EMI license in
Netherlands 2024
The Netherlands, celebrated for its dynamic fintech sector within the European Economic Area (EEA), offers a fertile ground for financial ventures looking to expand. An Electronic Money Institution (EMI) license in the Netherlands allows your business to offer a variety of electronic money services across the EEA, granting smooth access to the vast EU market.
The Netherlands solidifies its status as a leading fintech hub through its innovative financial regulations, especially concerning the issuance of Electronic Money Institution (EMI) licenses. Holding an EMI license from the Netherlands empowers companies to issue electronic money, provide payment services, and conduct secure digital transactions efficiently.
The supportive business climate, robust regulatory framework provided by the Dutch Central Bank (DNB), and access to a skilled workforce make the Netherlands an attractive choice for fintech firms aiming to extend their operations in Europe. The DNB ensures that EMIs meet the necessary operational standards within the EEA, fostering a secure and competitive financial environment.
Regulations for EMI license in Netherlands
The Dutch Central Bank (De Nederlandsche Bank, DNB) operates under the Financial Supervision Act (Wft) and serves as the primary regulatory and supervisory authority for Electronic Money Institutions (EMIs) in the Netherlands. The core objectives of the DNB include:
- Enhancing the Netherlands’ Reputation: Position the Netherlands as a secure and reliable fintech hub within the European Economic Area (EEA), fostering a favorable environment for financial innovation.
- Regulatory Supervision: Oversee electronic money services to ensure compliance with regulatory standards, promoting transparency and fairness among market participants.
- Enforcing Regulations: Implement and enforce adherence to the Financial Supervision Act (Wft) and other relevant regulations to uphold high regulatory standards and maintain the integrity of the financial system.
- Licensing and Oversight: Issue licenses to EMIs and monitor their operations to ensure alignment with regulatory frameworks. This includes taking necessary measures, such as license revocation, to maintain market integrity.
- Consumer Protection: Protect consumer interests through rigorous regulatory practices, enhancing the security and reliability of the EMI sector in the Netherlands.
Obtaining an EMI license in the Netherlands involves complying with a detailed regulatory framework designed to ensure the stability and integrity of the financial system.
Key Regulations Include:
- Capital Requirements: Applicants must have a minimum initial capital of EUR 350,000. This requirement ensures that the institution has adequate financial resources to operate effectively and manage potential losses.
- Corporate Structure and Governance: The management team and board members must meet fit and proper criteria, demonstrating relevant experience and a clean regulatory history. The institution must also have a clear organizational structure with defined responsibilities.
- Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) Compliance: EMIs must implement comprehensive AML and CTF measures, including customer due diligence, transaction monitoring, and reporting suspicious activities to relevant authorities.
- Operational Requirements: Institutions must have appropriate IT systems, risk management procedures, and internal controls in place to ensure secure and efficient operations. This includes safeguarding customers’ funds and maintaining detailed transaction records.
- Consumer Protection: EMIs must adhere to consumer protection laws, ensuring transparency in fees and terms, providing clear information to customers, and effectively handling complaints.
- Reporting and Auditing: Regular reporting to the DNB is mandatory, including financial statements and compliance reports. Additionally, EMIs must undergo periodic audits to verify compliance with regulatory requirements.
- Passporting Rights: Once licensed, an EMI in the Netherlands can utilize EU passporting rights to operate across the European Economic Area (EEA) without needing additional licenses, facilitating business expansion.
- Application Process: The application process involves submitting comprehensive documentation, including business plans, risk management policies, and information on the ownership structure. The DNB rigorously reviews applications to ensure all regulatory criteria are met.
By adhering to these regulations, EMIs in the Netherlands can benefit from a stable and supportive regulatory environment, promoting innovation and growth within the financial technology sector.
Types of EMI licensing in Netherlands
| License type | Description |
|---|---|
| EMI License | Comprehensive financial services including issuance of electronic money, execution of payment transactions, management of electronic payment systems, and provision of operational risk management solutions |
| Small Electronic Money Institution (SEMI) License | Offers electronic money services and payment services on a smaller scale, suitable for businesses with lower operational volumes and capital requirements. Must not exceed €5 million in average outstanding e-money or €3 million per month in payment. |
| Payment Institution (PI) License | Covers a broad range of payment services including executing payment transactions, issuing and acquiring payment instruments, and money remittance. Suitable for businesses engaging in extensive payment. |
| Small Payment Institution (SPI) License | Provides a range of payment services on a smaller scale, with lower capital requirements. Ideal for smaller businesses looking to offer payment services without the need to issue electronic money. Limited to operating within the UK and must not exceed €3 million in average monthly payment. |
With EMI license in Netherlands you can provide following services:
- services enabling cash to be placed on a payment account as well as all the operations required for operating a payment account
- services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account
- execution of payment transactions, including transfers of funds on a payment account with the payment service provider of the payment service user or with another payment service provider: execution of direct debits, including one-off direct debits, execution of payment transactions through a payment card or a similar device and/or execution of credit transfers, including standing orders
- execution of payment transactions where the funds are covered by a credit line for a payment service user: execution of direct debits, including one-off direct debits, execution of payment transactions through a payment card or a similar device and/or execution of credit transfers, including standing orders
- issuing and/or acquiring of payment instruments
- money remittance
- execution of payment transactions where the consent of the payer to execute a payment transaction is given by means of any telecommunications terminal equipment, digital or IT device and the payment is made to the telecommunications network or IT system operator, acting only as an intermediary between the supplier of the goods or services and the payment service user
- Account information services
- Issuance of e-money
Overview of requirements to obtain EMI license in Netherlands
To secure an Electronic Money Institution (EMI) license in the Netherlands, applicants must fulfill a set of regulatory requirements as stipulated by the Dutch Central Bank (DNB):
- Establish a company under Dutch law with no restrictions on the nationality of shareholders.
- Appoint 2 local directors who are residents of the Netherlands.
- Ensure that board members possess a strong reputation and a thorough understanding of the financial sector.
- Demonstrate adequate financial resources to cover the initial capital requirement of EUR 350,000, along with additional reserves as necessary.
- Maintain a physical office in the Netherlands to conduct business operations.
- Provide a comprehensive and realistic business plan detailing the proposed operations and strategies.
Estimated time frames
Company formation
1 week
Documents preparation
4-12 weeks
PI / EMI license obtainment from DNB
3-9 months
Note: The timeline may vary based on the DNB’s workload and any additional information or clarifications requested during the application process.
Legal services for obtaining EMI license in Netherlands
Basic Package
35,000 EUR initial set up
- Turnkey company formation
- Legal address for 1 year
- Corporate documents
- Due diligence for shareholders and key directors
- Overview of the business plan
- Overview of financial forecasts
- Overview of an organizational structure
- Analysis of the internal documents
- Applying for the license
Registration of the EMI / PI licensed company under the minimum regulatory requirements
Additional services on request
- Preparation of individual business plan
- Preparation of required documents for the licensing
- Accounting services
- Assistance in opening bank account, including segregated and safeguard accounts
- Connection with SEPA system
- Connection with SWIFT
- Connection with card issuance programme
- Apostilled corporate documents
- Introduction to confirmed software provider
- Legal support
Ready-Made solution
available on request
- Registered company
- Legal address for 1 year
- No debts, no liabilities – clean company
- Active license
- Corporate documents
- Assistance with transfer of ownership
Edgar Mironov
Head of FinTech Projects
Requirements for EMI licensing in Netherlands
List of required documents
- Application Form: Completion and submission of the official licensing application form to the DNB.
- Purpose: Serves as the formal request for the EMI license, containing basic information about the applicant.
- CVs and Qualifications:
Detailed CVs for shareholders, board members, and key team members.
- Purpose: Demonstrates the qualifications, experience, knowledge, and skills necessary for independent duty performance. The DNB may conduct interviews to assess these qualifications further.
- Operational and Organizational Structure:
Comprehensive documentation of operational procedures and organizational structure, including detailed scrutiny checks for Management Board members, CEO, and Head of Branch Manager.
- Purpose: Ensures a reliable operational framework and appropriate governance structure are in place.
- Business Plan:
A detailed plan outlining the services offered, budget forecasts for the first three financial years, marketing and promotion strategies, and key market segments.
- Purpose: Provides a strategic vision and financial roadmap for the institution’s operations.
- Activity Program:
Documentation detailing the services provided and operational locations.
- Purpose: Clarifies the scope and geographic reach of the EMI’s activities.
- Internal Policies and Manuals:
Includes policies for risk management, business continuity plans, and measures to protect electronic money holder funds.
- Purpose: Ensures the institution has robust internal controls and procedures to manage risks and protect customers’ funds.
- AML/KYC and IT Security Policies:
Detailed procedures and third-party engagements for Anti-Money Laundering (AML) and Know Your Customer (KYC) processes, and IT security policies, including data centers and cloud storage solutions.
- Purpose: Demonstrates compliance with AML/KYC regulations and ensures the security of IT systems and data.
- Compliance with Liability Insurance:
Proof of meeting liability insurance requirements.
- Purpose: Provides financial protection against potential liabilities.
- IT Infrastructure and Architecture:
Information on IT solutions employed, agreements with third-party IT service providers, and details on IT infrastructure.
- Purpose: Ensures the institution has the necessary technological capabilities and reliable IT infrastructure.
- Questionnaire on Operational Risks:
A detailed questionnaire to assess the risks associated with the operational aspects of the business.
- Purpose: Helps the regulator evaluate how operational risks are managed and mitigated.
- Questionnaire on Information and Communication Technologies and Security Risk Management:
A questionnaire to evaluate the risks related to IT systems and data security.
- Purpose: Assesses the institution’s preparedness in managing IT and security risks.
- External Audit Partnership and Quote:
Engagement with an accredited external auditor to ensure compliance and financial transparency, along with a quote for external auditing services.
- Purpose: Ensures ongoing compliance with financial regulations and provides an independent assessment of the institution’s financial health.
Share Capital and Government Fees
- Minimum Share Capital:
- For obtaining a PI license in the Netherlands, the minimum share capital is EUR 20,000.
- For obtaining a full EMI license in the Netherlands, the minimum share capital is EUR 350,000.
- Additionally, an extra capital reserve to ensure a capital adequacy ratio of at least 1.3 – 1.5 is advised.
- Government Fees: The application fees for a PI or EMI license in the Netherlands is EUR 6,800.
Bank account requirements
- Safeguarding Account: Detailed arrangements for the establishment of a safeguarding account with an EU credit institution to manage funds separately from those of non-electronic money holders.
- Operational Bank Accounts: Necessary for managing daily operational expenses and transactional purposes, facilitating the processing of customer transactions through current accounts.
- Current Account: For transactional purposes, allowing for the receipt and sending of payments related to the services offered.
Personnel Requirements
- Management Board: Minimum of two local directors, with the CEO possibly being a board member.
- Local AML and Compliance Officers: Responsible for compliance with regulatory standards and AML regulations.
- IT Security Officer: Can be outsourced; manages IT security measures to protect data and operational integrity.
- Internal Audit Officer: Can be outsourced; ensures ongoing internal compliance and operational audits.
- Local Data Protection Officer (DPO): Depending on the scale of the data processing activities and the nature of the data handled, EU GDPR may require the appointment of a Data Protection Officer (DPO) if the organization’s core activities consist of data processing operations that require regular and systematic monitoring of data subjects on a large scale.
- Chief Financial Officer (CFO): Oversees financial planning, management, and reporting; ensures compliance with financial regulations and reporting requirements.
- Chief Risk Officer (CRO): Manages risk assessment and mitigation strategies; ensures the implementation of robust risk management frameworks.
Not sure about the number of staff you need to employ for your PI/EMI project? Contact Legalaes experts to define the right personnel structure for your business model.
Business premises requirements
- To obtain a EMI license in Netherlands it is necessary to establish a physical office in the Netherlands for document storage and providing a working space for staff, affirming the company’s operational base in the Netherlands.
Roadmap of the project
For more detailed road map of the project and commercial offer – get in touch with our FinTech professional.
Edgar Mironov
Head of FinTech Projects
Document Preparation / Company Formation
The process starts with reviewing and preparing company documentation. This includes the preparation of incorporation documents, engagement with a notary public, and registration within the Dutch Companies Register.
Preparation of Documents for EMI License Application
Legal consultation regarding the business model and advice on organizational structure and the management team are provided. This phase also involves the preparation and review of all documentation required for the EMI license application.
Investor's Clearance to National Security Interests
Preparing and submitting the necessary documentation for obtaining clearance related to national security interests from shareholders, UBOs, and the DNB. This stage also involves communication with state authorities, leading to the issuance of a decision.
Submission of the Document Set to the DNB
Submitting the complete document set to the DNB, accompanied by the payment of the stamp duty for license issuance. A case officer is assigned, and the application undergoes thorough assessment.
Rounds of Q&A with the DNB
Engaging in rounds of questions and answers with the DNB, which require the submission of amendments and additional documentation as necessary. This includes handling direct communications with the DNB.
Receipt of the EMI License
Preparing for the launch of business activities following the granting of the EMI license, including subsequent steps such as applications for SWIFT and card issuing solutions.
Detailed Time Frames to Obtain a EMI License in Netherlands
The estimated time frames to obtain an Electronic Money Institution (EMI) license in the Netherlands can vary depending on several factors, including the completeness and quality of the application, the complexity of the business model, and the responsiveness of the applicant to any additional information requests from the regulator, De Nederlandsche Bank (DNB). Here is a general outline of the process and the associated time frames:
1. Preparation Phase
Time Frame: 4-12 weeks
- Preparing the Business Plan and Documentation: Assisting in preparing the business plan, financial projections, risk management policies, IT security measures, and other necessary documentation.
- Ensuring Corporate Structure and Governance: Ensuring the corporate structure and governance framework meet regulatory requirements, including the appointment of qualified management and board members.
- Securing Capital Requirements: Securing the minimum initial capital of EUR 350,000 (for a full EMI license).
2. Submission of Application
Time Frame: Immediate to 1 Week
Assisting in submitting the complete application to the DNB.
3. Regulatory Review Phase
Time Frame: up to 3 months
- Initial Review: DNB conducts an initial review to check the completeness of the application. If the application is incomplete, assisting in providing additional information or documentation as requested.
- Detailed Assessment: Once the application is deemed complete, assisting in the detailed assessment by DNB, including evaluating the business plan, financial soundness, internal controls, IT systems, AML/CTF measures, and overall compliance with regulatory requirements.
4. Response to Queries
Time Frame: Varies
During the detailed assessment, DNB may request further information or clarifications. Assisting in responding to these queries promptly can impact the overall time frame.
5. Decision Phase
Time Frame: 3-4 months
- Approval or Rejection: After completing the detailed assessment, DNB makes a decision. If the application is approved, the Netherlands EMI license is granted. If additional conditions need to be met, notifying the applicant and assisting in meeting these conditions.
- Notification and Publication: Communicating the decision to the applicant and ensuring the issuance of the license is published.
Total Estimated Time
- Best Case: Approximately 9 months (assuming all documentation is in order and responses to queries are prompt).
- Typical Case: Approximately 9-15 months, considering potential back-and-forth communication and additional information requests.
Factors Influencing the Time Frame
- Completeness and Quality of Application: Well-prepared applications with thorough documentation and clear business plans are processed more quickly.
- Regulatory Queries: Prompt and comprehensive responses to any regulatory queries can expedite the process.
- Complexity of Business Model: More complex business models may require more detailed assessment and longer review times.
- Regulatory Workload: The current workload of DNB can also impact processing times.
By ensuring thorough preparation and proactive communication with the regulator, we help streamline the process and potentially reduce the time required to obtain an EMI license in the Netherlands.
Advantages of the EMI license in Netherlands
Obtaining an Electronic Money Institution (EMI) license in the Netherlands offers several strategic and operational advantages for fintech companies. Here are the key benefits:
01
Efficient Licensing Process
Streamlined Procedures: The Dutch Central Bank (DNB) is known for its efficient and supportive regulatory framework, often resulting in quicker processing times for license applications compared to many other EU countries.
02
Comprehensive Financial Services
Wide Range of Services: With an EMI license, companies can offer various services including the deposit and withdrawal of customer funds, handling payment transactions, acquiring, money transfers, and initiating payments. This versatility allows fintech companies to effectively cater to diverse customer needs.
03
Strategic Location
Central European Hub: The Netherlands’ central location in Europe provides a strategic advantage for companies looking to expand their services across the continent. This central position facilitates efficient management of operations and logistics.
04
Proactive Regulatory Support
Innovative Guidance: Dutch regulators, including the DNB, offer substantial support through resources like the Innovation Hub. This helps fintech companies navigate regulatory challenges and bring innovative financial products to market quickly.
05
Robust Financial Infrastructure
Global Connectivity: The Netherlands boasts a highly developed financial infrastructure with excellent connectivity to global financial networks. This includes access to SWIFT, facilitating smooth and efficient international transactions.
06
Highly Skilled Workforce
Talent Pool: The country has a high-quality, multilingual workforce well-versed in the financial and technological sectors, making it easier to find skilled employees to support operations.
07
SEPA Integration
Seamless Euro Payments: Direct access to the Single Euro Payments Area (SEPA) allows for seamless EUR payments across 36 countries, enhancing transaction capabilities within Europe and ensuring cost-effective euro-based transactions.
08
Innovative Fintech Ecosystem
Vibrant Community: The Netherlands is known for its vibrant fintech community, supported by a favorable business environment, active collaboration between startups and established financial institutions, and numerous networking opportunities.
09
Stable Economic Environment
Economic Stability: The Netherlands has a stable and robust economy, providing a secure environment for long-term business operations. This stability is crucial for financial institutions looking to establish a reliable presence in Europe.
Links for legislation related to EMI business in Netherlands
The Prevention of Money Laundering and Terrorist Financing Act (Wet ter voorkoming van witwassen en financieren van terrorisme, Wwft) establishes the legal framework for combating money laundering and terrorist financing in the Netherlands. This act outlines the responsibilities of financial institutions in identifying, preventing, and reporting activities suspected of being related to financial crimes.
The Financial Supervision Act (Wet op het financieel toezicht, Wft) provides the legal foundation for the supervision of financial markets and institutions in the Netherlands, ensuring compliance with European standards. This act covers the authorization and operation of financial institutions, including EMIs.
The Dutch Companies Act (Burgerlijk Wetboek Boek 2) governs the incorporation, regulation, and dissolution of companies in the Netherlands. This act facilitates ease of doing business and provides a framework for the establishment and operation of both local and international companies.
Regulation (EU) No 648/2012 on OTC derivatives, central counterparties, and trade repositories, known as EMIR, regulates the clearing, reporting, and risk management standards for derivatives in the EU.
Directive (EU) 2015/2366 on payment services in the internal market (PSD2) aims to make payments safer, increase consumer protection, foster innovation, and enhance the security of payment services across the EU.
Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments (MiFID II) revises trading processes and enhances transparency across the EU financial markets.
Regulation (EU) No 600/2014 (MiFIR) complements MiFID II by setting out requirements related to the disclosure of trade data to the public and transaction execution obligations in financial markets.
Taxation of EMI Companies in Netherlands
The taxation of Electronic Money Institution (EMI) companies in the Netherlands is governed by a set of tax regulations designed to create a favorable business environment while ensuring compliance with national and EU tax laws. Here are the key aspects of taxation for EMI companies in the Netherlands:
- Corporate Income Tax (CIT): The corporate income tax rate in the Netherlands is 19% for the first EUR 200,000 of taxable profits and 25.8% for taxable profits exceeding EUR 200,000.
- Value-Added Tax (VAT): The standard VAT rate in the Netherlands is 21%. Financial services, including those provided by EMIs, are generally exempt from VAT, but specific conditions and exceptions may apply depending on the nature of the services provided).
- Withholding Tax: Dividends paid by Dutch companies to foreign entities are subject to a withholding tax of 15%. This rate can be reduced or eliminated under applicable double tax treaties or the EU Parent-Subsidiary Directive if certain conditions are met.
- Social Security Contributions: Employers are required to make social security contributions on behalf of their employees. The total employer contribution rate is approximately 27.65% of the gross salary.
- Personal Income Tax (PIT): Employees working for EMI companies are subject to personal income tax. The PIT rates are 36.93% for income up to EUR 73,031 and 49.50% for income above this threshold.
- Tax Incentives and R&D Credits: The Netherlands offers various tax incentives to encourage business development and innovation, including deductions for research and development (R&D) expenses and investment projects. A special optional tax rate under the Innovation Box regime may also apply, potentially reducing the effective tax rate significantly.
- Reporting and Compliance: EMI companies must adhere to regular tax reporting requirements, including the submission of annual tax returns, VAT returns, and other relevant documentation. The Dutch Tax Authorities oversee tax compliance and enforcement.
FAQ about EMI license in Netherlands
1. Why choose the Netherlands for setting up your EMI company?
The Netherlands offers a strategic central location in Europe, efficient regulatory processes, robust financial infrastructure, and a skilled, multilingual workforce, making it ideal for fintech companies.
2. Who can apply for an EMI License in the Netherlands?
Financial institutions with a solid reputation, substantial experience, and a commitment to compliance with regulatory standards can apply for an EMI license from the Dutch Central Bank (DNB).
3. How long does it take to get licensed by the Dutch Central Bank (DNB)?
The licensing process typically takes around 6 to 9 months, depending on the completeness of the application and responsiveness to DNB’s requests.
4. I have a license in another country; would it be useful?
Yes, a license from another country demonstrates adherence to high regulatory standards, potentially easing the application process in the Netherlands.
5. Should I establish an office in the Netherlands?
Yes, a physical office in the Netherlands is required to comply with DNB’s regulatory standards and provides a base for operations and documentation.
6. What are the main benefits of obtaining an EMI license in the Netherlands?
Benefits include access to SEPA for seamless euro payments, a stable economic environment, a comprehensive legal framework, and a supportive fintech ecosystem.
7. What are the key regulatory requirements for an EMI in the Netherlands?
Requirements include meeting minimum capital thresholds, robust AML/CTF measures, a clear corporate structure, a detailed business plan, financial stability, and compliance with tax and reporting regulations.
8. What kind of support can fintech companies expect from Dutch regulators?
Dutch regulators, like the DNB, offer resources such as the Innovation Hub to help fintech companies navigate regulatory challenges and bring innovative products to market efficiently.
At Legalaes, we specialize in providing end-to-end assistance for setting up your EMI company in the Netherlands. Our experts are ready to guide you through each step of the licensing process, ensuring compliance and helping you establish a successful operation in one of Europe’s most favorable business environments.
Each of our projects receives unique and tailored solutions in accordance with the initial objectives and vision of the shareholders.
May also interest you
