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Electronic Payment License in Gibraltar

Electronic Payment License in Gibraltar

Electronic Payment License in Gibraltar
An electronic payment license in Gibraltar is used by companies that offer financial services and related products, but do not operate as a bank (and do not include the word “bank” in their name).

Our company formation agents in Gibraltar assist investors both with company incorporation matters and with licensing issues. We can help those interested apply for a license that allows them to engage in payment services.

The electronic payment license is only required for businesses engaging in certain types of activities. If you are unsure of the licensing requirements for your company, you can discuss specific aspects with one of our agents.

What companies need an electronic payment license in Gibraltar?

A company that will engage in the processing of payments, or in other words, a payment business. This means that the company will be able to accept funds and convert them into e-money, but it will not manage them. The electronic payment license holder would also be able to offer a number of other digital financial services, focused on facilitating electronic money transactions or transfers.

A cryptocurrency company will not fall under the scope of an e-money company that offers payment processing services and other financial solutions, nor will it need such a license to launch an ICO. The distributed ledger technology (DLT) license is needed by companies in this field, and it is applied for separately by the crypto company.

If you would like to know more about Gibraltar company formation, our team can walk you through the main steps.

What are the main conditions for e-payment licensing?

The license for electronic money institutions, issued by the Gibraltar Financial Services Commission is the one that allows companies to engage in e-money activities. Gibraltar allows for two such licenses: the authorized e-money institution, and the registered e-money institution.

The company (in this case, named the e-money institution) can issue and redeem e-money and make electronic payments via an establishment, an agent or a distributor.

As for any type of license, companies applying for an e-money institution license will need to meet a set of criteria:

  • The types of services they provide: the company will only be able to engage in the services permitted by the license it applies for;
  • Proof of solvency: the company will need to meet a clear set of capital requirements; please see below for more details;
  • Safeguarding principles: the company will need to ensure that the customer’s funds are safeguarded at all times; the funds need to be covered by an insurance policy or a similar guarantee;
  • Application submission: the company will need to apply for the license by submitting a number of relevant documents, among which accounting documents, a business plan, as well as questionnaires filled in by individuals with a relevant position within the company.

What are the costs for an electronic money institution license in Gibraltar?

Companies that apply for this type of license will need to observe two types of financial obligations:

  • Capital requirements: the company will need to have an initial and ongoing capital of EUR 350,000 or 2.2% of the average outstanding electronic money (whichever is highest);
  • Capital requirements for small or registered e-money companies: an initial and ongoing capital of 2.2% of the average outstanding electronic money;
  • Licensing fee: £27,500 for an electronic money institution and £250 for the notification to appoint an agent for such as institution;
  • Extension fees: a £3,500 fee applies for a company that wishes to extend its permitted activities; an annual fee also applies, however, it is not due until the company’s initial licensing application is approved.

For more details about the electronic money institution license, used as an e electronic payment license in Gibraltar, please reach out to our team.
Our partner lawyers in Gibraltar can also answer your questions about the relevant acts and regulations that govern electronic money institutions.