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Puerto Rico IFE License, Explained

Puerto Rico IFE License

Q: What is Puerto Rico’s IFE license, and how do I obtain one?

Thanks to one of our customers for this great question! An IFE (International Finance Entity) license is a specific authorization given to international banks operating in Puerto Rico. The application process is complex and requires significant capital investment—it also must be completed with the assistance of an attorney admitted to practice in Puerto Rico. If you’re hoping to secure an IFE license, here is what you need to know:

What is an International Finance Entity?

An IFE is an international financial institution (like a bank) that’s licensed by, and located in, Puerto Rico. It can be a stand-alone entity, or a “unit” of an existing entity. According to Puerto Rico’s International Financial Center Regulatory Act (Act 273), the purpose of licensing international banks in Puerto Rico is “to broaden the potential market of Puerto Rico’s International Financial Center and significantly increase the Island’s promotion and recognition in the financial industry worldwide.”

To that end, licensed IFEs are issued tax incentives (such as a 4% fixed income tax rate) for doing business on the island. However, most IFE activities are only authorized for business transactions with non-residents of Puerto Rico.

Can I obtain an IFE license for my business?

You should make sure your business will be able to meet Puerto Rico’s strict requirements before applying for an IFE license. According to Act 273, licensed IFE businesses must have:

  • A physical office in Puerto Rico
  • At least 4 employees (full-time) in Puerto Rico
  • Capital stock worth no less than $5 million ($250,000 of which must be paid-in-capital when your license is issued)
  • Unencumbered assets or financial securities of at least $300,000 (to be maintained at all times)

How do I apply for an IFE license?

The official application for an IFE license can be downloaded through the Office of the Commissioner of Financial Institutions website. To download the PDF, go to the “International Financial Entity” section, then click on “Application for a Permit to Organize an International Financial Entity.” Your application must include:

  • Name of IFE
  • Location of IFE (in Puerto Rico)
  • Entity type (i.e. Corporation, LLC, or partnership)
  • Business activities (in brief)
  • Names of directors, officers or managers
  • Applicant’s (i.e. “owners or control persons”) name, address, mailing address (if different), phone number
  • Name of authorized representative permitted to act as authorized agent (if applicable)
  • Nature of applicant’s business
  • Names of executives, directors, or any affiliates engaged in international financial business outside Puerto Rico
  • Signature and title of authorized representative
  • Affidavit

You’ll also be required to provide supplemental forms, including:

  • Cover letter from a legal advisor (who must be admitted to practice law in Puerto Rico)
  • IFE Business plan
  • Number of employees and a brief description of the financial experience of proposed officers / directors
  • Formation documents (i.e. articles of incorporation, articles of organization, partnership agreement)
  • Certification (if organized as a unit of a larger entity)
  • Board resolution authorizing designated “authorized representative” to file application (if applicable)
  • Proof of proposed manager(s)’s personal history (resumes, credit history, criminal background checks, etc.)
  • Financial statements going back three years
  • Explanation of IFE’s proposed organizational structure
  • Manuals of compliance with: AML, BSA, OFAC, and US Patriot Act

How much does it cost to apply for an IFE license?

The application fee for an IFE license is $5,000. (Note that this fee is non-refundable.)

Where should I send my application for an IFE license?

Commissioner of Financial Institutions
International Financial Entities
Centro Europa, Suite 600
1492 Ponce de León Ave.
San Juan, PR 00907

Who should I contact if I have any questions about my IFE license application?

You can contact the Office of the Commissioner of Financial Institutions by phone or email.

Phone: (787) 723-3131


How long will it take for me to get my IFE license?

The process typically takes about three months since your business will have to pass two rounds of inspection before you can receive your IFE license. You’ll initially be granted an IFE permit—then, if you pass the second round of inspection by the Commissioner of Financial Institutions, you’ll receive your IFE license.

What do I do after I get my IFE license?

To benefit from the preferential income tax rate afforded IFEs, you’ll need to contact the Secretary of the Department of Economic Development and Commerce of Puerto Rico to request a tax exemption decree. You’ll also have to maintain your IFE after receiving your license, which means keeping the business entity itself in good standing, as well as renewing your IFE license each year.

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