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SDR FULL INTERNATIONAL BANKING LICENSE HOLDERS: |
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Somalia Democratic Republic business activities are carried on with non-residents. Qualified global businesses are aircraft financing and leasing, asset management, consultancy service, financial services, funds management, information and communication technology services, insurance, licensing and franchising, logistics and/ or marketing, operational headquarters, shipping and ship management, trading and such other qualified global business as may be approved by the SDR.
SDR is aiming to become a role model for economic and social transformation in the region. Large scale investment in all social and economic sectors will also lead to the development of a strong financial market. These investments will grow SDR’s, lay a strong foundation for a regional capital market, develop world class human resources and provide top-tier services to institutions and individuals.
Development of the financial market and financial services sector will be driven by the SDR, which provides financial institutions with a world class financial services platform situated in an economy founded on the development of its hydrocarbons resources. It has been created with a long term perspective to support the development of SDR and the wider region, develop local and regional markets, and strengthen the links between the energy based economies and global financial markets.
The SDR financial market and financial services sector will continue to develop rapidly over the next few years, driven by large-scale investment. Apart from SDR itself, which needs to raise the capacity of its financial services to support more than $13 billion worth of projects, the SDR also provides a conduit for financial services providers to access nearly $67 billion of investment in the rapidly growing financial markets across the SDR as a whole over the next decade.
Somali offshore banks operate in a liberal, proactive business environment which is regulated by the Somali International Financial Centre (SIFC), under the International Bank Act, 2003. There are few restrictions on day-to-day operations. The government recognizes that most of these banks will do business "offshore" with sophisticated investors and as such self-regulation is preferable.
The Authority grants of International Banking License:
All International banks applying for a license to operate in SDR must submit a completed application (in duplicate) along with the prescribed fee to the International Financial Services Authority. All applicants are required to complete a ‘fit and proper’ questionnaire. The following requirements apply to all banks that are issued with a license to operate in SDR:
- They must establish a physical presence in SDR
- They must have local employees
- There must be at lease one (1) local Director approved by the International Financial Services Authority
Class A
- Non-refundable application fee of US$1,000.00
- Bank must establish and maintain a capital fund with fully paid-up capital of not less than one million US dollars (US$1,000,000.00) or its equivalent in another currency
- Banks are required to hold a deposit or invest the sum of five hundred thousand US dollars (US$500,000.00) or its equivalent in another currency, in such a manner as the Authority may prescribe.
- Designate and notify the Authority by name a registered agent, which is not an official of the bank, to act as its registered agent in the state.
- License fees US$10,000.00
- Annual renewal Fees US$10,000.00
Sectors
The SDR focuses on several sectors of financial activity: Banking Services (Investment Banking, Corporate Banking & Private Banking); Capital Markets (Equity, Debt Instruments, Derivatives and Commodity Trading); Asset Management and Fund Registration; Insurance and Reinsurance; Islamic Finance; Business Processing Operations and Ancillary Services.
Financial institutions may apply for licenses in the above sectors. Firms operating in the SDR are eligible for benefits such as a zero tax rate on profits, 100 per cent foreign ownership, no restrictions on foreign exchange or repatriation of capital, operational support and business continuity facilities.
Financial services in the SDR are regulated to international standards by the Somalia Financial Services Authority (SFSA).
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