Obtaining an e-money licence in Singapore

28.03.2024

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Obtaining an e-money licence in Singapore

An overview of the e-money market in Singapore

Obtaining an e-money licence in Singapore demonstrates significant growth and innovation, making establishing an e-money licence in the country a strategically important step for fintech companies. Singapore is one of the leaders in financial technology due to its favourable regulatory climate, advanced technology infrastructure and strong government support for innovation.

Registering an e-licence in Singapore gives companies the key to actively participate in the fast-growing e-payment segment, covering a variety of services from online payments and mobile transactions to remittances and advanced payment innovations. The move not only favours the development of companies but also strengthens Singapore's fintech ecosystem.

It should be emphasised that the e-money sector in Singapore is under strict supervision to ensure security and confidence in financial transactions, highlighting the importance of licensing in this area. Controls extend to aspects of cybersecurity, data protection, transparency of transactions and compliance with anti-money laundering and anti-financing of criminal organisations standards.

As a result, the e-money market in Singapore is a magnet for fintech firms, offering licensees extensive opportunities for innovation, growth and scaling within the global financial industry.

Main requirements for obtaining a licence

Legal requirements

Applying for an e-money licence in Singapore is a complex process that requires companies to comply with a number of legal requirements. These requirements ensure that the company is prepared to provide responsible financial services and is able to maintain high standards of business conduct.

Must be a registered business in Singapore or a representative office of a foreign company in Singapore.
It is mandatory to have an established place of business in Singapore or an official registered address where all company documents and records can be safely stored.
A minimum of one employee must be responsible for being present at the business centre or registered premises to communicate with customers or handle their enquiries.
At least one executive director who is either a Singapore citizen or permanent resident status holder or an executive director with a Singapore work permit (EP) and a minimum of one other director who is also a Singapore citizen or permanent resident must be appointed.
Start-up capital: to apply for an e-money licence, you must prove that you have sufficient start-up capital. In Singapore, this is an amount of at least $75,000, which is proof of the company's financial strength and its ability to cover potential risks.

Thus, obtaining an e-money licence in Singapore requires careful preparation and compliance with regulations, which helps to ensure the reliability and transparency of the country's financial sector.

The process of obtaining a licence

Preparation and submission of necessary documents

Obtaining an e-money licence in Singapore requires the preparation and submission of a number of key documents, which include the articles of incorporation, a plan of operation, and a description of the management and control system. Below is a table detailing each of these documents and their role in the licensing process.

Document	Description
Articles of Association	Should include basic provisions on the structure and operations of the company, including goals and objectives, governance structure, rights and obligations of the founders and managers. It is the fundamental document that defines the legal basis for all company operations.
Activity Plan	A detailed description of the company's proposed business, including the types of services to be provided, target markets, development strategies and financial projections. This document shows regulators that the company has a clear vision for its future and is capable of operating a sustainable e-money business in Singapore.
Account of the governance and restraint mechanism	Comprehends data concerning intrinsic methodologies and directives, gubernatorial frameworks, jeopardy restraint and surveillance mechanisms. This manifests to overseers that the establishment is proficient in efficiently administering hazards and ensuring an elevated echelon of corporate stewardship.

These documents are the cornerstones to demonstrate a company's readiness and competence to conduct business with an e-money licence in Singapore, highlighting its transparency, reliability and compliance with regulatory requirements.

Main stages of obtaining a licence

Obtaining an e-money licence in Singapore is a multifaceted process that requires detailed verification and analysis of the application by the Monetary Authority of Singapore (MAS). The steps in the procedure are designed to ensure that the company meets the established criteria and standards.

Stage 1

Preparation stage: This stage requires the preparation and compilation of all required documents and data for submission. This includes a developed business plan, business forecasts, data on the management team, and approaches to risk management and control procedures.

Stage 2

Submission: when all materials are ready, the company submits the application to MAS, often using an electronic system to transmit documents.

Stage 3

Preliminary screening: the MAS analyses the application for completeness and accuracy of data, requesting additional information or clarification if necessary.

Stage 4

Profound scrutiny: this juncture encompasses a meticulous examination of the data tendered, encompassing an evaluation of the commercial tactic, pecuniary steadiness, the credentials of the executive cadre, and the sufficiency of peril governance and command frameworks.

Stage 5

Decision-making: MAS draws conclusions based on its analysis and decides whether to grant a licence that will allow the company to operate in the e-money industry in Singapore.

Stage 6

Continuous monitoring: once a company is granted a licence, it is subject to continuous monitoring by MAS to ensure compliance with regulatory requirements.

This licensing process ensures that only suitable and responsible companies operate in Singapore's e-money industry, contributing to the integrity and stability of the nation's financial environment.

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Additional aspects and requirements

Importance of AML policy and having an AML officer in the company

Opening a firm with an e-money licence in Singapore requires strict compliance with anti-monopoly regulations (AML) and a qualified AML officer. These requirements play a key role in ensuring financial security and transparency, which is particularly important in the e-money industry, which is exposed to various financial risks.

The Importance of AML Policies:

AML policy is a fundamental part of a firm's management and operational structure. It ensures compliance with international and local regulations, helping to prevent money laundering and the financing of criminal organisations. Implementing an effective AML policy helps to identify, monitor and report suspicious transactions and to screen clients for financial reliability.

Presence of an AML officer:

The AML Officer plays a central role in ensuring the firm's compliance with antitrust policies. This professional is responsible for developing, implementing and monitoring AML-related processes, including client screening, transaction tracking and staff training. The AML Officer is also the primary point of contact for regulators in the event of any AML-related questions or inspections.

Setting up an e-money licensed firm in Singapore without strict adherence to AML policies and without a qualified AML officer can expose the company to significant legal and financial risks, including fines, loss of reputation and even licence revocation. These aspects are therefore an integral part of the licensing process and the continued operation of the firm's e-money business.

Development of a business model and business plan, compliance with international standards and practices

Launching a business in Singapore with an e-governance licence requires careful design of a business structure and plan that is consistent with local and global regulations and practices. In this context, there are several key elements to consider.

Building a business model: When developing a business model for an e-money licence company in Singapore, it is critical to analyse the specifics of the Singapore market and regulatory requirements. You need to clearly define what value your business offers, revenue streams, core operations, resources and key partners. Attention should be paid to data and transaction protection strategies, risk management and adaptation to anti-money laundering policies.
Writing a business plan: the business plan should detail the strategy and practical steps to launch and expand operations, including plans for marketing, sales, financing and forecasting. It is critical to demonstrate awareness of market trends, competition and legislative frameworks, and to provide a clear map of the path to financial stability and growth.
Alignment with international standards: The business must comply with global standards, especially in aspects of financial transactions, data protection and antitrust compliance, implementing global practices in risk management and data security.

Initiating a business in Singapore with an e-money licence is a multi-layered task, involving in-depth market research, strict adherence to regulatory requirements and implementation of international best practices. This approach will ensure a robust and prosperous enterprise in Singapore's competitive and rapidly changing environment.

Advantages of obtaining a licence

Setting up a business with an e-money licence in Singapore provides many opportunities for companies to develop and expand their services. The table below summarises key business opportunities in the context of cross-border transfers, payment processing, and e-money issuance and distribution.

Business opportunity	Description
Cross-border transfers	Allow the company to offer money transfer services abroad, which is in demand for both personal and corporate purposes. This helps to strengthen international ties and expand the client base.
Payment processing	Enables payment processing operations for third parties, including online shops, merchants and other business entities. This includes accepting and processing payments from customers through various payment systems.
Issuance and distribution of electronic money	Allows companies to issue their own electronic cash that can be used for a variety of purposes, including e-commerce and transfers. Also includes the management and distribution of these funds to users.

These fortuities unfurl a plethora of thoroughfares for enterprises to cultivate and furnish avant-garde pecuniary amenities in the Singaporean marketplace and beyond. Enrolling a venture with an e-money charter in Singapore situates the enterprise at the vanguard of the fintech sector, guaranteeing its renown as a reliable and ingenious pecuniary amenities purveyor.

Conclusion

Acquiring an electronic pecuniary authorization in Singapore is a pivotal juncture for enterprises seeking to establish a reputation in the nation's avant-garde and swiftly burgeoning fintech domain. This phase not solely verifies that the enterprise adheres to the stringent decrees and lucidity prerequisites established by the Monetary Authority of Singapore (MAS), but also furnishes an extensive array of commercial prospects such as global remittances, transactional handling, and e-funds administration.

The licence goes beyond the usual transaction authorisation, it symbolises standards of quality and reliability for business partners, investors and customers. Companies that successfully pass the licence confirm their dedication to high standards in the areas of anti-money laundering, counter-terrorist financing, risk management and corporate ethics, which is critical in a world where trust and security play a key role.

Ultimately, licensing for e-money in Singapore not only provides access to the emerging financial technology sector, but also fosters innovation and strengthens the global economic infrastructure, with Singapore acting as a leading fintech centre. It is a strategic initiative for companies looking to grow globally and strengthen their position in the financial world.

We offer personalised advisory support and assistance at every step of the process. To contact us, go to the Contact Us section of our website and choose your preferred method of communication. Our experts are ready to provide all the necessary information, answer your questions and help you start your journey to obtaining a licence in Singapore.

Tags: Singapore license EMI