Obtaining financial license in the Republic of Latvia

Participants of the financial market of the Republic of Latvia conduct their activities based on the Law on Payment Services and Electronic Money. Such companies are payment institutions.

For conducting such activities, certain rules must be observed. The list of services that a payment institution can provide is as follows:

• possibility of crediting cash to the accounts of users of the financial system;
• possibility of withdrawal of cash funds from accounts of users of the financial system;
• payments, including direct debit, payment cards or other similar means, credit transfers or permanent payments;
• possibility of applying a credit limit;
• making and receiving payment cards and other instruments;
• money transfers without the obligation to open an account with the bank;
• remote access to the transfer of payments (Internet cabinet, etc.);
• buying out electronic means and issuing.

Payment institution can provide money movement services provided that fund do not constitute its property. In addition, such services are limited in time and do not last more than 5 days. The purpose of payment and the source of payment means are not hidden. The amount of payment can not be split, since its execution is required for several purposes. It is allowed to split only if there is a need to pay cash to the intermediary. Payment institution shall be liable in full to the sender for the fulfillment of all necessary conditions.

Payment institution has the right to organize and implement, for example, the receipt of payments for utilities, with further redirection of funds to the accounts of utility enterprises, or to provide services for online stores and mobile operators by organizing the receipt of funds for third parties. Using own funds, payment institution can make quick transfers between different financial companies in different regions.

Financial activities, conditions, compliance with rules and laws by payment institutions are under the control of the state supervisory authority - the Commission of the Finance and Capital Market (or FKTK).

Fulfillment of requirements and main restrictions for payment enterprises

The law on payment services and electronic money provides not only conditions for the activities of financial companies, but also restrictions on the amount of transfer of funds, which should not exceed 500 thousand euros per month. In this case, the company can start working as a payment institution after registration.

It will be necessary to provide the following information to the Commission of the Finance and Capital Market:

• on company registration;
• on owners and members of the management board;
• business plan of financial activities;
• means of ensuring the security for customers' funds;
• AML and other popular documents.

There are no specific requirements for the company's capital. The Republic of Latvia insists that the services of payment institutions should be carried out exclusively in the territory of the country. However, territoriality is difficult to determine cooperating with the Internet resource. All concluded contracts and services provided to customers from the point of view of the authorities are carried out in the territory of Latvia. Therefore, we can recommend registering a payment institution in Latvia, since the amount of documents there is much smaller, which facilitates registration and allows you to immediately eliminate all claims of the FKTK to the members of the board and the company's commercial plan at the initial stage of the procedure. It will also be possible to get acquainted with the requirements of this body directly, which will subsequently facilitate the procedure for obtaining a license.

Preparation of documents will take 1-1.5 months, and the documentation will be considered by the FKTK within another 1-2 months. It is necessary to be prepared to the fact that the FKTK may have various questions.

At this stage it is very important what kind of the management is in the payment institution. Essential can be the fact that one of the members of the board is a citizen of Latvia or a person who has received a work permit for a long period of time. Obligatory condition in this case should be competence in solving financial issues, for which CV and the document on higher profile education are provided, as well as perfect reputation, i.e. the absence of a criminal record and the existing rights to conduct commercial activities (this fact is mandatorily verified).

If you are interested in obtaining a financial license in the Republic of Latvia, contact the lawyers of Law&Trust International. Our specialists will provide you with qualified advice on obtaining a financial license in the Republic of Latvia, and will also provide legal support for the entire procedure. Applying for help to the specialists of Law&Trust International, you will get quality services at the best prices!