Are you looking for a jurisdiction where you can open a corporate bank account and enjoy high-quality services? Take a look at Puerto Rico. It has a really good financial sector that offers excellent banking services to non-resident companies, including offshore ones. In this post, we will take a look at the main opportunities and restrictions.
Opening an Account in Puerto Rico: Advantages for Non-Resident Companies
If you are an offshore company owner, setting up a non-resident account with a Puerto Rican bank will enable you to make seamless payments in US dollars without charges payable to correspondent banks.
If you establish a company in Puerto Rico and employ 5 or more locals, you will be entitled to considerable tax savings. If you consider the cost of doing business, salaries, and the cost of living in the country, you will find that they are much lower than in other low-tax destinations.
Keep in mind that the bankers in Puerto Rico prefer a personal acquaintance with their customers, so the majority of banks will refuse to open an account online. Still, you can find some banks that will onboard you remotely.
If you set up an account in Puerto Rico for investment purposes, you will be able to take advantage of attractive tax incentives. In addition, the financial institutions that will handle these investments will be entitled to a reduced tax rate as they are usually exempt from FATCA.
There are industries that are exempt from municipal, property, income, and other taxes in full or in part, including tourist activities, hotels, hospital facilities, agriculture, film, technology, recycling business, financial and insurance services, export services, manufacturing operations, research and development, and so on.
If confidentiality is a major concern for you, you may be happy to discover that the banking institutions in Puerto Rico do not collect information about their foreign customers except for the case when they are US residents.
Opening an Account: Restrictions
It is very easy for US residents to open an account with a Puerto Rican bank due to its close location. However, non-residents are welcome, too. As the country has a special status of an island state, its banks are not obliged to comply with international customer information exchange requirements.
If you are a foreigner who wishes to set up an account with a Puerto Rican bank, you need to clearly state the purpose of account opening. The examples include the provision of financial, brokerage, or trust services, or developing/expanding any business activities.
Keep in mind, though, that the country imposes certain restrictions by country and by the type of business activity. We recommend studying them carefully before you decide to submit an application.
Restrictions by activity
Foreign investments in Puerto Rico are subject to industry-specific regulations adopted by the federal government. For instance, if you have a banking institution/company, you’d better opt for another jurisdiction as these activities are not welcome here if they are conducted by foreigners.
Restrictions may also be applicable if a non-resident company is engaged in any business whose source of income looks doubtful. For instance, if your company deals with cryptocurrencies, you will be under scrutiny. It does not mean that the banks will deny the services to you in 100% of cases, but they will work with you only after you successfully pass a meticulous due diligence check. In any case, cooperation in such situations is agreed upon on a case-by-case basis.
Offshore companies are generally accepted by Puerto Rican banks without much hassle, but they want to check the beneficiary’s data first.
Restrictions by country
Puerto Rico relies on the restrictions imposed by the US federal government, so it cannot cooperate with certain countries. If the company does not fall under these limitations, it will be able to open an account in Puerto Rico no matter where it is incorporated. Offshore companies (those registered in Belize, Nevis, or Panama) are welcome, too.
Types of Corporate Accounts Available
The financial institutions in Puerto Rico provide various types of financial services, including issuing bank cards and traditional cash and settlement services. You can also deposit and sell securities. You can use the assistance of bank consultants to gain access to a depositary or conduct a portfolio spread.
Here is a list of services available to all customers:
- Cash withdrawal from a wide network of ATMs
- Support in the capacity of a trustee in securities transactions, agent, custodian, executor, registrar, or an ordinary trustee
- Help with trading in currency and precious metal bullions
- Maintenance of a multi-currency account
- Issuance of debit cards with an international status
- Postal services
You will have access to an online platform and a mobile app to manage your funds online.
Account Currency
Naturally, the main currency in Puerto Rican banks is the US dollar. However, you can also open a multicurrency account in major world currencies if you need to.
A non-resident company that wants to open an account with a Puerto Rican bank needs to make a minimum deposit and keep the balance at the minimum level of 500,000 US dollars.
Account Types
Puerto Rican banks offer the following kinds of accounts:
- Investment
- Trading
- Deposit
- Corporate multicurrency
- Corporate in USD
Bank Cards
You can get standard types of payment cards from Puerto Rican banks:
- Debit cards
- Credit cards
Rates
The service rates charged by the bank differ from institution to institution. We would like to give you an example of what they may look like:
- Service fee: 0.75% a month, but no less than 900 US dollars per quarter
- The account opening commission equals 5,000 US dollars
- Fiduciary account maintenance comes at 2%
- Postal services will cost 375 US dollars per quarter
- Mail forwarding to one address costs 30 US dollars
- Certification or audit service comes at 300 US dollars per certificate
- Provisions for external asset managers require 600 US dollars a month
- Internet banking costs 200 US dollars a month
- Debit card maintenance fee equals 250 US dollars per quarter (issuance costs excluded)
- Account closing fee is 0.25% per annum of the overall portfolio value (but no less than 2,500 US dollars)
- Currency exchange costs up to 2% (but no less than 200 US dollars) plus the cost of third-party services and transaction fees (up to 1%)
Interested in Puerto Rican banking? Please follow the link above for more detailed information or communication with an expert using an online chat (it’s free!).