Which jurisdiction should I open or purchase a bank in?

[Helkins]

Hello

I have been lurking the forum for quite a while now and want to move towards setting up my own bank, which jurisdiction would you say is best, most reputable and cheapest to get the banking license in? I'm running a decent size payment services and crypto on-ramp off-ramp operations for couple years now, want to scale it up.

Was looking initially at Comoros but with all the confusion whether it's fake or not I don't want to be taking a gamble.

Thank you

 

[W Fish]

Hello

I have been lurking the forum for quite a while now and want to move towards setting up my own bank, which jurisdiction would you say is best, most reputable and cheapest to get the banking license in? I'm running a decent size payment services and crypto on-ramp off-ramp operations for couple years now, want to scale it up.

Was looking initially at Comoros but with all the confusion whether it's fake or not I don't want to be taking a gamble.

Thank you

Why? -> how do you plan to make money with banking?
Where is you market? Doubt you will attract much deposit in EU with some exotic island licence.

 

[Sols]

April 1st was on Tuesday...

I have been lurking the forum for quite a while now and want to move towards setting up my own bank, which jurisdiction would you say is best, most reputable and cheapest to get the banking license in?

EU. Minimum share capital for a standard bank license is just five million EUR. One—two million if you go for a special bank license where available (such as Lithuania). As long as your business plan is reasonable, they often won't ask for a higher amount than the 5 or 1-2 million EUR figure.

It's hard to beat. Most other good and reputable places have higher minimums, ranging from 2x to 1000x the EU requirement.

On paper, places like Cayman Islands and BVI, which are quite reputable while being notorious tax havens, have requirements of 1 million or less. But when you approach the regulator and discuss licensing, the easy days are over and they expect to see capital similar to EU/UK/US if you plan to run a traditional banking model.

After that you're left with Dominica, Saint Lucia, and so on. Quite sure you can still get a license for under a million there for international/non-resident banking activities.

 

[Helkins]

Why? -> how do you plan to make money with banking?
Where is you market? Doubt you will attract much deposit in EU with some exotic island licence.

The bank is just a part of a larger business model. I have facilities with large German and UK bank that help me with onramp and offramp for customers. All in all we're looking to solve the issue of crypto-fiat-crypto conversions, ease of onramping and timeframe for cross border settlements, replacement for banking instruments. As one of our solutions we're already helping clients process payments from South America to China at low cost and 1/8th the speed of a traditional banks there.

Our main markets are South America, MENA and APAC with few large customers in EU.

 

[Helkins]

April 1st was on Tuesday...


EU. Minimum share capital for a standard bank license is just five million EUR. One—two million if you go for a special bank license where available (such as Lithuania). As long as your business plan is reasonable, they often won't ask for a higher amount than the 5 or 1-2 million EUR figure.

It's hard to beat. Most other good and reputable places have higher minimums, ranging from 2x to 1000x the EU requirement.

On paper, places like Cayman Islands and BVI, which are quite reputable while being notorious tax havens, have requirements of 1 million or less. But when you approach the regulator and discuss licensing, the easy days are over and they expect to see capital similar to EU/UK/US if you plan to run a traditional banking model.

After that you're left with Dominica, Saint Lucia, and so on. Quite sure you can still get a license for under a million there for international/non-resident banking activities.

Thank you for the input, I was looking at Lithuania, the issue I have with EU is compliance hurdles and timeframes for set up or transfer of ownership from any existing entity. Are any of the places in the Caribbean actually still issuing licenses? My personal preference would probably lay in St. Lucia but I'm unaware of the current situation there. Dominica I've heard they've stopped issuing new licenses and the government became a banana republic corruption cascade in regards to licensing.

 

[daniels27]

Sounds pretty cool. Maybe Astana International Financial Centre could be an option?

 

[Offoffshore]

I was looking for something and found this lawyer's website.

https://legalbison.com/

 

[ilke]

Was looking initially at Comoros but with all the confusion whether it's fake or not I don't want to be taking a gamble.

You can theoretically go for Anjouan as you mention but IMO this is not more than a cosmetic license. It theoretically works but these licenses are not globally recognised, I think the primary benefit is that you can use bank in your business name, lol.

Thank you for the input, I was looking at Lithuania, the issue I have with EU is compliance hurdles and timeframes for set up or transfer of ownership from any existing entity.

Yes, it's very slow and compliance is annoying and expensive. Especially Lithuania, which is not good for doing business at the moment.

As I understood, you are only after payment services and funds safeguarding; therefore, maybe a PI/EMI/MSB would be enough for you. For example, setting up a Cypriot PI with direct clearing through CY-SDD seems reasonable and has simpler processes. There are quite a few reliable law firms there who could be entrusted for such a task.

Are any of the places in the Caribbean actually still issuing licenses?

Hard to say, these regulators are never too transparent or informative.

My personal preference would probably lay in St. Lucia but I'm unaware of the current situation there.

Well, quite decent capital requirements, but they have not issued a license in a very long time. You would probably have to impress them (i.e., beating the capital requirements and all document preparations by a long shot).

Dominica I've heard they've stopped issuing new licenses and the government became a banana republic corruption cascade in regards to licensing.

Several licenses have been issued in the last 2 years (Nodabank – operates Brightyapp, Ecopayz Bank – from the Turkish/Georgian EMI, Sentenor Bank Corporation – not yet active, licensed in the last 3 months, etc.). So at least from an outsider POV, it appears to still issue licenses and also seems pretty crypto-friendly. Nevertheless, I have also heard of this 'corruption loop' when trying to obtain the license.

If you want to have a bank specifically, maybe Vanuatu could work. I don't have direct experience but I have heard relatively positive accounts, and the capital requirements are quite fair.

Sounds pretty cool. Maybe Astana International Financial Centre could be an option?

This is actually quite a good idea. One would have to explore which license type is the most suitable here. The "Operating a Digital Asset Trading Facility" could be quite interesting as there is a lot of government support and they assist with initiating some kind of bank cooperation (e.g. Binance got assigned Freedom Finance Bank and has been successful for 2 or so years, and many banks including Eurasian Bank or Altyn Bank are also participating). But otherwise could look at a general Banking business licensing (opening and operating a bank account, operating a formal payment system).