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PALMAS

DEL MAR
OFFSHORE BANKING ACT

AN INTERNATIONAL BANKING PLATFORM TO EXPORT FINANCIAL SERVICES TO FOREIGN MARKETS

The International Financial Center Regulatory Act • Trust services TAX BENEFITS UNDER ACT NO. 273:
(Act 273) seeks to expand the potential market of • Securities brokerage • IFEs will enjoy a 4% flat income tax rate on
the International Financial Center of Puerto Rico.
• Clearinghouse services their income
The benefits of an international financial center in • Distributions from earnings and profits derived
Puerto Rico are the expansion of the service sector, • Asset management from IFEs:
as well as the direct and indirect creation of employ- • Other financial services
ment and growth in the economic activity. Puerto IFEs are generally not permitted to do transactions • Taxed at 6% for shareholders that are Puerto
Rico offers many favorable conditions to perform with local Puerto Rico counterparts, except in Rico residents
international financial transactions, such as political certain cases such as these: • 100% exemption from Puerto Rico taxes on
stability, the soundness of its banking system, the such dividends
close economic relationship with the United States, • Certain transactions involving the Government • Municipalities in Puerto Rico may levy a gross
the high degree of professionalism, bilingualism and Development Bank and the Economic Develop- receipts tax of up to 1.5% for financial services
technical capacity of its human resources, a unified ment Bank of Puerto Rico
market and monetary system, its privileged geo- • Certain transactions and activities involving secu- • IFEs will be 100% exempt from all property taxes
graphical position and a properly developed com- rities issued by the Government of Puerto Rico • A 15 year tax decree, renewable for two (2)
munications network. • Participation in local loan syndications originated additional 15 year periods

To meet the purposes hereinafter mentioned, the by a local bank
law provides for the organization of International • Purchasing of substandard or non-performing
Financial Entities (IFE). An IFE is a Puerto Rico entity loans from Puerto Rico entities
engaged in traditional banking or financial services
for non-Puerto Rican clients. IFEs are under the
supervision of the Office of the Commissioner of
Financial Institutions.

ELIGIBLE BANKING ACTIVITIES UNDER
ACT 273:
• Accepting deposits
• Borrowing money

• Lending
• Letters of credit
• Refinancing

• Foreign currency exchange
• Underwriting
• Trade financing

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