Eternity Law International — News — Overview – EMI in Cyprus

Overview – EMI in Cyprus

Published:
August 3, 2021

E-Money Institutions in Cyprus (also known as EMI in Cyprus) are entities that licensed to provide financial services to third parties, store their funds on special segregated accounts and issue debit cards. Being more flexible and fast in their operations, EMIs are a great alternative to traditional banks. EMI’s clients can also execute payment transactions in two ways: using a platform or a debit card. Being authorized, an EMI can execute its services in all countries of the European Union on a cross-border basis.

EMI in Cyprus: overwiev

To obtain authorization as an EMI, an applicant shall be a legal entity incorporated in Cyprus. The main precondition of granting a license is having a registered head office within the territory of the country. An EMI also falls under the regulation of the Central Bank of Cyprus (CBC) pursuant to the Payment Services Directive and the E-Money Directive which integrated into Cyprus legislation. Above all, such a license can also be issued by any country in the EU. The license petitions normally processed within 90 days of receipt of a duly filled out application form. In case the request is rejected, the regulatory body shall provide a proper explanation to a candidate.

To clarify, the license issued if an EMI has robust governance arrangements, including a coherent organizational structure with explicit and transparent lines of responsibility, efficient risk management processes, and control mechanisms. But the applicant may be asked to provide a reference letter for banks or the government proving high rates of return (RoR).

According to the Cypriot legislation, the right to carry out e-money services given to:

  • Banks approved by the CBC or any other EU regulatory body;
  • the European Central Bank (ECB) and the national central banks (NCBs);
  • Cooperative financial institutions;
  • Government bodies;
  • E-money and postal payment services providers;
  • EMIs, having obtained proper authorization to carry out their activity.

How to apply for the EMI license in Cyprus:

The applicants should also fill out the application form for authorization of an EMI. The request must include all the necessary information and documentation.

It is necessary to submit:

  • The operational program with a projected set of activities;
  • A business plan, comprising the structure, organization, and set of policies, processes, and operations of an establishment with a projected budget for the first 3 fiscal years of activities as an EMI;
  • Proof that the applicant has the necessary starting capital, the established minimum of which is 350 thousand euros;
  • Information about all directors, controllers, managers, shareholders or partners;
  • Evidence of good reputation, the legal status of the candidate and his/her headquarters address;
  • A copy of the Articles of Incorporation and the Memorandum or the partnership deed;
  • Provision of other necessary justifications.

The CBC may claim the applicant to submit additional information, since it may regard it appropriate to determine an application for a license.

Services provided by an EMI

EMIs approved to perform the number of activities, contingent on the prior authorization of the CBC:

  • Provision and operation of payment services;
  • Credit-granting;
  • Conducting other activities (payment cards issuance and digital wallet accounts creation; provision of currency exchange services; carrying out wire payments, IBANs issuance, etc.), subject to the applicable laws controlling such activities.

It is worth noting that the EMI license welcomes development in the sector of establishing new tools for working with digital money, also providing customer support, etc. EMIs that have obtained a license can receive the cash analog of transactions in digital currency, use e-payment means or resell products.

The establishment of an EMI in Cyprus has many benefits.

  • The government’s loyal position and attractive tax system create excellent conditions for setting up EMIs in this country. Moreover, Cyprus is a gateway to the European Union granting EMIs the right to perform their activities across all 27 countries.
  • The corporation tax rate for net earnings from EMI’s activities is only 12.5%, which is also the lowest rate in the EU.
  • No taxation on earnings from the sale of titles and received dividends.

If you are also looking to obtain an EMI license in Cyprus, Eternity Law International can also offer you its legal, technical, and business expertise and consulting support. We also have ready-made options.

Do not hesitate to contact us if you are looking for an available EMI licensed company in Cyprus.

You can also see our offers in category ready-made companies and licenses for sale

We also have multiple options worldwide!

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