The financial industry today is developing at a tremendous speed. One of the main directions is Electronic Money Institution (EMI). Many experts believe this creates a real revolution in financial services. To operate legally, you have to obtain an EMI license. It will avoid problems with the law and increase the level of trust on the part of customers.
What is EMI?
In simple terms, EMI is a legal entity or organization that has received an operating license to issue e-money. It is a kind of replacement for banks, which differs in regulation and operations.
EMI includes various exchanges, electronic wallets, and other payment systems that serve their customers on the Internet and do not work with ATMs. The permit allows them to provide traditional PSP services and issue e-money.
It is worth noting to understand precisely that these are not banks. Many people who previously ran a business did not even think they had once used this particular technology.
What services does it provide?
There is a range of services offered by EMI, including:
- Launch and distribution of electronic money;
- Currency exchange;
- Direct debit or credit transfer;
- Storing information about transactions and much more.
However, do not expect that with EMI, you will be able to:
- Open bank accounts;
- Create a deposit;
- Get a loan;
- Perform transactions.
Thus, EMIs are financial institutions through which you will be able to exchange currencies and make various electronic transfers or store savings.
Why is getting a work permit so important?
An EMI license is a document issued to legal entities by the relevant government authorities. It allows various companies to provide electronic money security services.
When establishing an EMI institution, you must provide a license from the FCA. In many countries, government agencies are concerned about the safety of their citizens and regularly update legislation to prevent fraud and money laundering. To not get a huge fine and other problems with the law, you need to apply for a license.
While no separate authorization is required to provide payment services, EMIs must notify the FCA of the payment services they intend to deliver. It will prevent them from being listed as potential scammers.
When applying for a license, EMIs must prepare a set of documents in advance, which includes:
- data on the company’s operations;
- business plan;
- initial capital requirements;
- security measures;
- methods and processes of establishment;
- business continuity measures;
- data protection measures;
- information about shareholders;
- subcontracts and some others.
Regulatory authorities need to make sure that your company operates legally and has enough resources to continue its activities. In addition, the owner and founders must not have a criminal record.
The main criteria for obtaining a license are high trust in the company and its employees. If you have not previously had problems with the law and taxes, and you have not had many complaints from clients, then the probability of obtaining a license is very high.
Today there are several countries where you can get such a license. However, Lithuania and the Czech Republic create the most specific conditions. It is explained that the labor cost here is slightly lower than in other EU countries. There is no unnecessary bureaucracy. The requirements for obtaining a work permit here are as simple as possible.
In addition, these countries care about developing the entire IT sector, so they offer low taxes for EMI. In addition, the speed of processing a license takes only a few weeks, while in Germany, Malta, or other EU countries, it can take up to half a year.
How can I speed up the process of getting a license?
The process of obtaining an EMI license takes only a few weeks if all the papers are in order and your company complies with all the requirements of government agencies. If they notice such and such problems, then settling all issues may take several months.
To prevent this from happening, you can contact an agency that specializes in assisting in obtaining various licenses in advance. So the specialists will double-check the list of documents, make sure that everything is done correctly, and help draw up the application accurately. In addition, if you own a foreign company, they can represent your interests in state bodies, but you need to draw up a power of attorney in advance.
EMI is an up-and-coming area, so new companies are regularly created here. For them to work legally, they should get a license. It will not take much time and effort if you do it in Lithuania or the Czech Republic. Of course, there is also a legal framework in other countries that allows EMI to obtain licenses, but here it is much more difficult and longer to do so.