Investment Opportunity

What are International Financial Entities?

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Puerto Rico International Financial Entities (“IFEs”) are essentially international banks organized and licensed in
Puerto Rico. They are licensed and regulated by the Puerto Rico Office of the Commissioner of Financial
Institutions (“OCIF”) pursuant to Act No. 273 of September 25, 2012, as amended (the IFE Act) and Regulation
No. 5653.

The IFE Act authorizes IFEs to engage in specific banking and financial activity in Puerto Rico
(Authorized IFE Activities) with non-residents of Puerto Rico. There are some activities allowed with Puerto Rico
residents, but they are the exception. They remain a so-far-under-exploited opportunity for U.S. Banks to reduce their effective tax rate.