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HOW TO START AN OFFSHORE BANK

Financial Licensing Advisors (FLA) is the undisputed leader in banking licensing services, offshore jurisdictions and relevant licensing services.

We routinely license offshore banks in the Caribbean. Authorities and financial institutions recognize Financial Licensing Advisors as the financial licensing leader in the international banking industry. We do not structure bank-type vehicles but, rather, fully licensed and supervised banks.

“A bank is the pinnacle of capitalism and business. Start a bank, and you will start having control of the financial system.”

“Starting a bank is and has always been the most ambitious strategic step in any high-net-worth group or any financial institution.”

Whether you have decided to enter the financial markets directly as part of your integral business plan, are a smaller financial institution that has outgrown your licensing boundaries, or are experiencing operational inefficiencies or restrictions with your current financial license, you are likely wondering how to move forward and start an offshore bank.

Starting an offshore bank or applying for an offshore banking license is almost always the right option. When you start a bank, your financial company will have an almost limitless array of possibilities to take advantage of in jurisdictions where tax regulation is less strict.

Financial companies in different situations (including FX, wealth managers, family offices, IB, M&As, FAs, IAs, payment processors, or fund managers) will at some point in their lifecycles find it necessary or desirable to grow beyond their current licensing limitations in offshore jurisdictions. For many such businesses, the natural way to move forward is to obtain or apply for an offshore bank license or register a new offshore bank from the ground up.

You will need to understand the specific requirements to start your own offshore bank by complying with any requirements regarding applying for a new offshore banking license.

This is a brief guide on what is required in major offshore jurisdictions for a Type A or Type B licensed bank.

Starting an offshore bank with Financial Licensing Advisors is a simple process, as we offer a complete licensing, setup, and initial operation solution.

Among our various tasks we will provide you with staff management, business plan design, operation, supervision, establishment of locations, intermediary account setup and management, reporting, auditing, core banking services, and myriad outsourcing solutions for offshore banks.

We will structure and execute all the work, including the organization of legal document preparation, the recording and filing of all relevant requirements, and the holding of multiple meetings with the relevant regulator and actors.

Starting an offshore bank begins with the application for a new offshore banking license. This procedure will often take three to 18 months depending on the jurisdiction. This lead time also greatly depends on the current situation of your financial company or your business plan. If requested, Financial Licensing Advisors will handle all the relevant startup and registration procedures, thereby speeding up this process.

Throughout our years as a banking licensing advisor, we’ve encountered a lot of misleading information about banking licenses, offshore banking services, and the creative alternatives that the market provides. Prospective offshore bankers must be aware that these jurisdictions often lack clear information about specific licenses. The offshore banking community is not open to new players within the sector, and there are no shortcuts when one is licensing or starting a new offshore bank. The process requires strict compliance with applicable regulations, and is expensive and time-consuming. We aim to provide clients with a long-term solution, and we are interested in creating a long-term relationship with them. We are getting you not only licensed but in full operation. We will cover you every step of the way.

How to start an offshore bank

Applying for an offshore bank license is very similar to an onshore bank procedure. It requires that you have the adequate capital as prescribed in applicable regulations. Prospective bankers should understand that without capitalization, applying for a bank license has no useful objective.

We are the best-recognized specialist performing financial licensing services for clients worldwide on a recurrent basis. We understand specifics that perhaps other specialists are not aware of. We will provide solutions to any problems and will diagnose your current situation by working with you to achieve your specific goals.

 

The process starts with a diagnostic of your specific situation, followed by the furnishing of all specific requirements to start the bank. A master business plan will be developed hand in hand with you. Several additional services that are part of the bank-in-a-box solution will be included in the process. These are relevant licensing services that we routinely provide to international clients.

We will also liaise with all relevant regulatory authorities, as starting a bank often requires understanding and screening the political scenario in the prospective jurisdiction and reviewing any relevant financial services in the prospective banking sector.

The requirements to start an offshore bank are as follows:

Aside from the initial costs for the setup and for our services, requirements vary greatly depending on the prospective jurisdiction. Commonly, you will require at least the following:

  • A minimum of two partners and a solid management team with an impeccable track record and without a history of bankruptcy, money laundering, fraud, or related issues.

  • Senior directive staff with extensive banking experience and general experience in the financial sector. Over 10 years of experience is required (20+ desired)*.

  • Appointment of a compliance officer and a risk management officer, among other key individuals.

  • Setup of a local office in the jurisdictions where you are applying.

  • Directive staff with relevant experience (typically have an MBA or similar qualification from an international renowned institution).

  • All Directors and shareholders will be required by law to submit to a full background check and audit conducted by an external auditing firm.

  • An initial business plan submitted with the application.

  • Initial paid-up capital requirement 1

  • Extensive experience among all first- and second-level managers and directors.

  • Reporting backend banking software implementation.

1. Depending on the jurisdiction, bankers and shareholders will be required to be liquid at the time of the application. Paid-up capital requirements vary greatly depending on the applicable regulations. (As of this year, requirements were from €950,000 to €28.5M in the Caribbean region.) All beneficial owners will be audited and screened by the financial regulator before the regulator approves the submission.

Sometimes, specialized staff must be compliant with specific regulatory provisions in the jurisdiction where you are applying. In such cases, Financial Licensing Advisors can assist you with qualified staff or directors locally or internationally who will satisfy those specific requirements. All human resources whom Financial Licensing Advisors provides are prescreened for each specific task and have been performing these tasks. Each jurisdiction will have different requirements in terms of authorizing the initial application for the license.

If necessary, Financial Licensing Advisors will provide you with a complete turnkey solution. When you are in need, we will be able to outsource specific requirements established by the authorities.

Prospective bankers that are registering an offshore bank should note that although Financial Licensing Advisors is able to provide out-of-the-box solutions and will help you every step of the way, we are unable to provide you with capitalization. By definition, opening a bank requires liquid capital. You should note that one of the main items that will be evaluated during the initial stages is the liquidity of the beneficial owners and how that liquidity falls into the business plan submitted for approval.

Because licensing is such a complex topic, you must talk to a specialist that will review your situation and provide specifics on your banking needs. Email us at info@bankinglicensing.com or contact us with additional questions.

Contact Us

It’s a pleasure having you here,

Please contact us at: info@bankinglicensing.com
King Palace Plaza 55 King Yip Street Suite C8F, Kwun Tong Kowloon, Hong Kong.
International Services Center
Tel. +1888 8892865

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