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Banking Licenses
Obtaining a banking license is a significant step for entering the financial market. This process guarantees the legality of your operations, increases customer confidence and provides access to international financial products. Our team will assist you in successfully completing this procedure and lay a solid foundation for the development of your business.
Before obtaining a banking license, you need to understand the bank's functionality, structure and reporting. And whether you are ready to follow all the instructions and acts of the State (Central) Bank of the jurisdiction where you plan to open your bank.
A bank is an organization, a legal entity established in accordance with the law, the main purpose of which is to generate income by performing the following banking operations:
- attraction of funds of individuals and legal entities into deposits;
- placement of these funds in its own name and at its own expense on the terms of repayment, payment and maturity;
- opening and maintaining bank accounts of individuals and legal entities.
Ignoring regulatory requirements can lead to serious consequences: fines, license revocation or even criminal liability. Regulators carefully monitor compliance with standards, including AML (anti-money laundering) procedures, and ensure the security of client data. The support of qualified lawyers will avoid mistakes and speed up the licensing process.
We offer a full range of bank licensing services, including:
- Analyzing and selecting the appropriate jurisdiction;
- Preparation and submission of documentation;
- Support at all stages of obtaining a license;
- Consultations on compliance with regulatory requirements.
Our Law&Trust team are experts with many years of experience, ready to assist you at the highest level.
Why do you need a banking license?
A banking license confirms the legality of an institution's activities and allows it to:
- Officially operate in the field of banking services, complying with local and international legislation;
- Earn the trust of clients and partners through strict regulation and control by supervisory authorities;
- Gain access to international payment systems and financial markets;
- Protect the interests of clients through mandatory compliance with safety and security standards.
Term of Banking License
Our team analyzed the common requirements for banking organizations in different regions of the world such as: Europe, Asia, Oceania, North and South America, and offshore, and identified the following common requirements:
|
Minimum capital |
On average from 1,000,000 USD to 10,000,000 USD depending on the jurisdiction |
|---|---|
|
Local staff |
Almost everywhere there is a requirement for qualified staff (e.g. Directors, AML officers, etc.) |
|
Legal structure |
registration of a legal entity within the state in the established organizational and legal form |
|
License fees |
Depends on the country, on average from 10,000 USD to 100,000 USD |
What jurisdictional options do we have to offer?
Below we present a list of jurisdictions, with their main advantages and requirements.
|
Country, Region |
Advantages |
Requirements |
Minimum capital |
|---|---|---|---|
|
Switzerland, EU |
Strict confidentiality; Reliable reputation as a financial center; Access to international markets; Advantage in acquiring clients interested in private asset management. |
Strict control over the origin of funds. |
1,500,000 CHF
(approx. 1 700 000 USD approx. 1,600,000 EUR) |
|
Singapore, Asia |
Stable economic and political environment; Low tax rates; Highly developed infrastructure; Opens access to the Southeast Asian market. |
The need for localized control. |
1,500,000,000,000 SGD (approx. 1,104,000,000,000 USD) |
|
Cyprus, EU |
EU membership; Attractive tax conditions. |
Compliance with EU directives; Availability of qualified local staff. |
5 000 000 EUR (approx. 5,200,000 USD) |
|
Seychelles, Offshore |
Affordable license cost; Preferential tax regime. |
The need to comply with international standards. |
2 000 000 USD (approx. 1,900,000 EUR) |
|
United Kingdom, Europe |
High level of trust; Access to European and global markets. |
Rigorous regulatory compliance checks. |
5 000 000 EUR (approx. 5,200,000 USD) |
Requirements to documents for obtaining a banking license
We note separately that each country has its own unique risks or conditions for license revocation. For example, failure to comply with internal AML procedures in the UK will result in license revocation, while in Singapore, fines of up to SGD 500,000 can be imposed if bank reporting requirements are violated.
Our Team has also identified a number of document requirements:
|
Document |
Notice |
|---|---|
| Passport data of the founders |
Certified copies |
| Certificate of no criminal record |
For all key stakeholders |
|
Financial statements |
Confirmation of sources of income |
|
Business plan |
Must include strategy and business forecasts |
|
AML documentation |
Policies and procedures to combat money laundering |
|
Bank statements |
Confirmation of authorized capital in the prescribed amount |
| Qualifications of key employees |
Proof of experience in a senior financial management position (at least 5 years is recommended) |
| IT and security strategy |
Most jurisdictions require data protection plans and systems and infrastructure to ensure that all data, as well as the bank accounts themselves, are protected |
The process of obtaining a banking license
While the process of obtaining a banking license varies from one country to another, it is rarely quick, although it can be expedited. The key to getting started is to understand the approximate timeline for obtaining a license and all the necessary preliminary steps.
- Preliminary analysis:
Assessing compliance with jurisdictional requirements;
Preparing a business plan and financial model. - Document preparation:
Collecting and certifying all required materials;
Checking for compliance with regulatory standards. - Application submission:
Registration of the company;
Contribution of authorized capital. - Consideration of the application:
Terms: On average from 6 months to 2 years;
Communication with regulators, provision of additional information. - Issuance of license:
Commencement of operations and compliance with current regulatory requirements.
Our team was also able to determine an approximate timeline for obtaining a banking license, provided that the process begins with nothing more than your desire.
- Preparation of documentation: 2-3 months;
- Registration of the company, opening an account, depositing the authorized capital: 1-4 months;
- Consideration of the application and obtaining a license: 6 months - 2 years.
Recommendations for obtaining a banking license
When choosing a jurisdiction to establish a bank and obtain the appropriate license, it is important to consider factors that directly affect the business, such as tax rates, requirements for founders and directors, access to the international market, banking directives and more. It is worth determining as much as possible to choose the best option, as different jurisdictions offer unique conditions for each of these aspects.
Our team has prepared the following recommendations for a more successful first step in this direction:
- Research the jurisdictional requirements:
Carefully research the requirements of your chosen country, including minimum capital, mandatory documents and regulatory guidelines.
- Plan for long-term goals:
A license is beneficial in jurisdictions that offer strategic access to the right markets.
- Utilize the help of professionals:
Consult legal and financial advisors to avoid filing errors and operate in compliance with the law.
- Ensure transparency and compliance:
Prepare detailed documentation, including a business plan, proof of funding sources, and qualifications of management staff.
- Keep abreast of changes in the law:
The legal and financial environment is changing rapidly, so it is important to stay abreast of changes affecting the banking sector.
It should be noted separately that when obtaining a banking license, it is recommended to consult lawyers, as incorrect execution of documents at any of the stages may result in the refusal to register a legal entity or refusal to issue a license. For successful completion of all stages, it is important to seek help from professionals. Law&Trust lawyers will help you identify the most suitable country and help you coordinate, taking into account your individual needs.
