The Process of Acquiring a Fintech License in Latvia
In Latvia, fintech is one of the fastest-growing sectors and is keeping pace with global trends. In 2021, the number of startups that were fintech companies increased by 57% compared to 2019. Out of 400 startups, 118 were fintechs.
To operate as an electronic money institution in Latvia, a license must be obtained from the Bank of Latvia. The license application process typically takes around eight months and involves several steps, including:
Minimum Initial
Capital Requirement The minimum initial capital for a fintech company in Latvia must not be less than 350,000 EUR.
Preparation of Information
Entrepreneurs must prepare information on the shareholder, stockholder, and officials of the enterprise. This includes disclosing general information on the type of capital financing and the origin of funds, and preparing information on the planned business model. At this step, CVs of the shareholder, stockholder, and officials, the service description, and general information on the planned capital financing and origin of funds must be submitted.
Submission of Application and Payment
The next step involves submitting a fully completed licensing application with all the necessary information and documents. If requested by the Bank of Latvia, additional information should also be submitted. A payment of 450 EUR must also be made for the examination of documents and information submitted for obtaining the license of an electronic money institution.
Assessment Process
During the assessment process, the applicant must make necessary corrections and submit missing information and documents.
License Acquisition
The final step is the acquisition of the license after the Bank of Latvia has granted its approval. No additional costs are needed for obtaining the license.
Required Documents for Submission
The following documents must be submitted with the application:
- Program of operations of the institution
- Business plan of the institution
- Evidence of the existence of the initial capital
- Description of the measures taken for safeguarding the money of payment service users and electronic money holders
- Description of the internal control system and risk management
- Procedures of the institution which ensure the establishment and efficient operation of the internal control system for the prevention of money laundering and terrorism and proliferation financing, including a detailed assessment of the risk associated with the services provided
- Description of the structural organization of the institution
- Information regarding the identity of the persons who have acquired a qualifying holding directly or indirectly in the institution
- Information regarding the members of the board and council of the institution
- Information on a sworn auditor
- Articles of association of the institution
- Description of the internal control and management system of the institution in relation to security incident management
- Description of the processes developed to record, monitor, track, and restrict access to sensitive payment data
- Description of the institution’s commercial activity continuity arrangements
- Description of the process for compiling statistics on the performance of the institution
- Information to be included in the description of information systems security policy, including a procedure or policy
- Policies and procedures for supervision and control of outsourcing functions
- Policy and procedure regarding supervision and control of agents and branches
Fees
Electronic money institutions that have received a license from the Bank of Latvia must pay 7,000 EUR per year for financing the activities of the Bank of Latvia. Additionally, they must pay up to 1.4% (inclusive) of their gross income related to the provision of electronic money institution services per year, but not more than 100,000 EUR per year.
Contact VALCORP in Latvia to license your FinTech patent in Latvia by contacting us in email: info@valcorp.eu or via call +372 55658650