Basic Types Of Offshore Bank Licenses You Should Know About

By Author: Cameron Scott
Total Articles: 13
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Among the most lucrative business endeavors, offshore banks would probably be one of the top five. Offshore banks are perceived to be the masters of the financial world and in fact, the rest of the business world look up to them as one of the economic indicators. This is why the rules that govern the formation of offshore banks are very strict and must be followed to the letter. If you are planning to form one, then you might want to know some basic types of offshore bank licenses.

While there are myriads of licenses available for offshore banks, you can actually divide it into two basic types. These are the general and the restrictive bank license. Banks under the first type are allowed to provide services to non-residents of the host country. While it functions just like any regular bank, its services are limited to offshore banking service only.

The restrictive bank license, on the other hand, confines the activities of an offshore bank to offering its services only in foreign currency, sometimes, even just to a particular group of individuals. In most cases, banks under this type of license may not accept deposits ...
... from the general public and its services are limited to only those who were mentioned in the bank license.

These types of offshore banks have the potential to engage in active cash flow management, can issue a variety of bonds and guarantees used for tender proceeding purposes, conduct progressive financing of business activities of a financial or holding entity, and grant an offshore loan through its credit facilities. As you well know, offshore loans are generally regarded as the lifeblood of most overseas projects because of their low rates.

If you are planning to form an offshore banking bank and has a solid business plan on how to make it one of the banks to reckon with, but is a little bit short on the financial requirements, then financiers who might be interested with your business plan would certainly come in handy. However, if you find a little bit of difficulty in having a meeting with them, you can always seek the services of a financial services firm who can act as a go between you and the financier.

Your offshore bank formation will be easier with the help of these financial services firms acting as intermediaries. All you have to do is to file a petition with them to see if you qualify for their services. Once you pass their evaluation, you can expect to be invited to meet with a financier. Your offshore bank formation would now be closer to reality.