The most active low cost offshore bank license jurisdiction is Dominica. If you’re in the process of selecting a country to incorporate and license an offshore bank, give the Caribbean Island of Dominica a look.
You’ll find that the capital required for a bank license in Dominica is a fraction of it’s competitors. You will also find that the government and regulators want you to succeed… that they’ll work with you to build your brand and your bank… the opposite of what you’ll experience in competing financial centers like Belize, Panama and Cayman.
- This article is about Dominica, one of the Windward Islands, the southern group of the Lesser Antilles in the West Indies, and a leader in the financial services industry. Please don’t confuse Dominica with the Dominican Republic.
An offshore bank license from Dominica will allow you to offer all manner of banking services. This includes deposit taking, wealth management, lending, credit cards, secured cards, debit cards, certificates of deposits, tax and business planning, currency exchange, and correspondent banking services.
The only limitation on an offshore bank licensed in Dominica is that it’s prohibited from offering services to locals. You may not sell banking services to residents or citizens of Dominica.
An offshore bank in Dominica might also offer company formation, asset protection structures, business and tax planning, tax efficient loans for corporations holding retained earnings in your bank, and wealth management. By maximizing the tax and privacy benefits of Dominica, you might leverage an offshore bank license several fold.
As an enticement to bring jobs and grow the financial sector, you (the owner of an offshore bank in Dominica) may qualify for a second passport or citizenship in the country. Shareholder can apply for immediate citizenship and a second passport. In most cases, the cost will be $130,000 to $180,000 for a single applicant.
An offshore banking license from Dominica has the lowest capital requirement of any offshore jurisdiction. While Belize and others are demanding $5 million, Dominica will allow you to license a bank with only $1 million in capital.
With $1 million in capital, you will get your bank license. You’ll then need to search out a correspondent banking partner. It will be challenging to find such a partner for a small bank with minimal capitalization. Thus, many apply for the license with $1 million and then raise more money after the provisional license is granted.
Technically, the lowest capital requirement is the U.S. territory of Puerto Rico. That bank license can be had with $550,000 in capital. While Puerto Rico is “offshore” for tax purposes, it’s “onshore” for other Federal agencies.
Dominica is also the lowest cost license to procure. In fact, the cost of Dominica is a fraction of competitors such as Cayman and Belize. Assuming you have a business plan and a board of directors in place, a bank license from Dominica should cost around $100,000, including government and legal fees.
- This estimate does not include due diligence fees on shareholders and directors. These will vary greatly depending on your country of citizenship. The typical range is $3,000 to $10,000 per person. The average is $7,500 for the primary applicant.
This would compare to $300,000+ in the Cayman Islands. The annual license fee alone in Cayman is about $85,000 compared to only $8,000 in Dominica and $5,000 in Puerto Rico.
In Cayman and Dominica, licensed banks are exempt from tax on their net income. The tax rate in Puerto Rico is 4% if you have at least 5 employees in the territory. If you don’t qualify for the Puerto Rico tax holiday, income will be taxed at about 35%.
Your offshore bank in Dominica will require an office, registered agent, and employees on the island. Compliance (FATCA, OECD, DAC, AML, etc.), account openings, information technology and security, and some basic services should be provided in Dominica.
It will be possible to manage bank assets outside of Dominica. For example, you might form a Financial Services Company in Panama as the management agent. This will allow you to work around some of the correspondent banking issues and manage client capital in a larger jurisdiction.
The typical annual fee for a registered agent in Dominica is $10,000. They will be your liaison to the government, agent for service, and local representative of the bank on the island.
In addition to the agent, employees, and office overhead, you will need to retain an audit and accounting firm to prepare quarterly reports to the government. The average cost of these services is $20,000, though fees vary widely from provider to provider.
The final major expense will be your banking software. We recommend Mobile Earth and
Temenos T24 Retail Banking Software Systems for Dominica. I won’t estimate prices here because of the variety of configurations available. Feel free to contact them directly for a quote.
Because of our long history and relationships on Dominica, we offer a turn-key offshore bank license in this jurisdiction. Everything required to be up and running in 3 to 6 months: government negotiations, board of directors, business plan, financial projections, office space, employees, etc.
If you’re considering forming an offshore bank, I suggest you take a look at Dominica. It’s the lowest cost and most efficient jurisdiction actively issuing licenses.
I hope you’ve found this article on how to get an offshore bank license in Dominica to be helpful. Please contact me at firstname.lastname@example.org or call (619) 483-1708 for a confidential consultation on incorporating an international bank.
For more information on offshore banking licenses, please review my articles below.
- Lowest Cost Offshore Bank License is Puerto Rico
- Best Offshore Banking Jurisdictions
- Offshore Bank Advertising Rules (a review of Reg. S)
- Offshore Banking Licenses (on lowtax.net)
- Capital Reserve Requirements (on lowtax.net)
- Correspondent Accounts for Offshore Banks (on escapeartist.com)
- Bank Licenses from Gambia are a Scam (on escapeartist.com)