• Paid-in capital: Increased from $5 million to $10 million.
• Mandatory CD deposit: Increased from $200,000 to $1 million.
• Practical total: At least $12 million in liquidity recommended, factoring in a $1 million startup budget.

These requirements align Puerto Rico with smaller U.S. states like North and South Carolina and exceed many offshore jurisdictions, while remaining below levels seen in Switzerland and Mexico.

• Application fee: From $5,000 to $50,000.
• Potential investigation fee: Estimated at $25,000.
• Annual license fee: From $5,500 to $25,000, plus $5,000 per branch.

These fee hikes deter undercapitalized entrants and fund a more robust regulatory apparatus.

• Regulatory approval: Now required for any share transfer, regardless of percentage.
• Change of control fee: $75,000 for transactions involving 10% or more of voting shares, including a $50,000 application fee and $25,000 research fee.

• Minimum local staff increased from 4 to 8 employees.
• Compliance staff mandate: At least two compliance professionals based in Puerto Rico, including a Chief Compliance Officer.
• Full autonomy of compliance operations must reside on the island.

• Offshore holding companies are now prohibited.
• Only entities incorporated in Puerto Rico or the United States may hold an IFE license.

• Every IFE must have at least one independent director with no financial ties to the bank.

• Custody of virtual assets and virtual currencies is now allowed.
• Operating as a crypto exchange remains prohibited.

• Late renewal fines: $1,500–$5,000 per day.
• Violation fines: $5,000–$25,000 per breach, with severity assessed during audits.

Existing IFEs are not immediately required to meet the new $10 million capital threshold but must incrementally increase their CD holdings:

• $500,000 by 2025 renewal
• $750,000 by 2026 renewal
• $1 million by 2027 renewal

Banks failing to meet these milestones risk closure. Underperforming or “unclean” institutions will not be allowed to sell their licenses, effectively narrowing the market to well-capitalized, compliant players.

For Existing Banks

• Stronger capitalization enhances resilience and improves the likelihood of Fedwire approval.
• Increased operational costs may pressure marginal players, prompting consolidation or closure.

For New Entrants

• Higher financial and compliance thresholds mean fewer licenses will be issued—likely no more than 2–3 per year.
• Purchasing an existing compliant bank becomes a more viable path than applying for a new license.

For the Jurisdiction

• These reforms are expected to elevate Puerto Rico’s reputation in the global banking community.
• A smaller, better-capitalized IFE sector could attract more correspondent relationships and Fedwire integrations.

While the reforms impose significant barriers to entry and higher operational burdens, they are likely to yield a leaner, more reputable, and better-integrated international banking sector. This, in turn, could enhance Puerto Rico’s position as the premier jurisdiction for international banks seeking U.S. financial system access.

The strategic shift is clear: Puerto Rico aims to prioritize quality over quantity, weeding out underfunded operators while attracting sophisticated, well-capitalized institutions capable of sustaining compliance and governance at the highest levels.

The 2024–2025 amendments to Act 273 represent a pivotal evolution in Puerto Rico’s international banking landscape. By raising capital requirements, professionalizing compliance operations, and tightening ownership rules, the territory has signaled its intent to maintain leadership in the global offshore banking sector while protecting its reputation and financial integrity.

For investors, operators, and policy analysts, these changes underscore a fundamental truth: the era of easy entry into Puerto Rico’s international banking sector is over. The future belongs to those who can meet—and sustain—the higher standards now set in law.