Electronic Money Institutions (EMI) – How to obtain a license in Cyprus?

The Republic of Cyprus Electronic Money and Payment Services Law (81 (I) 2012) (hereinafter referred to as “the Law”). This implemented provisions of the EC Directive (2009/110/EC). Further, which relates to the supervision of the business of Electronic Money Institutions (EMI).

With the adoption of the Law, the activities of electronic money issuers in Cyprus are subject to the regulation. Also, supervision by the Central Bank of Cyprus (hereinafter referred to as “the Regulatory Authority”).

What is the term “Electronic Money ”?

The term Electronic Money (as well as electronic cash, or digital cash) refers to transactions of funds carried out using electronic communications. Furthermore, should not be confuse with block-chain currencies, i.e.crypto currencies. Electronic money can be in the form of debit or credit. Digital cash can be in the form of a unique currency. Which in order to be receive and use, requires the conversion of an amount of a recognize currency into a digital form. Such a conversion is similar to the purchase of foreign currency.

Electronic Money can take the form of checks, gift certificates. Also, any other similar form of value. Electronic Money can be issued by banks, NGOs, or other organizations.

The fundamental difference between Electronic Money and ordinary money held within a bank account is: That Electronic Money is a means of payment issued by an organization (a monetary surrogate). Also, whereas ordinary money (cash or non-cash) is issued by the Central Bank of a country.

Electronic Money Institution (EMI)

An EMI is an institution authorized by the Regulatory Authority to issue Electronic Money.

In Cyprus, the regulatory authority issuing EMI permits is the Central Bank of Cyprus. Further, in accordance with the following legislative provisions:

Laws on electronic money Law 81 (I) 2012.
Directive 2009/110/EC of September 16, 2009 on the establishment. Also, proper Supervision of the Commercial Activities of Organizations. Further, that issue Means of Payment in the Form of Electronic Money.
Directive (EU) 2015/2366 of November 25, 2015. This on payment services in the domestic market.

E-money license

Also, a company applying for E-money license to provide services in relation to Electronic Money. Further, this must be registered in the Republic of Cyprus and its head office. Also, locate in the Republic of Cyprus. According to the policy of the Central Bank, two executive directors of a company with a PI/EMI license. Further, must be residents of the Republic of Cyprus and have the appropriate education and work experience.

The legal entities entitled to provide payment services are:

Banks.
Cooperative Credit Institutions.
Postal service providers acting on the basis of the relevant legislation.
Electronic Money Providers (EMI).
The European Central Bank and National Central Banks when they are not acting as a currency control authority. Also, other government authority.
Also, Government departments and local authorities when they function as public regulators.

Types of services that are allowed by Electronic Money Institutions (EMI) after obtaining a license

Services that allow the deposit of cash to a payment account. Also, perform all operations necessary to work with a payment account.
Services that allow the withdrawal of cash from a payment account. Further, perform all operations necessary to work with such an account.

What documents are required to obtain a license?

Corporate documents issued by the Registrar of Companies of the Republic of Cyprus.
A summary issued by the relevant authority explaining the main legal characteristics of the applicant.
Personal documents from persons who will perform an important function (board of directors, licensed services):
Certificate of no criminal record
Certificate of non-bankruptcy
Resume
Certified copy of the passport
Documents from shareholders and ultimate beneficial owners (UBOs) confirming their legitimacy, and details of the acquisition of shares, including evidence of the source of funds and the scheme of the ownership structure of shares.
The structure of the organization.
A detailed business plan.
Proof of minimum capital.
Internal operating manual, which includes:
Procedures for protecting the funds of electronic money users.
Management and internal control mechanisms, including anti-money laundering and terrorist financing.
Description of procedures for monitoring, processing and tracking security breaches and customer complaints related to security.
Description of the processes of organizing, monitoring, tracking and restricting access to confidential payment data.
Description of business continuity mechanisms.
Description of the principles and concepts applicable to the collection of statistics on performance, transactions and fraud, including supporting documentation.
Security policy document.
Offered professional liability insurance or equivalent warranty (if applicable).
The latest verified reports (for existing companies).
The most recent management reports (for existing companies)
The EMI must have at least € 350,000 (Three Hundred and Fifty Thousand Euro) of his own capital at the time of filing the declaration for obtaining a license.