Hungarian jurisdiction represents a significant part of the EU’s management (business) field, and all EMIs are encompassed by the remit of the applicable EU law (particularly, EU Directives 2009/110/EC and 2015/2366). Any platforms that carry out issuance or usage of e-funds can only be established as an EMI. In line with the law, each οrganization must apply for a Hungary EMI license to start delivery of its services with e-funds in Hungarian jurisdiction.
Overview of the legal framework
The provision of services associated with e-funds within the Hungarian legal framework is allowed to organizations that successfully finished the authorization process at state Financial Supervisory Authority (FSA). Grounded on laws laid down by the state Parliament (particularly, Act CXII, Sec. 6C), prior to enabling the delivery of business services, the regulator necessitates businesspersons to form legal entities in the jurisdiction. The types of business οrganization of the firm can be either a LLC, or a branch of a corporation with a EU headquarters. The minimum capital condition is EUR35,000 and it should be paid in total amount.
How to acquire a Hungary EMI license
If a legal entity is not formed in Hungarian jurisdiction, however, the other EU member-state, it requires to assign a local attorney-at-law or a branch of an applicant’s domestic bank to represent the entity. Under the Hungary EMI license requirements, it is obligatory to:
- place the authorized stock into the set-up company.
- submit a detailed overview of the company and provide policies of the institution, as well as proof of the money for business activity.
- ensure the qualifications of the upper management and staff which must be evidenced by appropriate documentation (for example, diploma).
Applicants seeking to acquire a license will be expected to submit the next documentation:
- a detailed overview of the systems and instruments used to carry out services;
- an operational programme for the coming three years;
- documents of the legal entity and official papers of the directors;
- an overview of risk management systems;
- a proof of instruments to avoid ML/TF crimes and a list of measures that will be undertaken to avoid the possible risks;
- data about auditors, agents, and partners;
- papers drawn not earlier than one month prior to completing the application forms that the entity is in a condition of bankruptcy or has any liability in terms of taxation or any debts.
In addition, an entity that applies for a license should make up a declaration where it guarantees that its business operation does not entail any threats. This list of necessary documents is not full, the FSA may ask for other official papers to understand or clarify certain aspects, so applicants should better look for expert advice.
Generally, the procedure for issuing the EMI license in Hungary takes 3 months but can be proceeded for up to 6 months. The fee of administrative services for granting the authorizations for service delivery in line with the Decree of the Ministry of Finance No. XII/2002 is at least EUR3000, subject to the extent of the license. Also, the licensee must execute additional obligations to ensure a transparent and fully compliant operation.
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