An Electronic Money Institution (EMI) license in Cyprus is a form of authorization issued by the Central Bank of Cyprus, permitting companies to issue, store, and manage electronic money (e-money) and provide related payment services. To secure an EMI license, companies must fulfill specific conditions, including adequate capital, a solid business plan, and a competent management team with a proven track record.
The Cyprus Electronic Money Laws of 2012 and 2018 regulate the issuance, storage, and management of e-money and payment services. These laws incorporate the EU Directive 2009/110/EC and EU Directive 2015/2366 into Cypriot legislation. The 2012 law outlines the legal framework for EMIs, establishing criteria for licensing, such as capital adequacy, proper management, and the need for robust systems and controls. The 2018 updates brought further improvements, such as mandatory compliance with the revised Payment Services Directive (PSD2), strong customer authentication, and enhanced consumer protection measures like adequate insurance coverage and clear communication of customer rights.
The following requirements must be met to establish an EMI in Cyprus:
- EMIs must maintain a minimum capital, currently €350,000 in Cyprus.
- EMIs must obtain authorization from their home country and comply with relevant regulations.
- EMIs must provide clear information on e-money products and services.
- EMIs must safeguard customer data and transactions.
- EMIs must follow regulations to prevent illegal activity such as AML and CTF procedures
The process to apply for an EMI in Cyprus is the following:
- Gathering required documents, including a business plan, financial forecasts, and due diligence reports.
- Submitting the completed application and documentation to the Central Bank of Cyprus.
- The Central Bank assesses the application against regulatory criteria within three months of a duly submitted application.
- If approved, an on-site inspection ensures the applicant’s systems and controls are in place.
- The EMI license is granted Upon successful inspection and compliance, enabling operations.
When an EMI license is granted, the EMI will be able to issue e-money through products like e-wallets and prepaid cards, provide payment services, including online payments and direct debits, remit services for international money transfers, provide mobile banking solutions like mobile wallets while ensuring customer service and compliance with AML, KYC, and other regulatory requirements.
At Christy’s Our banking practice advises financial institutions and corporate clients on all aspects of domestic and international bank finance. We advise on secured lending, project finance, trade finance, asset finance and restructurings. We represent local banking institutions and have extensive experience in banking litigation and debt restructuring.
