EMI licensing and operations in Australia - YB Case 2024

EMI licensing and operations in Australia

EMI licensing and operations in Australia

The term EMI denotes a financial entity authorised to mint digital legal tender. Said tender constitutes monetary units in an electronic manifestation that may be retained both on digital devices and internet-based servers. EMIs furnish the capacity to execute electronic payments, encompassing the transferral of funds and settlement of merchandise and services, across internet-mediated platforms and tangible retail establishments.

The primordial function of an EMI lies in facilitating the circulation and exchange of electronic money, thereby contributing to the propagation of cashless payment infrastructure and stimulating economic expansion within the digital sphere. In contrast to conventional banking institutions, EMIs orient their commercial operations towards payment provisions rather than furnishing an exhaustive suite of banking services such as credit extension facilities.

By authorising the origination of bona fide digital monetary units and administrating their fluid circulation, EMIs serve as linchpins undergirding the emergence of sophisticated architectures for electronic payments and transactional functionalities across the internet-connected economy. Their role has assumed heightened importance in the contemporary era defined by the ascent of e-commerce and the gradual shift toward cashless modes of trade among businesses and consumers alike.

EMI licensing and operations in Australia

In the contemporary era, where digitalisation and innovation are becoming increasingly embedded within the fabric of our daily lives, the notion of electronic money (EMI) has assumed a position of paramount importance. EMIs serve as the cornerstone of digital finance, underpinning the seamless operation of payment systems within the digital realm. EMIs streamline transactional processes for end-users and unlock a myriad of novel business prospects, catalysing the emergence of cutting-edge financial products and services.

Within the Commonwealth of Australia, a nation renowned for its advanced economy and robust financial infrastructure, EMIs play a pivotal role in propelling the advancement of financial technology and driving the digitalisation of the economy. Boasting a technologically sophisticated landscape and a receptiveness to innovation, the Australian market presents unparalleled opportunities for expansion and the adoption of state-of-the-art financial solutions.

The objective of this review is to elucidate the intricacies of procuring EMI licences in the Australian jurisdiction, accentuating the salient criteria and stipulations incumbent upon applicants. Furthermore, it shall explore the manifold advantages and prospects that materialise for institutions that successfully secure such licences.

Pros of EMIs in Australia

Australia, renowned for its robust economy, cutting-edge technology, and progressive regulatory approach, provides a fertile ground for the burgeoning growth of innovative financial services. Within this dynamic landscape, EMIs assume a pivotal role in driving the advancement of the digital economy and catalysing financial innovation. Extensive research into the EMI sector in Australia has revealed that the nation commands a preeminent position in the realm of financial technology (fintech) and electronic payments, attributed to the distinctive characteristics of the market that propel its impressive progress.

Progressive regulators
Australian regulatory bodies, such as ASIC and APRA, have demonstrated unwavering support for the fintech sector by instituting adaptable regulatory frameworks. These frameworks are meticulously crafted to foster innovation while simultaneously upholding consumer protection and ensuring the stability of the financial system.
Fintech ecosystem
Australia boasts a vibrant and dynamic fintech community, serving as a nexus for startups, investors, and developers. This collaborative ecosystem facilitates the exchange of knowledge and encourages synergistic partnerships within the marketplace.
Innovation potential
Australian consumers exhibit a marked receptiveness to embracing novel financial products and services, sustaining a high level of interest in the innovative offerings put forth by EMIs. These offerings encompass a wide array of solutions, including mobile payments, online wallets, and e-commerce platforms.
Investment opportunities
The Australian EMI market has garnered substantial investment from both domestic and international sources, providing the requisite capital to propel the development of groundbreaking projects, facilitate operational expansion, and enable the scaling of enterprises.
Pervasive digitalisation
Australians are avid adopters of internet and mobile technologies, creating an optimal environment for the introduction and dissemination of cutting-edge financial products and services, including those proffered by EMIs.
Competitive landscape
Notwithstanding the significant prospects, the EMI market in Australia is characterised by intense competition, with both local and international players vying for market share. To maintain a competitive edge, companies must continually innovate and enhance their offerings. Furthermore, they must navigate the challenges posed by the evolving regulatory landscape, data privacy concerns, and the imperative to maintain robust information security measures.

Advantages conferred by an Australian EMI licence

Procuring an electronic money licence in Australia bestows upon organisations a myriad of significant advantages:

  1. Legal certainty and longevity: an EMI licence provides Australian companies with a well-defined legal framework within which to operate, contributing to their long-term stability and facilitating strategic growth.
  2. Access to a comprehensive suite of financial services: organisations holding an EMI licence in Australia are empowered to offer a diverse range of services within the financial sector, encompassing money transfers, payment systems, and digital money issuance and management solutions. This expansive scope of offerings amplifies their commercial capabilities.
  3. Enhanced client trust and confidence: the possession of an EMI licence engenders heightened levels of trust and confidence among clients and business partners, a critical factor for success in the financial market.
  4. Opportunities for growth and international expansion: an EMI licence equips Australian organisations with the means to establish a strong foothold in the domestic market while simultaneously pursuing opportunities for growth and influence on the international stage.

Features and main stages of EMI licensing in Australia

To initiate the licensing process, prospective EMIs must first engage in a meticulous self-assessment to ascertain their eligibility and readiness to meet the rigorous demands set forth by the regulatory authorities. This introspective exercise necessitates a thorough evaluation of the institution's financial stability, technological infrastructure, risk management protocols, and corporate governance practices.

Scope of services permissible under an EMI licence in Australia

In the Commonwealth of Australia, the ambit of services that an EMI is authorised to provide is circumscribed to encompass solely those activities pertaining to the exchange of digital currency for fiat money. This restrictive approach constitutes a cardinal aspect of the regulatory framework, which is meticulously crafted to ensure the stability and security of the digital financial ecosystem. By confining the scope of EMIs' operations to this specific domain, the regulatory authorities seek to facilitate the seamless and efficient conversion of virtual currency into traditional funds, catering to the needs of both individual users and corporate entities participating in the market.

The provision of digital currency exchange services by EMIs plays an instrumental role in bridging the gap between the digital and traditional financial realms. This vital function enables the smooth integration of digital financial transactions into the overarching financial management framework, thereby promoting a harmonious coexistence between novel forms of digital currency and established fiat money systems. The importance of this seamless transition cannot be overstated, as it underpins the effective functioning of the financial system as a whole, accommodating the diverse requirements of individual consumers and businesses alike.


In granting EMIs the authority to operate within this narrow scope of services, the Australian regulatory regime places paramount importance on upholding the highest standards of customer protection and data security. EMIs are obligated to implement robust measures to safeguard the confidentiality and integrity of customer information, particularly in the context of virtual currency exchange transactions. This unwavering commitment to customer protection instils confidence in the market, fostering an environment conducive to the responsible growth and innovation of digital financial services.

Regulatory framework

For those entities aspiring to establish themselves as EMIs in Australia, it is imperative to develop a comprehensive understanding of the regulatory framework governing this sector. The ASIC and the APRA serve as the principal regulatory bodies overseeing the operations of EMIs, ensuring compliance with stringent legal and financial standards.

ASIC places significant emphasis on the calibre and integrity of the individuals at the helm of the EMI. As such, applicants must nominate a complement of fit and proper individuals to assume key management roles, each possessing the requisite expertise, experience, and character to steer the institution responsibly. These nominees will be subject to rigorous background checks and assessments to ensure their suitability.

EMIs operating in Australia are subject to a comprehensive suite of laws and regulations designed to ensure the integrity, stability, and sound functioning of the sector. The following legislative instruments form the bedrock of the regulatory framework:


Key provisions

Corporations Act

Governs financial services and products.

Covers licensing, service provision, and disclosure obligations.


Mandates EMIs to implement robust mechanisms for customer identification.

Requires transaction monitoring and reporting of suspicious activities.

Privacy Act

Regulates handling and processing of customers' personal data by EMIs.

Ensures data protection and confidentiality.

Requires adherence to privacy policies governing data collection, storage, use, and disclosure.

Risk Management and Operational Resilience

Australian regulatory authorities emphasize robustness and resilience of EMI operations.

EMIs must develop comprehensive risk management frameworks.

Frameworks should identify, assess, and mitigate various risks including credit, market, operational, legal, and reputational risks.

EMIs must maintain adequate capital buffers for financial stability.

Customer data protection measures

Requires stringent controls to combat financial crime and safeguard financial system integrity.

Mandates thorough customer due diligence, including KYC processes.

Requires continuous monitoring of transactions for suspicious activities.

Requires prompt reporting of questionable transactions to AUSTRAC.

Privacy measures

Imposes duty on EMIs to ensure secure handling and protection of customers' personal information.

Requires establishment and adherence to robust privacy policies.

Governs data collection, storage, use, and disclosure.

Requires compliance with principles of the Privacy Act.

The Australian regulatory landscape for the digital money market seeks to strike a delicate balance between fostering innovation and maintaining the highest standards of security and integrity. The rigorous licensing requirements, coupled with the emphasis on effective risk management and data protection, serve to bolster public confidence in the financial sector, thereby creating a conducive environment for the growth and advancement of EMIs.

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A step-by-step guide in licensure

The process of obtaining an EMI licence in Australia is a multifaceted endeavour, necessitating meticulous preparation and close coordination with the relevant regulatory authorities. This intricate procedure is designed to ensure that all applicants adhere to the exacting standards set forth by the Australian financial regulatory bodies.

Phase 1:

Documentation preparation

The inaugural phase of the licensing process entails the collation of a comprehensive suite of documents. This dossier should encompass a detailed description of the applicant's business model, financial projections, information pertaining to key personnel, and evidence demonstrating compliance with risk management protocols and AML/KYC requirements. Moreover, it is incumbent upon the applicant to develop bespoke rules and practices to ensure the security and stability of their electronic money transfer operations.

Phase 2:

Application submission

Upon the completion and verification of the requisite documentation to ensure adherence to the stipulated regulations, the applicant proceeds to submit a formal application to either ASIC or APRA, contingent upon the specific nature of their intended activities. Concomitant with this submission, the applicant is required to remit the prescribed application fee, as determined by the relevant regulatory authority.

Phase 3:

Application assessment

The submission of the application marks the commencement of the regulatory assessment process. This evaluative phase may entail extensive dialogue between the applicant and the regulatory body to elucidate any intricacies and furnish supplementary clarifications as necessary. The regulator undertakes a thorough examination of the submitted information, meticulously appraising the applicant's adherence to the requisite standards and their capacity to maintain a reliable and secure operation as an EMI within the Australian jurisdiction.

Phase 4:

Application approval

The paramount juncture in the licensing process is the approval of the application, wherein the regulatory authority determines to grant the EMI licence. Upon receiving this approbation, the applicant is authorised to commence operations as an EMI in Australia, subject to ongoing reporting obligations and strict compliance with the applicable regulatory framework.

Requisite documentation

To successfully procure an EMI licence within the Australian jurisdiction, an organisation must furnish a comprehensive suite of documentation that unequivocally demonstrates its adherence to all stipulated regulatory requirements.

  1. Legal documentation
    • Certificate of incorporation: this document serves as formal attestation to the establishment of the organisation within Australia, encompassing its registered legal name and corresponding registration number.
    • Constitution and governing documents: the applicant must provide certified copies of the company's constitution, shareholders' agreement, and any other pertinent documents that delineate the corporate governance structure, objectives, and the powers vested in key personnel.
    • Management personnel information: comprehensive biographies and professional curricula vitae of directors and senior management must be submitted, corroborating their qualifications and demonstrating their requisite expertise within the financial services sector.
  2. Financial documentation
    • Business plan: a meticulously crafted business plan is imperative, elucidating the company's operational model, projected cash flows, growth strategies, and a thorough analysis of the target market.
    • Financial projections: the applicant must furnish detailed financial projections spanning a 3 to 5-year horizon, encompassing anticipated revenue and expenditure, as well as forecasted transaction volumes pertaining to digital currency within the Australian market.
    • Proof of financial capacity: substantive evidence must be provided to demonstrate the availability of sufficient capital to cover initial operational expenses and facilitate effective risk management practices.
  3. Risk management and internal control documentation
    • Risk management framework: a comprehensive document outlining the company's approach to identifying, assessing, monitoring, and mitigating risks is required, detailing the processes and procedures employed in risk management.
    • Business continuity plan: the applicant must submit a robust plan delineating the strategies and measures to be implemented in the event of financial distress or other exigencies, ensuring the uninterrupted continuity of operations.
    • Internal control and governance mechanisms: A detailed description of the internal control framework must be provided, elucidating the measures employed to prevent fraud, errors, and other undesirable occurrences.
  4. AML/CTF compliance documentation
    • Policy: the applicant must furnish a comprehensive policy document outlining the measures and procedures implemented to combat money laundering and the financing of terrorism, including thorough KYC protocols.
    • Risk assessment: a detailed analysis of the potential risks associated with money laundering and terrorist financing must be conducted and submitted, demonstrating the applicant's understanding of the inherent threats.
    • Designation of AML/CTF compliance officer: an official document confirming the appointment of the individual responsible for overseeing the EMI's AML/CTF compliance framework within Australia must be provided.
  5. Customer data protection documentation
    • Privacy policy: the applicant must submit a comprehensive privacy policy delineating the measures employed to ensure compliance with the Privacy Act and other pertinent legislation governing the protection of customers' personal information.
    • Data security framework: a detailed description of the technical and organisational measures implemented to safeguard the confidentiality and integrity of personal data must be provided, demonstrating the applicant's commitment to data protection.

Legal entity structures eligible for EMI licensing in Australia

The process of obtaining an Australian EMI licence necessitates the selection of an appropriate legal entity structure. The chosen structure must not only align with the organisation's commercial objectives, but also adhere to the stringent regulatory criteria set forth by the Australian financial authorities. Foreign entrepreneurs seeking to establish an EMI presence within the jurisdiction have at their disposal a diverse array of legal forms, each characterised by distinct attributes, advantages, and limitations.

This review shall elucidate the two primary legal entity structures suitable for registering an EMI in Australia: the proprietary company (Pty Ltd) and the public limited company.

Proprietary company (Pty Ltd)

Public limited company

Salient features

Preferred for SMEs and fintech ventures

Suited for larger transactions and offering shares to the public

Shareholders' financial liability limited to their contributions

Allows offering shares to the public

Shareholder base limited to one to fifty members

Subject to rigorous regulatory oversight

Shares not publicly offered

More transparency and disclosure standards

Regulatory obligations

Minimum of one director required, who must be a resident of Australia

Minimum of three directors required, with at least two being residents of Australia

Maintenance of accurate records and periodic financial statements

Mandatory annual general meetings for shareholders

Adherence to stringent financial reporting framework

Compliance with listing rules and continuous disclosure obligations if listing shares on a recognised stock exchange

Fiscal obligations and taxation framework

EMIs operating in Australia are subject to a comprehensive taxation regime, akin to all commercial entities conducting business within the nation's borders. The foundation upon which the taxation liability is determined is the taxable income of the institution, calculated as the net difference between its revenue and allowable deductions, as stipulated by the applicable accounting standards and taxation legislation.


The primary fiscal obligation incumbent upon EMIs in Australia is the CIT. The standard rate of corporate income tax stands at 30% of the taxable income. However, in a bid to foster the growth and development of SMEs, the Australian government has implemented a concessionary tax rate of 25% for entities classified as “base rate entities” whose aggregate annual turnover does not surpass the threshold of AUD 50 million. This preferential tax treatment is designed to stimulate economic activity, encourage investment, and support the growth of the SME sector.


EMIs, in line with the majority of business entities operating in Australia, are required to account for and remit this tax at 10% on the value of taxable supplies. GST is a broad-based consumption tax that is levied on most goods and services sold or consumed within the country. The obligation to register for GST arises when an entity's annual turnover exceeds the prescribed threshold of AUD 75K for commercial enterprises or AUD 150K for not-for-profit organisations. Registration as a GST payer confers upon the entity the right to claim input tax credits for GST incurred on its acquisitions, while simultaneously obligating it to collect and remit GST on its taxable supplies.

Personal income tax

Under the Pay As You Go (PAYG) withholding regime, employers are obligated to deduct income tax from their employees' salaries and wages and remit the same to the Australian Taxation Office. This mechanism ensures a steady flow of tax revenue to the government throughout the financial year, obviating the need for employees to bear a substantial lump-sum tax liability after the fiscal period.

Conducting business as a licensed EMI in Australia

A fundamental tenet of operating under an EMI licence is unwavering compliance with the rules and regulations promulgated by the ASIC and other pertinent regulatory bodies. This compliance regime mandates:

  • Periodic reporting obligations: EMIs in Australia are obligated to furnish regular reports detailing their financial performance, solvency, and adherence to regulatory standards.
  • AML/CTF compliance: the implementation and continuous maintenance of robust systems to combat money laundering and the financing of terrorism are imperative, including stringent customer identification protocols.
  • Data protection and privacy: strict adherence to privacy legislation, such as the Privacy Act, is crucial to safeguard the confidentiality and security of customer information.

EMIs operating in Australia must develop and implement comprehensive risk management frameworks to identify, monitor, and mitigate financial risks, encompassing:

  • Credit risk: the potential for financial loss arising from the failure of counterparties to fulfil their contractual obligations.
  • Market risk: the risk of financial loss stemming from adverse fluctuations in market conditions that impact the value of assets and liabilities.
  • Operational risk: the risk of financial loss resulting from inadequate or failed internal processes, systems, or external events.
  • Legal risk: the potential for financial loss arising from non-compliance with legal or contractual obligations.

To thrive in the Australian market, EMIs must cultivate enduring relationships with their clientele, which necessitates:

  • Service excellence: the provision of high-quality, reliable payment services that cater to the evolving needs of customers.
  • Transparency: clear and comprehensive disclosure of fees, terms, and potential risks associated with the utilisation of EMI services in Australia.
  • Customer support: the establishment of a robust customer support infrastructure to promptly address and resolve customer inquiries and concerns.

To maintain a competitive edge in the dynamic electronic money market in Australia, EMIs must continually invest in innovation and technological advancement, including:

  • Product development: the creation of innovative financial products and services that align with the evolving demands of the market.
  • Digital transformation: The adoption of cutting-edge technologies to streamline operational processes and enhance the efficiency of customer service delivery.
  • Security: ensuring the highest standards of security for payment transactions, including robust measures to prevent fraud and safeguard against cyber threats.

In an increasingly globalised financial landscape, EMIs in Australia must also adhere to international standards and requirements, which may encompass compliance with cross-border regulatory obligations, participation in international payment systems, and adherence to global data security standards.

Projections for the advancement of EMIs in Australia and the global landscape

Prognostications indicate a sustained trajectory of growth and innovation in the sector. This progression shall be shaped by a confluence of pivotal factors, encompassing technological advancements, shifts in the regulatory milieu, evolving consumer predilections, and the overarching global economic landscape.

Technological innovation is poised to remain a paramount catalyst for the growth of EMIs. The application of cutting-edge technologies such as blockchain, AI, big data analytics, and machine learning shall play an instrumental role in the development of novel financial products and services, the enhancement of operational efficiency, and the elevation of the customer experience. In particular, the utilisation of distributed ledger technology harbours the potential to confer greater transparency and security in financial transactions, while AI and data analytics shall facilitate the personalisation of services and the fortification of risk management frameworks.


The regulatory landscape governing EMIs within Australia and on a global scale is anticipated to evolve in tandem with technological advancements and the ever-changing demands of consumers. The primary objective of regulatory authorities shall be to strike a delicate balance between fostering innovation and safeguarding the rights and interests of consumers, while concurrently ensuring the stability and integrity of the financial system.

It is highly probable that novel regulations shall be introduced to govern transactions involving cryptocurrencies and cross-border payments, alongside a heightened focus on compliance with AML/CTF measures. Moreover, there shall be an increased adoption of regulatory sandboxes within Australia and the international community, enabling the testing of innovative financial products and services within a controlled environment.

The appetite for EMI services within Australia and on a global scale is projected to surge in consonance with the proliferation of digital and cross-border payment solutions. Consumers shall increasingly seek out EMIs to provide convenient, efficient, and secure means of conducting financial transactions and managing their personal finances. This shall necessitate EMIs to not only expand their suite of offerings, but also to prioritise the safeguarding of customer data and the maintenance of the highest standards of information security.

EMIs shall persist in their endeavours to extend their presence across international markets, necessitating their adaptability to divergent regulatory frameworks and consumer preferences. Concurrently, there shall be a heightened degree of collaboration between EMIs and traditional financial institutions, technology companies, and regulatory bodies to develop groundbreaking financial solutions and ensure adherence to the requisite regulatory standards.

Matters pertaining to sustainability and social responsibility shall assume an increasingly prominent role in the operations of EMIs, both within Australia and on a global scale. Institutions shall strive to minimise their ecological footprint, embrace responsible lending practices, and allocate resources towards socially impactful initiatives.

YB CASE offers expert services to support and assist in the procedure for establishing an EMI-licensed company in Australia. Thanks to extensive experience in the context of corporate law, our team can provide comprehensive assistance at every stage of obtaining a licence to service electronic payments.

YB CASE aims to facilitate the EMI launch process in Australia, reducing regulatory and operational risks for its clients. A team of professionals develops personalized strategies and solutions, considering the unique needs and goals of each business that wants to contribute to an innovative and competitive financial market.
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