Working legally and paying taxes is essential because you will have big problems with the law without this. The EMI license provides the ability to issue digital coins and make payments in Europe. With such permission, the company will be able to carry out activities similar to standard payment institutions: the company will conduct transactions and open client sub-accounts within its bank account, allowing the creation of digital vaults.
Introduction
If an organization has an EMI permit, their clients can exchange fiat funds for virtual currency, which is issued by this company, and have the opportunity to store their funds in electronic storage. In addition, customers are allowed to purchase various products and carry out financial transactions.
You can get such a crypto permit in any country in the world, but licensing in one of the Europe will allow you to enter the international crypto market thanks to the high reputation of the EU and gain access to SEPA – a payment service through which you can make financial transfers in euros to any bank account in borders of the European zone. Lithuania, Malta, Great Britain, and others are the most popular jurisdictions for resolving EMI.
Who needs to be licensed by EMI?
Before answering this question, it is necessary to understand the difference between a company and a traditional bank: a company (an e-money institution) cannot legally hold deposits or provide lines of credit against customers’ deposits. EMI companies are intended exclusively for making payments and servicing clients (legal and individual).
So, if a company plans to engage in a complex of the following types of activities, then it must obtain a permit :
- engage in the issuance of digital currency;
- provide services that will use the issued virtual currency as a means of payment (making financial transfers and payments for goods and services);
- exchange digital coins for fiat funds;
- engage in management activities of payment systems;
- open sub-accounts for your clients within your account with the ability to place clients’ financial resources on it and withdraw cash from it;
- conduct activities related to the issuance of loans, but only from one’s capital (issuing loans at the expense of client funds entrusted to the company is prohibited by law);
- link clients’ bank cards to their subaccounts within the company’s bank account and issue Visa and MasterCard cards.
An EMI permit provides such a vast range of financial services.
Benefits of permitting
This permission has several advantages for financial companies. It provides the opportunity to access the international financial system SWIFT, which can significantly expand the organization’s activities’ territory: making payments and transfers with world banks and in various currencies is possible. It is possible to open accounts remotely, and the company’s clients can receive IBAN accounts. You can issue VISA and MasterCard bank cards for your clients.
Are there requirements that must be met?
In each European country, the local regulator checks the organization’s founders who applied for permits. In addition, each jurisdiction has its requirements, which may vary. Below, we list the requirements specific to each European state.
The generally accepted PSD2 requirements for all European jurisdictions require the following:
- The office must be technically equipped (including the necessary software) by established standards;
- it is necessary to introduce a system into the company’s program of activities that will take into account the occurrence of possible financial and cyber risks;
- provide for an AML and KYC policy using a client identification procedure; appoint responsible officers for these control categories;
- create a technological base, including the possibility of creating sub-accounts for clients;
- the company’s activities must include mandatory accounting (exchange transactions, payments made, etc.).
The organization must have at least two directors who reside in the European Union. For all hired employees, it is necessary to confirm the appropriate education and practical experience in the financial field of crypto, and the management team must also present certificates of no criminal record and debt. The authorized capital must be at least 350,000 euros. To carry out the company’s activities, opening a local office and providing a lease or purchase/sale agreement is necessary.