Obtaining a SEMI license: Process and Main Steps

SEMI permission regulates the electronic money business and all related services. Without this document, the company does not have the right to enter the market of payment systems of the European Union and other market spaces. The laws of global jurisdictions allow two types of permits.

SEMI permission provides limited options to the issuer of electronic money, but obtaining it is somewhat simpler. EMI licenses are higher level documents.

The qualification requirements are more stringent, but you will be able to run a payment system/electronic money business without any special restrictions. Below, we’ll take a look at how to obtain SEMI license and other peculiarities.

SEMI license

Our company is professional experts in the field of establishing and licensing commercial structures. We work all over the world and in all business areas. Our goal is to make starting your business efficient and simple. We have offers for ready-made SEMI licenses in UK, Denmark, Sweden and other countries.

Significance of SEMI license: Breakdown of Steps for SEMI Getting and Acquisition

A financial company with a SEMI-license is ideal for you if your business plan is related to currency exchange, circulation of electronic money or cryptocurrencies. This authorization provides a wide range of solutions for your business. Specifically, according to SEMI regulations, this certification covers the following categories of services.

  1. Accepting and sending payments from/to customers.
  2. Processing electronic money and transferring funds on behalf of third parties.
  3. Debit card issuance.
  4. Creating a merchant solution.
  5. Issuing your own e-currency.

SEMI has a processing limit of no more than EUR 3,000,000 per month or EUR 36,000,000 per year.

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Key Documentation and SEMI License Requirements Explored: Crucial Points for Successful Licensing

The requirements for this type of SEMI license are as follows.

  1. SEMI share capital: no less 80,000 euros (depending on chosen market-space). This requirement relates to the establishment of a joint stock company, and not to obtaining permission.
  2. Legal form: limited liability company (LLC).
  3. Time to obtain a license: 3 months from the date of establishment of the company.

SEMI limits are as follows.

  1. Non-cash transactions (without territorial restrictions).
  2. The amount of total debt owed to customers (legal entities and individuals) by the system should not exceed 5 million euros as of this specific date.
  3. Monetary transactions may be carried out and payment services may be provided, other than related electronic money transactions or services, if the average monthly turnover over the last 12 months does not exceed EUR 3 million.
  4. The contact person and accountant must reside in the country of establishment and speak the local language for timely communication with authorities.

Financial statements must also be submitted.

In frame of SEMI licensing process, next-mentioned documentation must be prepared and submitted along with the application.

  1. A document proving the identity of all beneficiaries in the company and other persons actually related to the management of the company.
  2. SEMI application for all beneficiaries in the company and other persons actually involved in the management of the company.
  3. Detailed plan for carrying out activities.
  4. Sales plan for 12 or more months in advance.
  5. Financial plan.
  6. Investment plan.
  7. Marketing developments and strategies.
  8. Internal audit and compliance implementation plan.
  9. Internal regulations for ensuring the security of client funds.
  10. Internal regulations on compliance with limits on financial services provided.

Passporting allows firms to provide services throughout the EEA without additional permission. This means that the firm can advertise its financial services in other EU countries and open offices in other EU countries.

Typically, SEMI compliance alignment takes less time and requires less paperwork and verification. When migrating from SEMI to Authorized Institutions, the process includes the same steps and requirements as for obtaining a new Authorized Institution license. The SEMI authorization fee is charged in accordance with the payment services regulations of each country. In other words, the registration and authorization fees depend on the requirements of the regulatory authority.

Some special SEMI standards include next-mentioned.

  1. Have a registered office, an active management body in chosen market-space.
  2. Directors of the payment institution must have a good reputation and have the appropriate knowledge and experience to provide payment services.
  3. Established procedures and internal control and reporting bodies to prevent and suppress money laundering and terrorist financing.
  4. Institutions will not be able to operate and provide services in other countries.
  5. It is necessary to create a company locally, registered with National Registration Chamber, and provide a certificate of good conduct.

In addition to the application, you must provide next-mentioned SEMI documents.

  1. Program of activities, which includes the types of payment services provided, as well as other related services.
  2. Business-plan (including a financial forecast for the first three years), according to which the institution will use appropriate and proportionate systems, resources and procedures to carry out its activities.
  3. Draft agreements between all parties involved in the provision of payment services.
  4. Procedures for monitoring, processing and acting on security incidents and customer complaints related to security.
  5. Description of the procedure established to record, control, monitor and limit access to sensitive payment data.
  6. Description of the principles and definitions used to collect transaction and fraud statistics.
  7. Security policy document.
  8. Procedures and internal control and reporting bodies established to prevent money laundering and terrorist financing.
  9. Measures to protect user funds.
  10. Rules for customer service.

Benefits of Obtaining SEMI License

  1. Cost-effective payment solutions: SEMI permit holders can provide customers with cost-effective payment solutions, allowing them to transfer money domestically or internationally at low cost.
  2. Customer Trust: This authorization ensures customers the safety and security of their funds. This leads to increased customer trust and loyalty.
  3. Flexibility. Holders of this authorization can provide customers with a variety of payment methods, including online payments, mobile payments and e-wallets.
  4. Regulatory Compliance: Holders of this permit must comply with regulatory requirements to ensure that business is conducted ethically and in accordance with regulations.

SEMIs are issued by regulatory authorities that oversee the activities of financial institutions. The regulatory body responsible for issuing EMI licenses depends on the jurisdiction in which the business is established.

Thus, SEMI is a legal authorization that allows a business to operate as an electronic money issuer and payment service provider. It provides businesses with cost-effective payment solutions, increases customer confidence, flexibility and compliance. The best jurisdictions to obtain this permit include the UK, Lithuania and Malta, while the regulatory authority responsible for issuing depends on the jurisdiction in which the business is established.

Additionally, the following can be emphasized and clarified:

  • in case of opening a small license, confirmation of the sources of funds in the authorized capital is not required. However, with further extension of the license, confirmation of sources will be required;
  • clients are recommended the service of opening a new company in the selected country (a prerequisite for obtaining permission).

We can mention a few additional benefits of getting SEMI. The undoubted advantages are:

  • the ability to open an account remotely for both individuals and legal entities;
  • making payments in any banks around the world in any currency;
  • making international SWIFT transfers;
  • opening correspondent accounts.

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SEMI Certification Process

To get this permit, you need to prepare a package of documentation, which includes:

  • business-plan,
  • analysis of future risks,
  • the structure of the company and the type of its management,
  • description of the company’s information system,
  • accounting policy indicating the type of accounting.

In addition, the regulator is provided with information about the managers and authorized persons responsible for managing the electronic money system. If third parties carry out activities on behalf of your company, agreements concluded with them are provided. Of course, the specific list and all regulatory parameters will differ depending on the chosen market space. SEMI license price varies every time based on plenty of nuances.

You can seek professional qualified help from our company. We work to achieve the most effective results for our clients and offer an extensive range of services.

The article’s author is Denys Chernyshov – founder and CEO of the globally-famous organization Eternity Law International.

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