International Bank License in St. Lucia

International Bank License in St. Lucia

One of the best jurisdictions for an international bank license is St. Lucia. In this post I’ll look at why you should consider forming an international bank in St. Lucia.

Let me start by pointing out that the top three offshore bank license jurisdictions in 2018 are St. Lucia, Dominica, and Puerto Rico. St. Lucia, and Dominica issue one or two license per year and Puerto Rico about 25. Because Puerto Rico is a US territory, those who don’t want to be to close to the United States should focus on Dominica and St. Lucia.

The country of St. Lucia offers two types of international banking license: the Class A License and the Class B License. To obtain both licenses you have to submit the same application, but it would be wise to review them to see which one is most convenient for you.

The Class A License is a basic banking license that permits the applicant to perform commercial banking activities and transactions with any business and individuals. The Class A License does have some restrictions, but it is pretty straightforward. This is a classic international bank license allowing you to do business with any person or company outside of St. Lucia.

The Class B License is a more complicated than the Class A. In a Class B banking license you need to show who you are doing business with to the FSRA. We won’t get into details on the Class B as they are extremely rare and St.Lucia is not giving them out at the moment. This one is commonly referred to as a captive bank license.

The Class A banking License has a minimum capital requirement of $1,000,000. This minimum capital requirement is mandated by the International Banks Act so it cannot be waived and it is absolutely necessary for the banking license to be given. However, we suggest you will need $2.5 to $7 million in capital to attract quality correspondent banking partners.

Besides the minimum capital requirement, you must maintain a fixed deposit of $100,000 always while the bank is operating. This is usually in the form of a CD at a local bank.

The International Banks Act, which is the legal framework that governs the banking industry in St. Lucia states in detail how the proprietor should handle the assets that are linked to the international bank such as:

• All assets recorded on the balance sheet of a financial institution as well as their off-balance sheet exposures are assigned to broad risk categories.
• The total of the risk adjusted assets, both on and off balance sheet, is compared to the level of an institution’s capital.
• The ratio of capital (Tier I and Tier II) to risk weighted assets should be a minimum of 8% of which the core element (Tier I)
  should be at least 4%.

Other important information regarding the handling of assets and capital in an International banking license in St. Lucia are as follows:

• Statutory Reserves as required by the Banking Act or the International Banks Act.
• Retained Earnings as stated in the audited financial statements. Note that the $100,000 statutory cash deposit is not included in the calculation of capital.
• General Provisions or General Reserves for losses on assets i.e. provisions and reserves not ascribed to specific assets. General provisions or general loan loss reserves made for specific assets are not eligible for inclusion in capital. General provisions or general loan loss reserves which qualify for inclusion in Tier II do so subject to a limit of 1.25% of risk-weighted assets.
• Subordinated debt includes conventional unsecured subordinated debt capital instruments with a minimum original fixed term to maturity of over five years and limited life redeemable preference shares. Such instruments are subordinated to the claims of both depositors and general creditors and are limited to a maximum of 50% of Tier I capital.
• Investments in subsidiaries engaged in banking and financial activities which are not consolidated in national systems (deductions will be made against total capital base and such investments would not be included in total assets).

Fees associated with opening an International Bank in St. Lucia:

• Application / Licence / Incorporation
  CLASS A
  Government Fees $25,800.00
  Professional Fees $15,000.00 to $20, 500.00
• CLASS B
  Government Fees $15, 800.00
  Professional Fees $15,000.00 to $20, 500.00
• Annual Fees
  CLASS A
  Government Fees $25, 300.00
  Registered Agent/ Directorship Fees $10,000.00 to $12, 350.00
• CLASS B
  Government Fees $15, 300.00
  Registered Agent/ Directorship Fees $10,000.00 to $12, 350.00

The process to form an international bank in St. Lucia is as follows: 1) draft a very detailed business plan, 2) provide supporting documents on everyone associated with the business, 3) submit an application for a permit to organize, 4) build your business and hire your employees, 4) secure your correspondent banking partners, 5) apply for your permit to operate.

The typical cost to get through step 3 (receiving your permit to organize) is about $140,000 in St. Lucia. While this post is on Puerto Rico, the process for a St. Lucia international bank license is very similar.

I hope you’ve found this article on the international banking license in St.Lucia to be helpful. For more information, or for assistance in starting a bank in Puerto Rico or St. Lucia, please contact us Here, or if you are interested in obtaining a second residency.

Here are a few article I know you’ll enjoy reading: 

Offshore Banks to Avoid – Updated

Investing Abroad in St. Lucia

Best Offshore Bank License Jurisdiction in 2017

Understanding the Role of International Banking in Belize’s Economy 

Understand The 4 Common Types Of Banking Institutions 

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