The norm should be fulfilled by Czech payment systems and institutions, entities issuing electronic money (EMI) as well as non-resident providers. Otherwise, the main regulator – the National Bank of the republic, will not issue an e-money license or revoke an existing one. The main changes relate to the conduct of business — at least part of it should be carried out within the country. However, other requirements have been placed on issuers and providers. The license type dictates the specific conditions.
Types of Licenses Issued in the Czech Republic
According to Czech law, EMI institutions and payment providers (PSP) are required to obtain separate permits. The e-money license is issued to legal entities that have been granted the right to issue electronic funds and / or make payments with their participation and money in the traditional form. Upon being granted a permit, the organisation may:
- accept them as payment;
- accumulate them, divide them into parts for different purposes;
- convert them to different currencies;
- sell them by transferring the received traditional funds to bank accounts;
- store them, etc.
E-money may be on physical smart cards and servers in virtual form. The Czech Republic grants permits to issue and use electronic money to legal entities having in the country a fully-operational “physical” office or representative offices of organisations located in the EU. In the first case, a full EMI permit is granted, and in the second case – a part SEMI. Once having obtained a full license, the company may carry out operations in any country in the Eurozone — all that is required is to notify the main regulator of the respective country.
Requirements for License Recipients
The procedure of obtaining an e-money license is one that is carried out as per the rules of the Republic, taking into account the requirements of the PSD2 Directive. Thus, the permit is issued only to legal entities registered as commercial enterprises and having a physical office or representative office in the Czech Republic. The minimum capital for issuers of electronic funds to receive a full license is 350 thousand euros. Other requirements include:
- provision of a package of legal entity documents (memorandum and articles of association, registration certificate, etc.) and a detailed plan for at least three years;
- proof of competence of the directorate — management must have well-proven experience in the e-money industry;
- taking security measures to protect the money and personal information of customers — including under the rules of the GDPR, if the data of EU residents is used;
- prepare descriptions of policies and instructions to prevent criminal money laundering (to comply with AML legislation);
- provide a description of the technical means ensuring system operation, etc.
Prifinance Support
Following changes in the legislation, the Czech Treasury Department is now more scrupulous than usual in checking documents on compliance with AML standards, especially if the service provider deals in cryptocurrencies. This necessitates professional support for successful licensing and operation in the republic. Prifinance is ready to provide this support and more.
Our experts have extensive experience in the registration and commissioning of payment systems, EMI operators, cryptocurrency funds. We will take on the organisational side of licensing, develop the optimal tax model, necessary policies and help you to meet all the Czech Republic and EU requirements.
