In general, onshore jurisdiction have much stricter requirements which in turn leads to higher setup costs for those applicants wishing to obtain a bank licence. What one should consider when choosing a location for incorporation of a bank, is the initial cost for both the application and setting up of banking facilities. As you will see offshore jurisdictions have greater advantages over its onshore rivals. Allowing the bank to operate tax-free with no charges on profits. Enabling them of pass the saving on to the clients.
Tax is deducted at source on interest payments to the clients.
In some of the more popular jurisdiction a bank can be maintained without the physical presence other than the Service Company within the jurisdiction of incorporation. Incorporating your own bank will give rise to a number of possibilities. For instances, you may create your own banking instruments such as bonds, securities, etc., providing the necessary deposits are made, you can issue letters of credit for yourself, certificates of deposit, letters of recommendation and such likes. As well as boosting your corporate image you are able to issue your own bank references for yourself and others for a fee, grant yourself constructive credit ratings or seize your own assets before the creditors do. You can also grant your own loans and mortgages, an excellent way of legally moving your profits offshore and reducing the tax consequences.