Gibraltar combines a warm, Mediterranean climate and a vibrant lifestyle with robust economic growth and a favourable tax regime. It has a great international reputation for stability and efficiency, thanks to its well-developed infrastructure and cautious regulatory framework. Gibraltar's tiny population and close-knit community allows for quick time to market and easy access to the jurisdiction's key decision makers. For these and other reasons, Gibraltar is home to a number of important organisations from a variety of industries, including insurance, gaming, real estate, and cryptocurrency, and is the jurisdiction of choice for foreign companies seeking to establish a strategic European presence.

This ease of doing business is also reflected in the financial licenses that Gibraltar offers. The financial licenses are mainly of two types. To know more about the financial licenses available in Gibraltar, read on!

Electronic Money Institutions (EMI)

Electronically stored monetary value, including magnetically recorded monetary value, represented by an issuer and accepted by a person other than the electronic money issuer is referred to as e–money. Prepaid cards and electronic prepaid accounts for use online are examples of e-money.

The Financial Services (Banking) Act 1992 and, more specifically, the Financial Services (Electronic Money) Regulations 2011 (“the Regulations”) apply to e-money Institutions. All subsidiary legislation to the Act should be followed by e-money institutions.

What Is Included in the License?

An e-money Institution has the authority to issue and redeem e-money, which can be done either through a physical location or through an Agent or Distributor.

E-money institutions are divided into two categories.

Authorised e-money Institution and Registered e-money Institution are two types of e-money institutions.

Both of these categories of e-money institutions must comply with certain requirements and give the appropriate information in order for the GFSC to effectively monitor and supervise them.

It is important to know that registered e-money institutions are not permitted to passport their services.

Distributors and Agents

Agents and distributors may be appointed by an e-money Institution. Agents are in charge of distributing and redeeming e-money as well as providing payment services. The GFSC must be notified of them. E-money is distributed and redeemed by distributors who do not provide payment services. These must be reported to the FSC. E-money cannot be issued by an agent or a distributor; only a telecommunications company can do it.

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Capital Requirements

An licenced e-money Institution must have the following initial and ongoing capital requirements: €350,000; or 2.2 percent * of total outstanding electronic money (as estimated at the time of application), whichever is greater.

A small or registered e-money institution must have an initial and continuous capital requirement of 2.2 percent of the average outstanding electronic money.

Firms with several licences may be required to hold the total amount of capital required for all of their licences before being allowed to execute the intended activity, as well as on a continuing basis. The GFSC will assess the level of capital in certain circumstances. It is recommended that you speak with the GFSC about this before submitting your application.

The GFSC recommends that the minimum requirements imposed by the second Electronic Money Directive (2009/110/EC) be increased by 20% under Schedule 2, paragraphs 15 and 16 of the Financial Services (Electronic Money) Regulations.

Distributed Ledger Technology (DLT)

The DLT legislation advances Gibraltar as a destination that supports development of DLT businesses while keeping up with administrative and compliance objectives, and encourages prerequisites for vigorous and speedy communications with experts in this quick moving industry. 

The DLT structure identifies tasks that utilize DLT for the exchange or capacity of significant worth having a place with others that are not dependent upon some other administrative system. Firms that are administered by another arrangement of rules will keep on being represented by that arrangement of rules. 

Novel business procedures, items, and plans of action require an adaptable, versatile methodology. Gibraltar accepts that administrative tasks are as yet significant, yet that they can be achieved successfully through the use of standards as opposed to inflexible guidelines. This is based on the grounds that guidelines that a set in stone can immediately become outdated and unsatisfactory for reasons that the firms are dependent on ceaselessly developing innovation.

Regulatory Principles

1.  A DLT authorized organization should be straightforward and reliable in its dealings
2.  A DLT authorized association will care about the interests and needs of all of its clients, and should communicate with them in a reasonable, clear, and non-deluding way.
3. A DLT authorized association ought to have adequate monetary and non-monetary assets.
4. A DLT certified association should appropriately oversee its organization, just as lead it with important expertise, care, and diligence, considering dangers and risks to its business and clients. 
5. At the point when a DLT authorized association is responsible for customer resources and cash, it should have sufficient instruments set up to secure them.
6. Diligent corporate management is expected of a DLT licensed association.
7. A DLT authorized association should keep up with sufficient expectations for all frameworks and security access conventions.
8. A DLT authorized association should set up techniques to distinguish, identify, and report monetary wrongdoing dangers, for example, tax evasion and warfare subsidizing.
9. A DLT certified association should be versatile and have alternate courses of action for a smooth and productive exit from the business.

Authorisation Processes

Gibraltar Financial Services Commission is dedicated to meeting service level criteria of three months for the evaluation of a DLT accredited organisation application. Because of the diverse nature of prospective applicants and the broad extent of the framework, businesses are strongly recommended to seek guidance from one of the local professional advisers to evaluate whether their proposed business model falls within the DLT framework's scope. 

It's also a good idea to get in touch with the GFSC's Risk and Innovation team as soon as possible. Initially, the Risk and Innovation team will be in charge of evaluating authorization applications. They have made several changes to the authorisations procedure to reflect the young and inventive character of DLT, including the addition of an initial application assessment and a full presentation.

Though Gibraltar is very strict re licence issue, process is similar to applying for EMI/PSP licence or even stricter. As a result only 13 companies managed to get a licence since 2018,

MUNDO has partnered with top professionals in the area and will help you to get a license required for your business. Don’t hesitate to contact us for more information!