This post uses hypothetical scenarios for illustrative purposes only. It does not describe any actual client, transaction, or representation, and is not legal advice.
Here is the Florida cross-border acquisition-financing story founders almost never hear before signing the LOI. A Latin American parent decides to acquire a mid-eight-figure Florida operating company. The buyer wants to fund the closing in dollars, out of a foreign-bank credit line the parent has held in São Paulo or Bogotá or Panama City for years. The Florida seller does not care about the source of funds. The wire clears; the deal closes. What almost nobody at the table notices is that the buyer just walked past a Florida-only structure that would have let the foreign lender book the loan through a Florida-based facility, exempt from state intangible tax, exempt from state documentary stamp tax on the promissory note, and outside the reach of the state’s usury statute for a defined class of borrowers. That structure is the International Banking Facility, or IBF, authorized under Chapter 663 of the Florida Statutes.
Most deal counsel — even good ones — do not run cross-border acquisition financings through the Chapter 663 lens because the statute reads like a bank-regulatory chapter and does not appear anywhere in the standard M&A checklist. The Florida Office of Financial Regulation licenses IBFs, edge acts, and international bank agencies. Cross-border M&A counsel look at the tax treaty, the state doc-stamp exposure on the note, and the local counsel opinion. They do not look at Chapter 663. And so a structural option that could shave meaningful basis points off the effective cost of the loan quietly disappears from the deal.
What Chapter 663 actually authorizes
Chapter 663 sits inside Florida’s Financial Institutions Codes and does three separate things. First, it licenses foreign banks to establish an international banking corporation, an international bank agency, or an international administrative office in Florida. Second, it authorizes a licensed institution to operate an International Banking Facility as that term is defined by Federal Reserve regulations under 12 CFR § 204.8 — the same IBF regime that has existed at the federal reserve level since 1981, but layered with a Florida-specific tax and lending overlay. Third, it exempts qualifying transactions booked through the IBF from a series of Florida taxes and lending restrictions that would otherwise apply.
The definitional linchpin is that an IBF may only extend credit to a “foreign person” or to the IBF’s own foreign parent, and the credit must be used outside the United States. That last phrase is where the M&A analysis gets interesting. If the Florida target has a foreign holding company — even one incorporated a week before signing — the loan can be documented as a loan to the foreign holdco, downstreamed as a capital contribution to the U.S. acquisition vehicle, and structured so that the initial use of proceeds is the acquisition of shares held by non-U.S. sellers. Cross-border deal lawyers who know their way around § 663 build the structure at the LOI stage. The rest of the market improvises at closing and either loses the exemption or spends the last week of the deal rebuilding the paper trail.
The state-tax delta most models never capture
Florida imposes a documentary stamp tax on promissory notes executed, signed, or delivered in the state. The rate is 35 cents per $100 of principal, capped at $2,450 for a note not secured by Florida real estate. For a $60 million cross-border acquisition loan, the doc-stamp exposure on the promissory note alone runs to the cap; if the loan is secured by Florida real property, the cap disappears and the full 35 cents per $100 applies — a $210,000 line item on a $60 million loan.
The IBF exemption is not automatic. It flows from § 663.06 and the coordinated exemption in Chapter 201 for notes executed by or with a Florida IBF where the loan qualifies under 12 CFR § 204.8. Cross-border deal counsel who route the note through the IBF, document the qualifying-borrower status on the note itself, and preserve the paperwork can eliminate the doc-stamp line item entirely. Deal counsel who paper the loan the standard way — foreign bank as lender, U.S. acquisition vehicle as borrower, no reference to Chapter 663 — pay the tax and move on. The delta shows up in the closing statement, not the LOI.
There is a second, quieter delta. Florida imposes a non-recurring intangible tax on obligations secured by Florida real estate — two mills, or 0.2 percent, on the secured principal. This tax was repealed as an annual tax in 2007 but survives as a one-time tax at recording. On a $60 million acquisition loan secured by a Florida commercial property portfolio, the intangible tax is $120,000. The IBF regime does not eliminate this tax for real-estate-secured loans, but the structure often lets the parties document the acquisition loan as unsecured or secured only by the equity of the target, which shifts the tax base entirely.
The usury question that only shows up if the deal goes sideways
Florida’s general usury statute is § 687.02, and the general corporate-borrower rate cap sits at 18 percent for loans of $500,000 or less and 25 percent for loans above that threshold. Criminal usury under § 687.071 kicks in at 45 percent. These statutes almost never touch a mid-market M&A loan on the face rate — but they are not zero-risk. Complex acquisition loans with earnouts, deferred fees, exit premiums, warrant coverage, and PIK toggles can push effective yield calculations into ranges that plaintiffs’ lawyers know how to argue about after a deal implodes. The IBF regime provides a defined statutory carve-out for qualifying loans, and courts have been willing to enforce that carve-out where the paperwork actually reflects the structure.
The usury exposure is not the reason to build the IBF structure. But it is a real reason not to leave the carve-out on the table when the structure is available.
The three-step decision framework at LOI
Cross-border deal counsel who want to preserve the Chapter 663 option should run three questions at the term-sheet stage.
First, is the ultimate borrower — or the ultimate holding company on the buyer side — a foreign person as defined by 12 CFR § 204.8? If the buyer is a U.S. subsidiary of a foreign parent, the structure is available. If the buyer is a Delaware fund with U.S. LPs and no meaningful non-U.S. ownership, the structure is not available and the analysis stops. Getting this answer wrong at LOI wastes six weeks of structuring; getting it right at LOI lets the tax lawyer build the whole flow-of-funds around the exemption.
Second, is the lender — or a lender in the syndicate — a licensed IBF, a licensed Florida international bank agency, or an offshore bank willing to book the loan through a Florida IBF affiliate? Most large Latin American and European banks with a Miami presence can do this; most middle-market U.S. commercial banks cannot. The lender selection at LOI matters more than the rate quote. A 25-basis-point cheaper rate from a bank that cannot book through an IBF may be $200,000 more expensive at closing once the doc-stamp and intangible tax exposure is priced in.
Third, is the use of proceeds documentable as “outside the United States”? For an acquisition of U.S. target equity from non-U.S. sellers, the answer is generally yes — the funds flow to the offshore seller. For an acquisition of U.S. target equity from U.S. sellers, the answer requires more creativity, and the structure often involves a two-step where the loan first funds a foreign holding company and the equity purchase from U.S. sellers happens further down the flow. This structuring cannot be done at the last minute. If the term sheet already commits to a specific flow of funds, the option is often lost.
The Florida Office of Financial Regulation posture
Florida OFR licenses and supervises Chapter 663 institutions. The regulatory posture in 2026 has been more permissive than restrictive — Florida has spent the last decade positioning Miami as a Latin American banking hub, and the state’s IBF regime is a significant part of the pitch. New IBF facility notifications must be filed with the Federal Reserve under 12 CFR § 204.8(a)(2), and Chapter 663 requires the parallel state notification. The mechanics are procedural; the substance is that Florida is happy to have the loans booked in-state.
The interaction with the federal Bank Holding Company Act, the International Banking Act of 1978, and the FBO enhanced-prudential-standards regime under Regulation YY is not something a general M&A lawyer needs to master, but it is something to flag for the acquisition-financing team. IBF loans generally do not count against a foreign bank’s U.S. asset threshold for enhanced prudential standards, which is another quiet reason large foreign banks like the structure.
Where this fits in the broader Florida cross-border M&A stack
Chapter 663 is not the only Florida statute that shifts the cross-border deal math. Florida § 692.213, which restricts real estate acquisitions by principals from a defined list of foreign countries, is now a required diligence item on any Florida real estate M&A with a non-U.S. buyer. The intersection with the IBF structure is worth flagging: a lender that cannot lend to a restricted principal cannot book the loan through the IBF for that transaction. Deal counsel should run the § 692.213 principal-status check before committing the acquisition financing to an IBF structure. For a walkthrough of the diligence framework Florida deal counsel apply to LOI-stage structuring, see the internal treatment at montague.law/business-law/m-a-mergers-and-acquisitions and the seller-friendly-vs-buyer-friendly deal-term primer at seller-friendly-vs-buyer-friendly-deal-terms.
The best current text on the federal IBF regime, and the natural authority to pair with a Chapter 663 memo, is the Federal Reserve’s IBF regulation itself at 12 CFR § 204.8. The state-side statutory text is available through the Florida Senate’s official statutes portal.
The pattern that quietly costs cross-border buyers real money in Florida is not the deal terms and not the tax treaty. It is the state-specific financing structure that never made it onto the LOI. Chapter 663 is one of two or three quiet Florida structures that meaningfully reprice a cross-border acquisition — and the option closes the moment the parties commit to a bank and a flow of funds. Deal counsel who ask the question at term-sheet stage preserve the option. Deal counsel who ask at the wire pay the tax.
If you are structuring a cross-border acquisition of a Florida target and want to walk through whether the Chapter 663 IBF structure fits the deal, feel free to reach out to my firm manager, Magda, at Magda@montague.law, or fill out our contact form. Mention you read this post.
— John
