies greatly from country to country. The lowest capital amount for a respected jurisdiction is the US territory of Puerto Rico. An international banking license in Puerto Rico required $550,000 in capital. $250,000 in paid-in capital and $300.000 in a CD held in a local bank.

In the Caribbean, most jurisdictions require $1 million to $5 million in capital. This is one of the reasons Puerto Rico issued 24 licenses last year and Caribbean financial centers issued 1 or 2 depending on the country.

For more information, you can read my 300 page Offshore Bank License Guide on Amazon Kindle.

Without any more adieu, here are the capital requirements for a banking license in Mexico.

A. A required minimum capital of $27.5 million USD for banks that carry out the following activities:

• Take deposits
• Take loans
• Issue debt
• Issue subordinated debt
• Make deposits in foreign financial institutions
• Grant loans and debt purchase transactions
• Act as guarantor
• Issue third party letters of credit
• Carry out transactions involving securities
• Issue convertible debt
• Carry out commercial transactions
• Trade gold, silver and foreign currency
• Offer security deposit boxes
• Issue letters of credit
• Act as trustee
• Offer escrow accounts
• Act as agent for bondholders
• Act as payment agent for security issuers
• Offer bookkeeping services
• Act as estate trustee
• Act as agent in a bankruptcy procedure
• Offer appraisals
• Purchase and sale of real estate for the bank´s use
• Leasing transactions
• Derivatives transactions
• Factoring transactions
• Offer payment mechanisms

B. A required minimum capital of $16.5 million USD for banks that carry out the following activities:

• Take deposits
• Take loans
• Issue debt
• Issue subordinated debt
• Make deposits in foreign financial institutions
• Grant loans and debt purchase transactions
• Act as guarantor
• Issue third party letters of credit
• Carry out commercial transactions
• Purchase and sale of real estate for the bank´s use
• Leasing transactions
• Derivatives transactions

C. A required minimum capital of $11 million USD for banks in the following categories:

I. Banks that carry out transactions only with Institutional Investors (as defined below), Qualified Investors (as defined below) or legal entities:

• Take deposits
• Take loans
• Issue subordinated debt
• Offer escrow accounts

II. Banks that carry out the following activities:

• Make deposits in foreign financial institutions
• Carry out transactions involving securities
• Issue convertible debt
• Carry out commercial transactions
• Trade gold, silver and foreign currency
• Act as trustee
• Act as agent for bondholders
• Act as payment agent for security issuers
• Offer bookkeeping services
• Act as estate trustee
• Act as agent in a bankruptcy procedure
• Offer appraisals
• Purchase and sale of real estate for the bank´s use
• Offer payment mechanisms for the bank´s use

III. Banks that carry out any of the following transactions with authorized payment mechanisms:

1. Transactions involving:

• Deposits
• Loans
• Deposits in foreign financial institutions
• Grant loans and debt purchase transactions with other financial institutions
• Transactions involving government or bank bonds
• Transactions with foreign currency:
• Commercial transactions
• Trade gold, silver and foreign currency.

D. A required minimum capital of $27.5 million USD for banks that carry out a mix of the transactions listed above that does not fit in any of the aforementioned categories.

Definitions

Institutional Investor: Insurance companies, investment funds or pension funds.

Qualified Investor: Any person with annual investments in securities of $458,000 USD or with an annual income of $152,000 USD.

Conclusion

I hope you’ve found this article helpful. For more information on setting up an international bank, please contact me at info@premieroffshore.com or call us at (619) 483-1708.

You can also read my 300-page book on the topic on Amazon Kindle. Click here to go to Amazon’s site.