RSSThe procedure for incorporation of an offshore bank varies according to the jurisdiction. Most of the jurisdictions follow the usual English law registration system for the incorporation of an offshore bank.
Applications
An application for a permit needs to be lodged with an application for an offshore bank or financial institution license. The information accompanying the license applications must be in accordance with the specification of the offshore bank guidelines. If the application satisfies the guidelines then a license may be issued promptly. The application is a confidential document and may be subject to the secrecy provisions of the relevant corporate legislation.
Bank Preferences
Banks with an international standing are preferred and are more likely to acquire offshore banking licenses in any jurisdiction in the world. However, even large Eastern European banks may face some difficulties. Large, medium or small sized banks, non-banking companies and even individuals are eligible for an offshore banking license in more liberal jurisdictions like Nauru and Vanuatu in the South Pacific.
Documents
Usually recommendations from other banks, as well as lawyers and auditors are required to register an offshore bank. Proof of the applicants' solvency and, in some cases, business plan of proposed offshore bank is required.
Offices
An offshore bank must have a registered office, minimum number of Directors and shareholders. A Registered Agent is a must in all offshore banking locations. Management and the accounting department are usually located in the place of the owners' domicile. In some offshore banking locations the management of the offshore bank must actually be located within the jurisdiction.
Management
An offshore bank is generally managed through its representatives around the world. The banking activities and contacts with partners and clients is usually maintained through these representations. The management and administration of the offshore bank should not be conducted within the domestic jurisdictions of the corporate group. Care must be taken to ensure that offshore deposit-taking activities do not breach domestic banking laws. If too many of the management activities of the offshore bank are affected in the domestic locations, the offshore bank may be considered to be carrying on business through a branch office. This in turn might have a negative effect under both tax and banking legislation. The management functions thus are ideally carried out best by the offshore bank.
The offshore bank can either employ its own permanent staff or base them in the offshore location or in another suitable management location. Alternatively it can engage the services of a local trust company or professional management firm who would work closely with the management of the corporate group.
The latter is a more popular alternative. Though in the former case, the appointment of local management in the offshore location avoids potential complications with tax and banking authorities in the domestic jurisdictions.
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