Boutique financial services and global private banking is a growing industry. The Caribbean island country of St. Vincent and the Grenadines facilitates international banking licenses to eligible businesspeople. To obtain an international banking license from the Financial Services Authority, the company has to ensure that its operations can adequately be defined as banking business.
Located in the Eastern Caribbean, Saint Vincent and the Grenadines is an independent parliamentary democracy. The Eastern Caribbean Dollar is the official currency of the nation, but the United States dollar is widely accepted as well. A stable and robust banking system supports all major international currencies in Saint Vincent and the Grenadines. It has served as an offshore financial center since 1976, offering nonresidents a diverse range of investment opportunities. There were several new offshore laws introduced in 1996, including The International Banks Act, 1996, which provided better licensing procedures and regulated international banking from within the State.
Since nearly twenty years, the small island nation has been trying to establish itself as an offshore financial center. In addition to tourism, the financial services sector contributes significantly to Saint Vincent and the Grenadines' gross domestic product. A robust framework has been developed primarily for the banking, insurance, and mutual fund industries by the International Financial Services Authority.
An offshore bank can be formed in Saint Vincent and the Grenadines. Banks and financial institutions incorporated in the jurisdiction may not engage in transactions with local persons. Yet, activities outside of the territory include deposit taking, online banking and cards. The absence of a St. Vincent deposit guarantee scheme requires banks to maintain adequate financial reserves. Licenses are recognized worldwide, cost-effective, and can be obtained quickly.
Offshore banking has continued to be driven by increasingly complex regulations and an erosion of financial privacy rights in major financial centers such as the United States and the European Union in recent years. Despite the increased focus on anti-money laundering controls in certain jurisdictions, billions of dollars are still deposited in offshore banks, increasing offshore banking's legitimacy. Despite this push towards transparency, there is a tremendous opportunity to start an offshore bank as most banks have stopped accepting international and high-risk clients.
Saint Vincent and the Grenadines issues two types of international banking licenses:
Besides maintaining a fully paid-up capital, each license type also requires a statutory deposit:
The licensee must not only maintain the minimum paid-up capital, but also establish a local presence with a manager and two employees to maintain the license. Additionally, the licensee must appoint a local Director who can also serve as the manager of the bank.