Gov’s bill would allow international entities to provide financing in Puerto Rico
SAN JUAN – A bill introduced in Puerto Rico’s legislature, on behalf of Gov. Ricardo Rosselló, would authorize International Banking Entities (IBEs) and International Financial Entities (IFEs) to provide loans in Puerto Rico, with the objective of achieving additional capital through the financing option.
“With this legislation, we continue to demonstrate that Puerto Rico is open to doing business. By allowing these banks to offer commercial financing to domestic persons, we foster local and foreign investment, at a time when the island begins its reconstruction after the hurricanes,” Rosselló said in a statement.
These entities already do business in Puerto Rico, but may only carry out certain transactions. The loans they provide “are only authorized for non-domestic persons and other exceptional situations. They operate under tax decrees or tax exemptions provided by law,” the governor’s office said.
With the proposed amendments, these institutions would be able to offer financing that would be taxed at the same tax rate as local banks and cooperatives, with the Financial Institutions Commissioner’s Office continuing to license and regulate these institutions.
The governor’s office said the bill includes oversight measures, “so as to ensure on the island the presence of stable and financially sound entities,” with the governor adding that the “initiative opens the financial market to greater competition, but fair and just competition. The international institutions that provide these financing services will pay for this activity on equal terms with the banking institutions of Puerto Rico.”