You can open and make the best use of your Puerto Rico private account even while staying away from the Island if you are aware of the available range of banking products, requirements, and terms of service.
This article covers important details of the advantages, limitations, opportunities, and requirements for setting up a non-resident offshore private banking account in Puerto Rico.
Should you need more information and professional services to help you set up the account, please contact our Offshore Pro Group’s experts by email at in**@***********rt.com.
How can a non-resident benefit from opening an offshore private account in Puerto Rico?
Puerto Rico banking institutions operate in a peculiar context, as this island country is an unincorporated territory of the United States of America.
Being de facto controlled by the United States, Puerto Rico is a tax haven offering attractive tax incentives for citizens of many countries. But this is only one of the reasons why offshore banking in Puerto Rico is very popular with High Net Worth Individuals.
Other benefits refer to the competitive banking fees, the utmost financial confidentiality, high-quality customer service, and asset protection provided by Puerto Rico banks.
USD transactions
An offshore bank account opened in Puerto Rico allows a non-resident to conduct dollar transactions with substantial savings. This is because Puerto Rico banks are part of the banking system of the USA, i.e. they operate under the rules established for the US banks, with no involvement of the correspondent banks, and USD is their main currency.
Financial confidentiality
According to the Puerto Rican legislation, Puerto Rico banks are not required to comply with the Automatic Exchange of Information and the Common Reporting Standard (AEoL/CRS). In other words, they are not obliged to share clients’ account information with foreign governments, including the USA bodies (which makes the Puerto Rico bank accounts ideal for financial privacy).
High-quality services
A foreigner’s private bank account in Puerto Rico is a convenient key to a scope of international financial services and banking products. Clients enjoy the flexible use of Visa or Mastercard, multi-currency transactions, access to a variety of investment and trading opportunities, a choice of convenient solutions.
Banks enable customers to issue payment and other orders in person or remotely via online banking and mobile applications. It means that clients, being miles away from the bank, can manage their assets and conduct operations.
Bank employees communicate with customers in many languages, including English, German, Portuguese, French, Hebrew, Russian, Japanese, Chinese, Spanish, Swedish, Italian, etc.
Technical advancements, excellence, and customer orientation are the signature features of banks in Puerto Rico.
Tax incentives
The Constitution of Puerto Rico and the recently adopted Acts stipulate provisions for the most alluring tax incentives. The relevant measures encourage export of services, attract individual investors to Puerto Rico, create a favorable environment for the growth of major local industries, and promote international cooperation.
Safety and security of funds
Puerto Rico’s banks are subject to the rules relevant to U.S. financial institutions. Most importantly, they are insured by the FDIC. This means that deposits in the amounts of up to 100,000 USD are guaranteed safety and security.
In most cases, you only need to contribute a minimum initial deposit specified by the bank. There is no requirement for keeping a minimum balance on the account. So you can withdraw any amount any time you wish.
For bigger amounts, there are special types of accounts and services of financial advisors.
What are the restrictions for opening an offshore private account in Puerto Rico?
A foreign private bank account in Puerto Rico can be easily opened by individuals with Caribbean citizenship, tax residents of the EU, and those who develop their business in Europe and economically advanced countries, except for the CIS states. Latin American clients are also given priority by Puerto Rico banks.
Limitations by country
Puerto Rico banks have restrictions for citizens of the USA and OFAC countries (Cuba, Iran, Liberia, North Korea, Syria, Zimbabwe, etc.).
Besides, not all Puerto Rico banks agree to cooperate with citizens and tax residents of the CIS countries.
To be able to open a non-resident bank account in Puerto Rico, such individuals should consider the options of obtaining a second citizenship or starting a business in the Caribbean or EU countries.
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Limitations by type of activity
When filling out the questionnaire as part of an application for opening an account with a bank in Puerto Rico, you must specify the origin of your funds. You will need to indicate the amount of income for the past five years, the source of wealth, and the country of origin of the funds. This may include inheritance, dividends, salary (pension), rent or investment income, and other options you will need to disclose.
Please note that banks will most likely request to submit the documented proof of funds. Copies of the following papers are usually considered sufficient:
- tax return
- statement of the sale of business or property
- salary statement
- financial statements of the private company
- proof of acceptance of the inheritance
- income from property
- other supporting documents clearly indicating the origin and amount of your assets.
Having considered the submitted documents, the bank will decide whether to approve or refuse the application. Because Puerto Rico banks actively help the U.S.A. in countering terrorism and money laundering, they are required to conduct Due Diligence and check information about everyone who applies for services and cooperation. This means that they will request the following information:
- full name;
- address;
- date of birth;
- other information that will help identify an individual (such as a driving license, or other documents).
Besides, if the client is going to conduct investment activity through the bank, the managers will occasionally request information and documented proof of the client’s current tax status.
The banks are ready to provide support for the client’s access to the available tax incentives if the client requests it.
Types of Puerto Rico offshore accounts
A foreign bank account in Puerto Rico gives clients a lot of advantages and access to the full range of banking services. Transactions can be carried out remotely. The banks provide customers with an opportunity to open multi-currency accounts, keep assets and savings, use bank cards, engage in investment activities, and trade in securities.
Currencies
The main currency of an account is USD. Multi-currency accounts allow you to conduct transactions in many world currencies: EUR, CHF, GBP, CAD, JPY, AUD, and others.
Types of accounts with banks in Puerto Rico:
- private
- fiduciary
- corporate
- trading.
Bank cards
Almost all banks issue debit cards, but no credit cards. You can find out in advance which payment cards are issued by the bank of your choice in Puerto Rico. The country has a fairly extensive ATM (ATH) network, where clients can withdraw cash.
Online banking
There are several options for remote asset management. To be able to conduct transactions on your account with a bank in Puerto Rico while you are miles away from the Island, you will need to indicate from the very start (when opening the account) the preferred mode of communication. Banks offer the following opportunities for remote access (in each case certain requirements will apply):
- by phone
- by fax
- by e-mail.
If the client does not indicate in advance the preferred channel of remote communication with the bank regarding execution of payment or investment, the bank will process only original copies of payment orders.
Note: when signing the agreement on remote banking, the client agrees to waive any possible future claims in case his mail is hacked or his phone is taken over by an unidentified person. At the same time, if there are doubts that the payment instructions came directly from the client, the bank may suspend the operation until it receives a written confirmation.
Tariffs
To get access to banking services, the client needs to place a minimum deposit amount on the account. The amounts are bank-specific.
For example, the minimum deposit and balance can be USD 500,000 at one of the recommended banks.
The fee charged by the bank for its consideration of the application for opening an account is $5,000.
The account maintenance fee is 0.75% per month (at least $900 per quarter).
The fee for incoming transactions is $75.
The fee for outgoing transactions is $250 per month (not less than $900 per quarter).
To choose the bank which is right for you, please refer to our experts and discuss different rates and fees, as well as other details.
How to open an offshore private account with a Puerto Rico bank?
Since Puerto Rico banks are very selective in their approach to cooperation with clients from certain countries, a preliminary consultation is required. You should contact a professional expert to find out if you can qualify for opening a private bank account with a Puerto Rican bank.
If you are sure that there are restrictions for opening your account, you will be offered alternative options. For example, you can obtain second citizenship or start a business in some other country to comply with the requirements and achieve the desired result.
Procedure for opening an offshore private account with a Puerto Rico bank:
- Determine if you are eligible to open a private account in that jurisdiction. If you find the entire objective challenging, or if you need assistance in overcoming some complications and restrictions, please contact us by email at in**@***********rt.com for advice.
- When you have signed an agreement with us, you will need to pay for our services. We accept payments made by transfer to our bank account, by Western Union transfer, by payment card, PayPal, WebMoney. The cost of our services starts at 2999 EUR.
- Prepare a package of documents. If you plan to open an account remotely, you will need to get the copies of your documents notarized.
Please note: all documents need to be submitted in English.
Documents to be submitted for opening an offshore private account with a Puerto Rico bank
You will need to fill out the forms provided by the bank. We will counsel you on completing them according to the bank’s requirements. If the bank requests to submit documents that you are not ready or can not provide for some reason, we will recommend another financial institution. The filled out forms should be scanned and sent first to us for revision, and we will check them with the bank. Only after receiving the preliminary confirmation from the bank, we will guide you on how to prepare and submit the portfolio of the original copies (if required) and certified copies of documents.
Set of documents:
- legible copy of passport
- any other ID (insurance card, voter ID, social security card, work pass, etc.)
- proof of address (not older than 3 months)
- proof of funds
- CV
Note: The bank accepts documents in English, so all copies should be translated and notarized. The bank may also request other documents.
Timelines for opening an offshore private account with a Puerto Rico bank
A Puerto Rico bank’s decision about opening a non-resident private account is usually available within 10 days after the submission of the application portfolio.
To find out more specific details about particular Puerto Rico banks and terms of opening private accounts in Puerto Rico, please consult our expert team by writing to in**@***********rt.com
12 September 2020 