Dominica is a Caribbean nation and a member of the Organisation of Eastern Caribbean States and the Eastern Caribbean Currency Union (ECCU).
Much in the same way as other ECCU member states such as Anguilla, Nevis, Saint Lucia or Saint Vincent and the Grenadines - Dominica operates a dual banking system where domestic banks and offshore banks are subject to a different set of banking legislation and are supervised by a different regulator.
Domestic banks are regulated and supervised by the Eastern Caribbean Central Bank (ECCB). They are authorised to deal in local currency, the East Caribbean Dollar (XCD), and generally serve both resident businesses or foreign businesses with a physical presence in Dominica and resident individuals. It is not common for domestic banks to serve offshore companies.
Offshore banks are regulated and supervised by the local offshore regulator - the Financial Services Unit (FSU). Besides offshore banks, the FSU also regulates Development Banks, Money Service Businesses, Insurance Companies, Credit Unions and the Nonprofit Sector.
Despite the small size of the jurisdiction, Dominica has one of the largest international banking sectors in the region by number of issued international banking licences. Currently, there are more than a dozen international banks operating. Actually, the offshore sector in Dominica has been entirely focused on banking in recent years, leaving aside the offshore corporate service sector, which had been diminishing substantially until the full repeal of the International Business Companies Act back in 2021 that put an end to the sector.
Offshore banks provide services in foreign currency to nonresident individuals and companies, and most of their client portfolio is made up of companies incorporated in offshore jurisdictions such as the BVI, Cayman Islands, Nevis, etc.
Dominica offshore banks do not tend to offer sophisticated services. Most banks focus on transactional banking i.e. account issuance, inward and outward payments, and prepaid instruments (e.g. prepaid cards). However, savings products such as term-deposits, and recently, virtual asset related investment services such as custody and exchange, as well as crypto investment products have been increasingly available.
In fact, Dominica is one of the few jurisdictions worldwide where banks are authorised to offer services in cryptocurrency.
One of the attractive points of Dominica is the availability of banks that provide services to one of the most underbanked sectors - the blockchain and cryptocurrency industry. In an effort to stand out from other financial centres, Dominica banks have given the ability to such companies, who generally struggle to access financial services, to be able to deposit proceeds from the disposal of cryptocurrency, and to make payments in fiat currency.
Dominica is one of the jurisdictions with a higher concentration of crypto-friendly banks. For instance:
Although all the above-mentioned banks are relatively new with licences issued during the last 5-10 years, they have had relevant traction, mainly due to the fact that their risk appetite tends to be more flexible than banks in other Caribbean financial centres such as the BVI or the Cayman Islands, onboarding companies of high-risk industries such as the aforementioned blockchain and cryptocurrency-related businesses.
Financial requirements are not demanding. Initial deposit amounts are between none to USD 35,000. To put the same in perspective, banks outside of Dominica offering services to companies in the crypto industry would require 6 or 7 figures initial deposit.
Dominica offshore banks also offer services to companies in other industries, such as international trade, tourism, agriculture, real estate, technology, manufacturing, professional services, financial services among others.
As provided above, their service offering mainly focuses on transactional banking, simple savings products, and cryptocurrency-related services. However, they also offer commercial and mortgage lending, and some banks even accept cryptocurrency as collateral for loans.
In conclusion, Dominica has been attractive recently for businesses in the cryptocurrency and blockchain sector, as well as for individuals whose source of wealth is derived from cryptocurrencies, as well as for other businesses and individuals that are considering banks that require low financial commitments and/or their business operations, or their sources of income are from, may be perceived as higher risk in other financial centres.
Dominica, officially the Commonwealth of Dominica, is an island country in the Caribbean, and it covers an area of approximately 751 square kilometers. It is situated in the Lesser Antilles, in the Windward Islands. It shares maritime borders with the French overseas region of Guadeloupe to the north and the independent island nation of Martinique to the south. The capital city and the largest city of Dominica is Roseau. The official language of Dominica is English, and the Eastern Caribbean dollar (XCD) serves as the official currency. However, the Eastern Caribbean dollar is pegged to the United States dollar (USD) at a rate of 2.7:1.
Dominica's history is rich and diverse, influenced by the indigenous Kalinago people, European colonizers, and African heritage. The island was originally inhabited by the Kalinago, and it was first sighted by Christopher Columbus in 1493. Over the centuries, Dominica passed through several European colonial powers (French and British), ultimately gaining independence in 1978 and becoming a sovereign nation within the British Commonwealth.
The country operates as a parliamentary democracy with a Westminster-style system of government. The President serves as the head of state, while the Prime Minister is the head of government.
Dominica actively participates in international affairs and is a member of various global organizations, including the United Nations (UN), the Organization of Eastern Caribbean States (OECS), the Caribbean Community (CARICOM), and the Organization of American States (OAS). It maintains diplomatic relations with countries worldwide and plays a role in global initiatives and development programs.
Dominica's economy is marked by a mix of agriculture, tourism, and offshore financial services. Agriculture includes the cultivation of crops such as bananas, citrus fruits, and root vegetables. In addition to its agricultural strengths, Dominica has invested in tourism, drawing visitors with its natural attractions, and a growing eco-tourism sector.
The financial services sector is part of the country's strategy to diversify its economy and reduce its dependence on traditional industries. Dominica allows for the formation of offshore companies, making it an attractive destination for businesses and entrepreneurs looking to establish international entities. It also provides opportunities for foreign investment in various sectors, including real estate, tourism, and renewable energy, creating attractive prospects for investors. Furthermore, Dominica offers a Citizenship by Investment Program (CBI) that allows qualified individuals to obtain citizenship by making an investment in the country.