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Obtaining an EMI license in Singapore: pros & cons

November 9, 2020

Technology is transforming Singapore’s payments landscape and has reduced the obstacles to entry to running a payments business. This, as well as the prolific adoption of the use of smart phones and tablets, has made it easier than ever for companies to obtain clients digitally.

Singapore has been better regulating Electronic Money Institutions (also known as an EMIs) in order to promote greater use of payment tokens, reducing settlement time and costs as well as broadening the scope of digital payment token services.

An EMI is a licensed financial institution whose business activities involve providing electronic payment services. The full license for a Singapore electronic money institution currently has no restrictions to either the sector of activities or trading period.

The MAS regulations for obtaining an EMI license are complex to adhere to, especially if the company founder is not currently residing in Singapore.

The requirements are relative to electronic payment services and stored value facilities in Singapore. Approval from and reporting to the Monetary Authority of Singapore (MAS) is required to obtain such a license.

Advantages of obtaining an EMI license in Singapore

The financial structure of an EMI provides solutions to current economic situations faced by international business transactions, internet banking provisions and international transfers accordingly.

Features of this financial structure in Singapore include:

  • The possibility of opening correspondent bank accounts around the world.
  • Enabling of accessible remote bank account opening for individuals and companies.
  • Issuance of Visa or MasterCard accounts linked to client and partner accounts.
  • Authorised payments to banks globally, including currencies such as USD/EUR/GBP.
  • Provides the option to accept SWIFT payments from any international bank account worldwide.
  • Decision-making on payments and account opening independently.

Permitted activities for EMIs holding a valid license in Singapore

  • The operation of payment systems.
  • Issuing e-money, the provision of operational services and closely related ancillary services.
  • The provision of services for the depositing/withdrawal of cash into a payment account for operations.
  • The provision of international monetary refunds.
  • Conducting payment transactions, the transferal of funds from a payment account.
  • Conducting direct debits, including standing orders.
  • Conducting credit transfers, including one off payments (even where the funds are covered by a credit line for a payment service user).
  • Issuing of payment instruments and/or acquiring of payment transactions.
  • Business activities other than issuance of electronic money.

Other tasks relating to the licensing of e-money institution which may require additional time include:

  • Preparation of business model and business plan.
  • Corporate structure, corporate management, and reporting arrangements.
  • Compliance, risk, and general Anti-Money Laundering framework.
  • Background of any Directors or Managers who will be responsible for the management of the provision of e-money and SVF services.

Requirements of EMI Licensing in Singapore:

The licensing process involves some requirements for approval with the MAS, however the process is relatively straightforward with regards to EMI activities in Singapore.

Generally speaking, the future EMI license owner must:

  • Be at least 18 years old and of sound mental capacity.
  • Own an initial capital of no less than USD $225,000 for the EMI license type.
  • Own a bank account for individual or corporate purposes.
  • Have available documentation showing income (such as tax declaration or certificate from tax control authorities).
  • Not have any previous injunctions or court orders in Singapore.
  • Provide evidence of a long-term lease or mortgage for the company office.

Documents for licensing electronic money services in Singapore

A list of the main documentation required to be submitted with the application includes:

  • A schedule of operations or a detailed business plan.
  • The company’s articles of association.
  • A forecast budget for the first three financial years, demonstrating that the EMI is able to operate soundly and employs the appropriate internal control systems, procedures and resources.
  • A description of the measures taken for safeguarding electronic money holders’ funds, and where payment services not relating to issuance of electronic money are to be provided.
  • A description of the management roles and internal control mechanisms applied, including administrative, risk management and accounting procedures.
  • A description of the internal control mechanisms established in order to comply with obligations in relation to prevention of money laundering and terrorist financing.
  • A description of the structural organization, including the intended use of branches, agents, natural or legal persons through which the electronic money institution intends to distribute or redeem electronic money or other entities to which activities will be outsourced.
  • Particulars of all individuals holding qualifying holdings in the authorised capital of the electronic money institution, the size of their holdings in the authorised capital and/or voting rights.
  • The identity of directors, including the persons responsible for the management of the electronic money issuance activities of the electronic money institution as well as evidence that they are of good repute and meet the requirements set forth by the legislation.
  • The registered office address of the company that can start receiving correspondence from the time the license is granted.

Eltoma Corporate Services can assist with the following activities according to the local requirements and legislation:

  • Providing qualified legal assistance.
  • Liaising with MAS.
  • Filling out and submitting the required documentation and applications.
  • Full legal support and representation of client interests with MAS.
  • Incorporation of companies and the establishment of office spaces in Singapore.
  • Creating a legal opinion for the payment system, working with cryptocurrencies, banking systems.

After acquiring the license, Eltoma can deliver it locally or using a secure international courier.

If you are interested in obtaining your EMI license in Singapore, contact us, we would be happy to provide a free, no obligation consultation.

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