EMI license in UK

Electronic money has become an integral part of our financial landscape. Fintech projects or businesses providing monetary services must acquire the appropriate license to operate in a legal field. The attention of many entrepreneurs is drawn to the United Kingdom because an EMI [Electronic Money Institution] license obtained in this jurisdiction enables businesses to enter the global arena.

What is EMI License UK

EMI is a financial organization that, with a UK e-money license, allows companies and individuals to offer services such as:

• issuing electronic money;
• opening IBAN accounts;
• issuing payment cards for VISA and MasterCard systems;
• holding client funds in accounts;
• conducting payments in various world currencies;
• executing customer fund transfers, including credit-related transactions. 

The spectrum of services is quite broad and, in many aspects, resembles traditional banks. However, e-money issuers UK are prohibited from engaging in lending activities and accepting customer funds as deposits.

Types of EMI Licenses in the UK

The Financial Conduct Authority (FCA) oversees licensing in the kingdom, issuing two types of payment permissions:

• AEMI [Authorized EMI] is considered full licensing, allowing a legal entity to provide services in the UK and, after a simplified passporting procedure by notifying the regulatory body of another country within the EEA and and Gibraltar. In practice, a crucial factor for the possibility of operating in other countries is the opening of correspondent accounts. Since the British EMI license is respected worldwide, this is not a problem. The share capital of such an organization must reach at least €350,000 without turnover limitation;
• SEMI [Small EMI] has restrictions on the size of payment services: limitations on the average amount of outstanding electronic money per month over the year — €5 million and no more than €3 million in unrelated payment transactions. Its validity is restricted solely to the territory of the United Kingdom, and there’s no requirement for share capital.

Advantages of E-Money License UK

Companies choose the British jurisdiction for valid reasons. Many appreciate the reliable regulatory framework and the opportunity to provide services worldwide thanks to AEMI.  Entrepreneurs are also attracted by the transparent tax system and low tax rates.

Procedure for Obtaining E-Money Licence UK

To obtain an e-money UK, certain requirements must be met:

• register the company within British jurisdiction;
• employ directors who are British residents. There are recommendations regarding the number of local managers — they should be at least half of the total team size;
• lease a physical office;
• open an account with a local bank;
• submit an application and the required set of documents to the regulator. 

The Anti-Money Laundering (AML) officer must also be a British resident.

The regulatory body requires the submission of these documents:

• the organization’s articles, a detailed business plan, and a description of the operations the company intends to offer clients;
• financial forecasts for several years;
• organizational structure details, including information on founders and management, validating the relevant education and work experience in this field for the leading individuals;
• proof of share capital payment and the legitimate source of finances;
• prepared risk analysis, AML, KYC policies, and multiple internal policies and procedures.

If necessary, the FCA may request additional documents. The decision-making period may vary depending on the number of queries from the regulator. On average, the licensing procedure takes about a year.

E-Money License UK Cost

When obtaining an electronic money institution UK, the category must be considered — AEMI or SEMI. SBSB experts calculate each project individually, taking into account the company type, projected turnover, and other aspects.

If you need to obtain a UK e-money license, contact SBSB Fintech Lawyers. We provide full legal support for fintech projects, offering individual solutions tailored to each client’s business model. Our experts will prepare the necessary documentation for licensing according to British legislation and assist you in successfully launching your project.