Banking license in Dominica

1. Licensing Requirements

• Company Incorporation:
  • The applicant must establish a local company in the Commonwealth of Dominica to apply for the Banking License.
  • The applicant cannot be an International Business Company, and bearer shares are not permitted. The company has to be registered with proper articles of association and constitutional document, clearly revealing the company owners.
• Minimum Capital Requirement:
  • The minimum paid-up capital requirement is USD 1,000,000.
  • The capital may be deposited in a bank account opened in the name of the bank outside Dominica and pledged in favour of the Government of Dominica, subject to regulatory approval and applicable requirements.
• Directors and Key Officers
  • The applicant must appoint at least one individual director resident in the Commonwealth of Dominica.
  • The applicant must also appoint at least one Compliance Officer resident in Dominica. The resident director and Compliance Officer must be approved by the Financial Services Unit.
  • Additional non-resident directors are permitted, if they satisfy due diligence processes and receive approval from the FSU.
• Shareholders
  • At least one shareholder is required. The shareholder may be either an individual or a corporate entity.
  • At least one shareholder should be resident in the Commonwealth of Dominica. All shareholders, significant shareholders, ultimate beneficial owners, associates, affiliates and connected persons are subject to due diligence and approval by the FSU.
• Local Presence
  • A representative local office in Dominica is required.
  • The local presence structure should support the bank’s governance, compliance and operational functions. Depending on the structure, the company may also need local support for compliance, administration and banking operations.
• Business Plan and Financial Projections: A detailed business plan must be prepared and submitted as part of the application.
• Due Diligence and Regulatory Review: Directors, executive officers, significant shareholders, authorised agents and connected persons are subject to regulatory due diligence.
• Government Fees
  • The application fee is USD 2,000.
  • Once the license is approved, there is a license fee of US$8,000 payable to FSU.

2. Ongoing Compliance

In Dominica, regulated and licensed entities such as banks have to operate within the scope of their granted license, license condition and relevant regulatory requirements.

Ongoing compliance may include:

• maintaining the required capital and financial standing;
• maintaining proper corporate records;
• ensuring ongoing AML/CFT and KYC compliance;
• maintaining approved directors, officers and local presence;
• updating the regulator on material changes;
• maintaining internal controls, inspection and reporting systems;
• paying applicable government and annual license fees;
• maintaining relationships with auditors, correspondent banks, SWIFT, card schemes and payment infrastructure partners where applicable.

3. Recent Developments

Dominica remains a popular offshore banking solution; however, the regulatory environment has become more compliance-focused. The FSU pays close attention to licensing legitimacy, AML/CFT controls, proper use of banking terminology and the real substance of offshore banking operations.

From the perspective of a potential applicant, this means that Dominica should be approached as a regulated and serious banking venture requiring proper due diligence, sufficient capitalisation, local office presence, suitable management, AML/CFT documentation and an actual functioning banking operation.