Offshore banking license in the Commonwealth of Dominica
Offshore banking is a special branch of international commercial and private banking, which is structured as a special purpose vehicle and special rules apply for the management and operations of offshore banking company. There are few jurisdictions which offer feasible opportunity for start-up of offshore banking company. The Commonwealth of Dominica has comprehensive legislation and required infrastructure to become the corporate and regulatory domicile for transparent and solid businesses looking to leverage their existing and forthcoming commercial operations.
Government of Dominica promotes Dominica as a favorable destination for international investments, implementing development strategy for diversification of the economy and modernization of the island infrastructure. Dominica as the International Financial Centre has to offer following solutions for international clients and businesses:
- Economic Citizenship Program
- International Business Companies
- Offshore banking license
Offshore Banking License
Offshore banking license is a subject of regulation of Dominica Financial Services Unit, which is a part of Ministry of Finance. Financial Services Unit is responsible for granting, supervision and revocation of the licenses. Financial Services Unit also supervises other types of financial entities such as domestic and international commercial banks, credit unions, building societies, insurance and internet gambling companies.
Presently there are 8 offshore banks registered in Dominica: http://fsu.gov.dm/index.php/registered-entities/offshore-banks
Offshore bank is typically a financial institution which is registered and licensed in the international financial centre and allowed to accept deposits and perform various transactions for clients domiciled abroad. Unlike domestic commercial banks, offshore bank normally renders services to international clients or corporations and does not offer day-to-day banking products.
Main areas of the offshore banking:
- Tailor-made investment solutions for HNWI
- Real Estate and Trade Finance
- Facilitation of e-commerce and custom-made payments solutions
- Leverage on fund-raising capabilities for high-value development projects
Applying for offshore banking license
Process of the application for offshore banking license in Dominica requires completion of the following steps:
1. Incorporation of local company in Commonwealth of Dominica pursuant to the Companies Act 1994 and seeking a permission of the regulator to use a word ‘Bank’ in the company name.
2. Preparation of business plan, which shall include the following:
- rationale for application
- identified economic needs which company intends to meet
- specific market area and growth prospects for next 5 years
- specific nature and source of financing for start-up and on-going operations
- organizational structure of company
- corporate chart showing clearly relationship of licensee to parent company, subsidiary, and other connected persons, where applicable
- operating cash flow projections with assumptions for the first five (5) years of business.
3. Disclosure forms and Questionnaires for all directors and the shareholders of the entity.
4. Documental evidences of source of funds and confirmation of soundness of financial position of the principals of the applying entity.
5. Proof of statutory minimum paid up capital – US $ 1.000,000.
6. Drafts of banking regulations such as Asset/Liability policy, Investment policy, Liquidity management etc.
7. Other statutory forms and affidavits.
Government of Dominica conducts enhanced due diligence on all applicants and all information submitted to the FSU will be verified via independent investigating and due diligence agencies. Such enhanced due diligence is the golden standard of the modern regulatory practice in the international financial centers, including Dominica.
Retaining the offshore banking license
Once the license is granted the bank shall commence the banking operations in 6 months and in order to retain the license is required to:
Have a representative office in Dominica.
Have an authorized agent and alternate authorized agent in Dominica.
Obtain the approval of the Minister for changes to the address of its principal office or in respect of its authorized agents.
Conduct business in a manner consistent with the interest of depositors and the public, and make adequate provision against loan defaulters, devaluation of currency and deposit losses.
Maintain paid up capital of at least US $ 1.000,000 or five percent of deposit liabilities or such other percentage as shall from time to time be fixed by order made by the Minister.
Maintain adequate liquidity by way of cash or marketable securities, including Treasury bills or any other convertible or time deposits with a maturity of less than twelve months, with an acceptable international bank amount to at least 12 percent of total asset or such other percentage as may be determined by the Minister by order.
Establish and maintain an accounting system to the satisfaction of the Minister.
Pay the prescribed annual license fee by 15th January each year.
Submit to the International Business Unit a statement of assets and liabilities and other specified accompanying reports for every quarter within thirty (30) days of the end of the quarter.
We will be glad to provide you with detailed explanation of the process of applying for the offshore banking license, calculate the budget and the timeline for your application as well as to expedite the process from the initial application to turn-key stage.
For all inquiries regarding getting and retaining offshore banking license, please contact us [email protected] or +1767 440 6709