Key Features

The term “Payment Institution” refers to a category of payment service provider that facilitates or acts as an intermediary in a cash transaction.

The regulation of payment institutions falls under the scope of the Financial Services (Investment and Fiduciary Services) Act 1989 (“the Act”) and specifically, the Financial Services (EEA)(Payment Services) Regulations 2010 (“the Regulations”).

Payment services may consist of:

  • Enabling cash withdrawals
  • Enabling cash to be placed in a payment account
  • Credit transfers, including standing order
  • Issuing payment instruments or acquiring payment transactions; or
  • Money remittance.
  • Any firm wishing to provide these type of services must be authorised or registered by the FSC as a payment services institution and is required to comply with certain rules when providing services or completing payment transactions.

There are two types of payment institutions:

  1. Authorised payment institutions: Institutions which will be authorised to provide one or more payment services and who will be required to comply with all legislative requirements.
  2. Registered payment institutions: Institutions able to carry out certain payment services and to whom the FSC grants a waiver so that are not subject to all the legislative requirements, as long as can demonstrate that meet the following conditions.
  3. Turnover does not exceed €3 million of payment transactions per month; and
  4. None of the persons responsible for the management of the business have been convicted of financial crime.

These institutions do not have the right of establishment, or the freedom to provide services (cannot passport), nor can they indirectly exercise those rights when being a member of a payment system, outside of Gibraltar.

A payment institution, whether authorised and registered, can apply for one of the below three classes of licences, depending on the services to be provided:

  • Class A – Money remittance
  • Class B – Execution of payment transactions where the consent of the payer to execute a payment transaction is given by means of any telecommunication, digital or IT device and the payment is made to the telecommunication, IT system or network operator, acting only as an intermediary between the payment service user and the supplier of the goods and services.
  • Class C – Services enabling cash to be placed on a payment account as well as all the operations required for operating a payment account. Services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account. Execution of payment transactions, including transfers of funds on a payment account with the user’s payment service provider or with another payment service provider

Legal Requirements

Requirements

Description

General

  • Corporate  vehicle permitted

Company, Limited Partnership

  • Local physical office required

No

Share capital or equivalent

  • Minimum paid up capital

Class A Licence: €20,000

Class B Licence: €50,000

Class C Licence: €125,000

Directors

  • Minimum number

2

  • Corporate directorship allowed

Yes

  • Local director required

No

Shareholders

  • Minimum number

2

  • Corporate shareholders allowed

Yes

  • Local  shareholders required

No

Service Providers Required

  • Company Secretary

Yes

Tax Treatment

  • No Corporation tax on income accrued and derived outside Gibraltar
  • No requirement to withhold tax on dividends or on redemption of shares
  • No inheritance, capital gains tax, wealth tax or VAT
  • No withholding tax on dividends paid to non-resident companies or individuals

Duration to Set Up

3 months

Distinctive Benefits of Licence

  • Low setup costs
  • Quick and easy regulatory notification process
  • No investment restrictions
  • Favourable tax environment

The Valsen Advantage

  • End to end comprehensive service
  • Speedy and efficient service
  • Expert advice on structuring options
  • Dedicated ongoing compliance support
  • Extensive network pool of service providers