Obtaining an EMI License in Asia

An EMI license in Asia gives entrepreneurs access to operate in loyal jurisdictions with a decent legal landscape. Even though about 86% of businesses here face licensing difficulties due to lack of technical expertise, it is still one of the best regions for working with electronic money.

Obtaining an EMI license in Asia is a relatively complex process, since fairly serious requirements are imposed on applicants. But do not worry. If you cooperate with AA Lawrange – your chances of successful business registration increase manifold.

What are EMI Payment Licenses in Asia

Simply put, EMI – Electronic Money Institution (e-money) – is a permit to operate with electronic money. The term is more widespread in Europe, but Asia has its own analogues under different names.

As for the business opportunities with EMI, they are as follows:

• The right to issue electronic money (e-money).
• Opening electronic wallets for clients.
• Conducting domestic and international transfers.
• Providing acquiring services and exchange of digital tokens.
• Working with prepaid cards and mobile payments.

This information is enough for you to start thinking about how to obtain an EMI license in Asia. But do not rush, first you need to learn about the benefits of working in the region, the factors of jurisdiction choice, and more details about licensing processes.

Benefits of Running an EMI Business in Asia

Obtaining an EMI license in Asia is both status, market coverage, and direct financial benefits. FinTech (like any other -Tech) is popular here and even receives support from states. Among practical benefits, we note:

• Access to the fast-growing Asian markets, millions of active clients, and earning opportunities.
• Flexible regulation with phased licensing and constant expansion of operational potential.
• International payments and SWIFT access, with which you can work practically without geographical restrictions.
• High profitability of commissions, currency exchange, card issuance, and functioning of payment systems and gateways.
• Client and partner trust, which turns into an ever-growing user and investor base.
• Operational independence, since you yourself choose or even provide payment instruments, build payment routings.

Let us note that the indicated advantages are relevant for most countries of the Asian market.

Key Factors in Choosing a Jurisdiction

An EMI license in Asia is, in itself, an advantage. At the same time, depending on the country, you may claim other benefits as well. And also face difficulties and restrictions. Therefore, it is worth considering factors that will help you choose a jurisdiction for starting:

• Regulatory environment – clear rules and procedures simplify licensing and enterprise operation control. At the same time, they protect its intellectual property and rights.
• Financial and tax conditions – capital requirements are mandatory everywhere, but preferential taxation is offered by far from all countries. Therefore, this point must be studied thoroughly if you want to choose the most suitable region.
• Operational capabilities – remote registration, business management, access to foreign banks and scaling to external markets. Quite important for those interested in international activities.
• Reputation and infrastructure – technology and trust as one of the foundations of successful business. Fortunately, almost all countries of the Asian region will offer you both advantages.

The factors are quite standard, aren’t they? But do all jurisdictions comply with them? Let us further analyze how to open a FinTech company abroad.

Top Countries for Obtaining a License and Features of Their Regulation

Before studying how to obtain an EMI license in Asia, you should decide on the country of enterprise registration. From experience, we can say that the best jurisdictions are rightly considered to be:

• Singapore.
• Hong Kong.
• Japan.
• Malaysia.
• Indonesia.

There are significant differences between them, which you need to learn about before you make your choice.

Remark: in the future, it will be possible to obtain additional licenses in other countries or expand the existing one.

Singapore

• Regulator: Monetary Authority of Singapore (MAS).
• Type of license: Major Payment Institution (MPI) and Standard Payment Institution (SPI).
• Advantages:
  • High reputation and transparent regulation.
  • Support for fintech startups and MAS sandbox.
  • Possibility of working with crypto-assets subject to AML/CFT requirements.
• Disadvantages: strict requirements for capital and compliance.

Hong Kong

A payment system license in Hong Kong is:

• Regulator: Hong Kong Monetary Authority (HKMA).
• Type of license: Stored Value Facility (SVF) and Money Service Operator (MSO).
• Advantages:
  • Flexibility in working with electronic wallets and cross-border payments.
  • Support for innovations within the Fintech Supervisory Sandbox.
• Disadvantages: restrictions on working with cryptocurrencies and high cost of licensing.

Japan

• Regulator: Financial Services Agency (FSA).
• Type of license: Prepaid Payment Instruments and Fund Transfer Service Provider.
• Advantages:
  • Strict consumer protection.
  • Possibility of integration with banking systems.
• Disadvantages: very complicated licensing process, high entry threshold.

Malaysia

• Regulator: Bank Negara Malaysia (BNM).
• Type of license: E-Money Issuer and Digital Banking License.
• Advantages:
  • Active development of digital payments.
  • Support for Islamic fintech.
• Disadvantages: restrictions on foreign ownership and localization of operations.

Indonesia

• Regulator: Bank Indonesia.
• Type of license: PSSP (Payment System Service Provider), including Electronic Wallet Provider.
• Advantages:
  • Fast-growing market with high demand for fintech.
  • Variety of licenses for different types of activities.
• Disadvantages:
  • Requirement of 80% local company ownership.
  • Ban on cryptocurrency operations.
  • License is mandatory when covering more than 300,000 active users.

Direct Comparison of Jurisdictions

An EMI license in Asia differs significantly depending on the chosen country of operation:

From the positive side: Obtaining an EMI license in Asia is fairly standardized in a procedural context. Therefore, the licensing algorithm is approximately the same for all of the above jurisdictions.

Steps to Obtaining an EMI License in Asia

How to obtain an EMI license in Asia? The action plan is as follows:

• Preparation of a business plan and document package.
• Company registration and account opening.
• Submission of documents to the regulatory authority.
• Passing compliance verification.
• Approval and start of operations.

De facto, this is a simple procedure, but even so it is worth becoming familiar with its nuances in advance. We will help you with this further.

Preparation of Business Plan and Document Package

You need to appoint a director, compliance officer, MLRO. Also, to develop and implement AML/KYC policies. A business plan and financial model are also required. And not simplified ones, but including: transaction forecasts, revenues, expenses, description of target markets, client segments, acquisition channels.

Company Registration and Account Opening

Here the requirements differ across all jurisdictions. At the same time, having a local director will only be a plus, while having an office and a local bank account are mandatory conditions. Be prepared for checks and confirmation of the source of funds used to contribute authorized capital.

In some cases, it is more reasonable to consider an offshore, ready-made companies with an EMI license, rather than creating a new enterprise.

Submission of Documents to the Regulatory Authority

No surprises here: a standard application accompanied by the specified package of documents and payment of state fees. Note that the procedure may be either physical or digital, if the jurisdiction provides such an option.

Passing Compliance Verification

Depending on EMI license regulations, you may be invited for an interview. Or additional documents may be requested, as well as a check for compliance with AML/CFT policies and financial monitoring.

Approval and Start of Operations

The final stage, at which you actually deploy activities under the license. By this time, you must prepare technical infrastructure and begin preliminary integration of banking and payment APIs.

Terms and Cost of Obtaining a License

On average, from 4 to 12 months from the moment of submitting the license application. As for the cost, it varies within a rather wide range. Apart from the authorized capital, it includes:

• State duties and fees.
• Operating expenses, including office rent, personnel recruitment, fund conversion, maintenance.
• Access to technical solutions of banks, payment gateways.

And also services of legal consultants, without which it will be difficult for you to manage. The reason is simple – too many difficulties arise when working in the Asian region. Especially in the fintech sector.

Key Challenges and Factors to Consider

Everything depends on the country where licensing is planned. If we reduce it to an average, we get the following features of obtaining a financial EMI license:

• Regulatory uncertainty, especially if the business operates in a mixed cycle, for example, focuses simultaneously on electronic money and crypto, or even performs conversions of these currencies.
• Requirements for local presence or having a director with resident status. And this is a rather frequent and non-alternative condition for Asian markets.
• Compliance and AML. Here it is simple – non-compliance is punished by license revocation and initiation of legal proceedings. You will be lucky if only administrative.
• Banking infrastructure is reluctant to work with startups and fintech without reputation. It is extremely difficult for non-residents to obtain a corporate account.
• Timeframes and costs, although not the largest in the segment, still exceed the European region.

Should this be considered a reason to reorient to Western markets? No, if you are accompanied by expert lawyers.

Legal Assistance from Lawrange

The AA Lawrange team is your support in obtaining EMI licenses. We not only consult and help to choose the optimal jurisdiction. We analyze your needs, support you in the process of business formation, its licensing. Then we switch to working mode and accompany the enterprise in all legal aspects. Including protection of interests and reduction of tax burden.

Conclusions

An EMI license in Asia can become a promising and profitable acquisition. But be prepared that business regulation will be very strict, as well as frequent inspections. At the same time, the potential of the enterprise here is practically unlimited. Naturally, if you are supported by experienced lawyers.

Are you ready to start the licensing process or would you like to learn more about how to obtain an EMI license in Asia? Contact a Lawrange manager for consultation!

FAQ

What is the difference between the European and Asian EMI license?

The European EMI gives access to the single EU market (passporting), but requires strict compliance. The Asian one is more flexible, but limited locally and depends on the jurisdiction.

How long does it take to obtain an EMI license in Asia?

From 3 to 12 months depending on the country, the quality of documentation, and the speed of interaction with the regulator.

Which requirements most often cause difficulties during compliance check?

AML/KYC procedures, the presence of a qualified compliance officer, documentary confirmation of sources of financing and ownership structure.

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