In recent years, the financial services market has changed significantly due to the rapid growth of the fintech sector. Increasingly, companies are building their own payment systems, offering solutions for cross‑border transfers, online payments, digital wallets, and virtual cards. To carry out such activities, you must obtain an MSO or EMI licence, as well as other financial authorisations depending on the nature of your operations.
- Jurisdiction choice affects licence timelines, capital requirements and cross‑border operational scope.
- MSO/MSB/EMI/PI licences require robust AML/KYC/CFT policies and ongoing regulatory compliance.
- Substance matters: local physical office, resident directors/officers, and dedicated compliance/AML personnel are mandatory.
- Capital thresholds vary widely — from recommended modest sums to EUR 350,000 for a full EMI in Cyprus.
- Application timelines range from 1–2 months (US Montana) to up to 14 months (Cyprus EMI), depending on jurisdiction.
- Document pack must include passports, source‑of‑funds, business plan, IT/AML policies and evidence of premises.
Regulation varies widely between countries, and the choice of jurisdiction directly affects the time to obtain a licence, capital requirements, and your ability to operate internationally. In this overview, we highlight the countries that are currently the most suitable for setting up payment institutions and obtaining MSO or EMI licences.
What Is a “Financial Licence”?
A financial licence is an authorisation that allows companies to lawfully conduct activities involving funds, electronic money, or payment instruments. Such licences are issued by financial regulators and confirm that a company meets established requirements for:
- minimum share capital;
- risk management and information security systems;
- segregation of client funds from the company’s own assets;
- transparency of operations and financial reporting;
- protection of clients’ personal data; and
- anti‑money laundering and counter‑terrorist financing (AML/CFT).
Companies that operate international payment systems must hold the relevant financial licences in their countries of incorporation. It is not sufficient to obtain a one‑off approval: companies must maintain ongoing compliance with local regulatory requirements.
Depending on the licence, companies may have different legal statuses, for example:
- payment service provider (PSP);
- electronic money institution (EMI);
- money service operator (MSO) or money service business (MSB); and
- others.
Below, we outline the features of selected financial licences and the key requirements in the top countries for setting up payment systems.
MSO Licence in Hong Kong
General Overview
In Hong Kong, the Customs and Excise Department is responsible for issuing MSO licences and supervising the ongoing activities of licensed money service operators.
An MSO (Money Service Operator) licence authorises the following activities:
| Type of activity | What does this involve? |
|---|---|
|
Money Change Services |
Physical currency exchange in Hong Kong |
Remittance Services |
Includes the following operations:
|
Restrictions when operating under an MSO licence:
- A company holding an MSO licence may act only as an intermediary for money remittances and is not permitted to hold client funds.
- An MSO licence does not confer the right to issue payment cards directly; this can be done in partnership with a licensed provider.
MSO licensees may work with third‑party providers that hold banking or EMI licences.
Company Requirements
To obtain an MSO licence, you must incorporate a Hong Kong company before filing the application. The company must also meet the following requirements:
| Requirement | Description |
|---|---|
|
Share capital |
There is currently no statutory minimum capital, but it must be sufficient for MSO operations. In practice, a paid‑up share capital of HKD 1,000,000 is considered sufficient (in some cases HKD 500,000, depending on the scale of operations). The share capital must be paid up at the time the MSO licence application is submitted. |
|
Shareholders, directors and officers |
Any person, including a foreign national, may be a shareholder or director. However, the company must have local staff responsible for regulatory compliance and monitoring of suspicious activities (Compliance Officer and AML Officer (MLRO)). If the company’s director is a Hong Kong resident, the same individual may also serve as the Compliance Officer and AML Officer. All authorised persons under the application must meet the fit and proper criteria, which involves an assessment of competence and integrity. This typically includes:
|
|
Office and documentation |
The company must maintain an office in Hong Kong and keep, among other required records:
|
The overall timeframe for obtaining an MSO licence in Hong Kong can be up to one year, taking into account:
- preparation of documents;
- company incorporation;
- completion of tests and interviews; and
- review of the application by the Hong Kong Customs and Excise Department.
MSB Licence in Canada
General Overview
MSB (Money Services Business) licensing in Canada allows the following activities:
- Currency exchange
- Money remittances between individuals and/or legal entities
- Issuance or redemption of money orders, travellers’ cheques, or similar negotiable instruments
- Virtual currency exchange and transfer (including exchanging funds for virtual currency, virtual currency for funds, or one virtual currency for another)
- Providing and maintaining a crowdfunding platform for use by other individuals or entities to raise funds or virtual currency
- Cheque cashing
The regulators for MSB‑licensed businesses currently are:
- The Bank of Canada — for companies providing payment service provider (PSP) activities; and
- The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) — for the crypto sector and other MSB‑related activities.
Company Requirements
To obtain an MSB licence, you must incorporate a company in Canada. At the same time, the following requirements for MSB businesses should be taken into account:
| Requirement | Description |
|---|---|
|
Minimum share capital |
There is no statutory minimum share capital. A recommended level of paid-up capital is CAD 10,000. |
|
Physical office |
The company must maintain a physical office in Canada and provide the appropriate evidence to FINTRAC. |
|
Shareholders, directors and officers |
Shareholders and directors may be of any residency. The company must appoint a certified Compliance and AML Officer. All authorised persons named in the application must have appropriate education and relevant experience in the financial sector. |
|
AML/KYC/CFT documentation |
The company must maintain tailored policies on:
In addition, the company must retain records of suspicious transaction reports and reports of transactions carried out under the licence. |
On average, obtaining an MSB licence from FINTRAC takes up to 12 weeks, although the timeline depends on FINTRAC’s workload and any requests for clarification or additional information.
Companies wishing to provide PSP services must obtain a licence from the Bank of Canada under the Retail Payment Activities Act (RPA Act). The Bank of Canada may review an application for up to 10 months.
MSB Licence in the United States
General Overview
MSB Licence in the United States
It is generally easiest to obtain an MSB licence in the State of Montana because, unlike most other US states, Montana does not require a separate state‑level licence. It is sufficient to obtain federal registration with the Financial Crimes Enforcement Network (FinCEN). MSB activities in Montana are governed by the Bank Secrecy Act (BSA) of 1970, as amended.
A US MSB may carry out the following activities:
- money transmission;
- currency exchange;
- virtual currency transactions;
- provision of prepaid cards or e‑wallets;
- cheque cashing; and
- issuance or redemption of money orders, travellers’ cheques, or similar negotiable instruments.
Company Requirements
To obtain an MSB licence, you must incorporate a company in the United States, taking into account the following requirements:
| Requirement | Description |
|---|---|
|
Minimum share capital |
There are no minimum share capital requirements. |
|
Physical office |
The company must have a registered address and a registered agent in Montana. A physical premises is not strictly required, but it is recommended to enhance the company’s credibility. |
|
Shareholders, directors and officers |
Shareholders and directors may be of any residency. The company must appoint a certified Compliance Officer. It is recommended to appoint a local specialist. Directors, shareholders and key employees must meet the fit and proper criteria. |
|
AML/KYC/CFT documentation |
In addition to other mandatory documents, the company must maintain tailored policies under the BSA covering:
The company must also implement Suspicious Activity Reports (SAR) and Currency Transaction Reports (CTR) systems. |
On average, the overall timeframe for obtaining an MSB licence in Montana is 1–2 months, depending on the regulator’s workload and any requests for clarification or additional information.
SRO Licence in Switzerland
General Overview
Registration as an SRO (Self‑Regulatory Organisation) in Switzerland is carried out in accordance with the guidelines of the Swiss Financial Market Supervisory Authority (FINMA).
An SRO licence in Switzerland allows the following activities:
- payment processing;
- operations with crypto‑assets;
- issuance of credit and debit cards;
- acting as a payment service provider;
- brokerage activities;
- acting as a financial intermediary (granting loans and credit facilities).
Company Requirements
To obtain an SRO licence, you must incorporate a company in Switzerland, taking into account the following requirements:
| Requirement | Description |
|---|---|
|
Minimum share capital |
Minimum share capital depends on the legal form and is:
|
|
Physical office |
The company must have a physical office in Switzerland and evidence it in order to obtain the licence. |
|
Shareholders, directors and officers |
Shareholders and directors may be of any residency. At least one director must have sole signatory authority and be resident in Switzerland. The company must appoint an Anti‑Money Laundering Officer (AML Officer) who is resident in Switzerland. In addition, the company must appoint an external auditor. |
|
AML/KYC/CFT documentation |
In addition to other mandatory documents, the company must maintain policies covering:
|
On average, the overall timeframe for obtaining an SRO licence in Switzerland can be up to six months, depending on FINMA’s workload and any requests for clarification or additional information.
PI or EMI Licences in Cyprus
General Overview
Obtaining financial licences in Cyprus opens broad opportunities to operate across the European Economic Area (EEA). Depending on the licence type, a Cyprus Payment Institution (PI) or Electronic Money Institution (EMI) licence allows you to provide a range of electronic money and payment services.
| EMI licence | PI licence |
|---|---|
|
The Electronic Money Institution (EMI) licence covers services related to the issuance, redemption, and distribution of electronic money. |
The Payment Institution (PI) licence allows the provision of the following payment services:
|
The regulator for licensed companies is the Central Bank of Cyprus, acting under the Electronic Money Law of 2012.
Company Requirements
To obtain financial licences in Cyprus, you must incorporate a Cyprus company that meets the following requirements:
| Requirement | Description |
|---|---|
|
Minimum share capital |
The required share capital depends on the licence type. For example:
|
|
Physical office |
The company must maintain a physical office in Cyprus to store records and provide workspace for staff. |
|
Shareholders, directors and officers |
The company must appoint at least two executive directors who are Cyprus residents. In addition, the team should include:
All persons who manage the company must meet Fit and Proper criteria, evidencing high standards of integrity and professional competence. |
|
AML/KYC/CFT documentation |
The company must maintain policies covering:
The company must also implement measures to safeguard clients’ funds and personal data. |
The overall timeframe for obtaining a PI licence can be up to 12 months, and for an EMI licence up to 14 months, including company incorporation, document preparation, and engagement with the Central Bank of Cyprus.
EMI Licences in the United Kingdom
General Overview
The regulator for licensed firms in the United Kingdom is the Financial Conduct Authority (FCA), acting under the Electronic Money Regulations 2011. An EMI authorisation permits a range of electronic money and related payment services, including the issuance, redemption and distribution of e‑money, with the exact scope depending on the permissions granted.
| Type of licence | Description |
|---|---|
|
EMI licence |
Comprehensive financial services, including:
|
|
Small Electronic Money Institution (SEMI) licence |
Permits the issuance of electronic money and the execution of payment transactions within limited thresholds:
|
|
Authorised Payment Institution (API) licence |
Covers a wide range of payment services, including:
|
|
Small Payment Institution (SPI) licence |
Allows a range of payment services on a limited basis with reduced capital requirements. Activity is limited to the United Kingdom, and the average monthly value of payment transactions must not exceed EUR 3 million. |
Company Requirements
To obtain financial licences in the United Kingdom, you must incorporate a UK company that meets the following requirements:
| Requirement | Description |
|---|---|
|
Minimum share capital |
The required share capital depends on the type of licence. For example:
In addition, you must maintain an additional capital buffer to ensure a capital adequacy ratio of at least 1.3–1.5. |
|
Physical office |
To obtain authorisation, the company must have a physical office in the United Kingdom. |
|
Shareholders, directors and officers |
The company must have a board of directors comprising at least three members. In addition, the team should include:
All persons who manage the company and key staff must meet Fit and Proper criteria, evidencing high integrity and professional competence. |
|
AML/KYC/CFT documentation |
The company must maintain policies covering:
The company must also ensure segregation of client funds. |
The overall timeframe for obtaining authorisation in the United Kingdom can be up to 12 months, depending on the complexity of the application, the regulator’s workload, and how quickly additional information is provided.
General Document Requirements for Financial Licence Applications
The specific document set varies by jurisdiction and licence type, but typically you must provide:
| Individual documents | Company documents |
|---|---|
|
|
Conclusion
While the requirements for companies seeking financial licences and establishing payment systems are broadly similar, each jurisdiction has its own legal framework governing the process. Applicants should be prepared to submit a comprehensive document pack, ensure genuine substance and on‑the‑ground presence in the country, and undergo rigorous reviews that can take from several months up to a year.
