Puerto Rico Issues New Regulations for International Banking Entities
San Juan, Puerto Rico - The Puerto Rico Commissioner has announced new regulations governing the formation and operation of international banking entities (IBEs) on the island. These rules aim to ensure the stability and integrity of the financial system in Puerto Rico.
Formation and Operation of IBEs
To establish an IBE, individuals or entities must submit a written application to the Commissioner, accompanied by various documents and fees. The application process involves a thorough investigation into the applicant’s:
- Financial solvency
- Credit history
- Business experience
The Commissioner will review the proposed articles of incorporation, partnership agreement, or other relevant documents to ensure compliance with Puerto Rico law. Applicants must also provide information on their directors, officers, and anyone who intends to possess or control 10% or more of the entity’s capital.
Application Process and Fees
In addition to an application fee of $5,000, the Commissioner may require additional documentation and information. The investigation process will be conducted at the expense of the applicant, with the Commissioner having the authority to claim these expenses from the applicant.
Permit to Organize an IBE
If the investigation is deemed favorable, the Commissioner may issue a permit to organize an IBE, subject to certain conditions. Once issued, the permit holder must file the necessary documents with the Department of State and obtain a certification from the Department.
License Requirements for Operation
To operate an IBE in Puerto Rico, applicants will need to obtain a license from the Commissioner. The annual license fee is $5,000, which must be paid within 15 days of each anniversary date of the original license issuance. Applicants must also provide:
- Certified copies of their articles of incorporation and bylaws
- Evidence that the entity’s capital has been subscribed, issued, and paid in
The Commissioner may deny a license if they believe the applicant has violated any provision of the law or regulations. Denied applicants may request a hearing under the provisions of Section 21 of the Act.
Objectives of the New Regulations
The new regulations aim to promote the development of international banking entities on the island while ensuring the stability and integrity of Puerto Rico’s financial system.