UK Electronic Money Institution License (EMI)

UK became a hub for many well-known electronic money institutions due to transparent and cutting-edge legislation, ease of doing business and its location.
Electronic money institution license UK (or e-money)  is a financial institution licensed for taking part in services involving e-money and online payment. Here, it must be noted that license of e-money doesn’t remain limited to the area or time of activities. As a result, an individual holding an electronic money institution license in the United Kingdom would be eligible for providing services throughout the EEA or European Economic Area without the need of undergoing further licensing process in any of the member states.

Upon acquiring the license in the UK, an e-money institution can offer services in all other member states of the European Economic Area either by setting up branches or through passporting.

Law in the UK allows English companies to register themselves and acquire the required financial licenses from the Financial Conduct Authority (UK’s financial regulatory body). This allows to set up an e-money institution in just 12 months (it’s the legally approved maximum time) and begin global operations using their respective International Bank Account Numbers (IBAN). In addition, they can also move forward and obtain membership in SEPA, SWIFT etc. and issue their personal payment cards.

The only major characteristic responsible for making e-money institutions different from traditional banks is that unlike banks (the traditional credit institutions) electronic money institutions don’t possess the right of issuing loans and keeping deposits for accumulating interest. The electronic money institutions are also not required to abide by banking regulations and never become subjected to related supervision.

These institutions need to pay an authorized amount between 0 € to 350 000 € for acquiring the license depending on a class of the license. Electronic money institution in UK is granted only when the English financial market’s regulator provides an official mail confirming the approval of application. The company’s account must always have the authorized amount (350 000 €); it’s actually the minimum balance the account should have for remaining functional.

This particular financial structure appears to solve some major issues of the modern-day economic world. It would make large financial transactions, international transfers (particularly those done in US dollars), and other banking services simpler.

Here are some more possibilities the structure brings with it:

  • The possibility of receiving English SWIFT;
  • The chances of issuing IBAN accounts to the e-money institution’s clients;
  • The option of opening account from a remote location (for that users would require an Internet connection);
  • The chances of issuing payment cards (MasterCard) linked to respective customer accounts;
  • The possibility of making payments with traditional banks in different parts of the globe in various currencies including GBP, EUR, and USD;
  • The chances of allowing acceptance of payments from various international accounts under the SWIFT system;
  • The option of making independent decisions when it comes to opening accounts and making payments;
  • The chances of having correspondent accounts anywhere in the world.

Steps of the licensing process

  • The process begins with preparation of various draft documents. This preparation is done both by the owner of the institution and Private Financial Services experts;
  • This is followed by formation of the institution. Subsequently, a bank account is opened and various other corporate matters get resolved;
  • Next, the application seeking the required license is submitted along with the licensing fee and licensing documents;
  • Upon receiving the above documents, fee, and application, the financial regulatory body makes the applicant face an official enquiry;
  • The FCA takes its decision; in other words, the body decides whether it would be pertinent to issue license to the e-money institution;
  • Decision of the FCA regarding the issuance of EMI license;

It has been found that the process of establishing the company needs around one month to complete. The licensing process, on the other hand, would make the company owner wait for another two to six months (the official term is of three months, which gets prolonged by another three months in most cases).

Tasks related to this licensing procedure that often need additional time are as follows;

  1. The process of preparing a business plan and business model;
  2. Finding the right professionals for adorning various management positions (it often becomes difficult to find people with the right kind of experience and qualification);
  3. Preparing descriptions of IT systems, accountancy systems, etc;
  4. Entering contracts with third parties like audit firms;

Advantages of establishing electronic money institution in the UK

  • Financial services in the UK are exempted from VAT;
  • These institutions allow remote identification of their clients (both legal entities and individuals);
  • No restriction is placed on the company’s turnover;
  • These institutions are allowed with work with business in EEA and EU countries.

Further assistance for running EMI might be also provided from our side.
EMI licensing in the UK is one of the fastest and easiest options in comparison with other EU member states.
We have successfully assisted more than 20 companies to get their EMI licenses in the UK.

We can also assist with the following services:

– SEMI license (Small Electronic Money Institution)
– Account information service (AIS) and payment initiation service (PIS) licenses
– Obtaining active/passive SWIFT/BIC
– Obtaining issuing license for VISA/MasterCard/China Union Pay/American Express
– Obtaining acquiring license for VISA/MasterCard/China Union Pay/American Express
– and many other services for electronic money institution license UK

Please contact our specialists to get more information on electronic money institution license UK, licensing procedures, requirements for management board/shareholders and costs.

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