SEMI UK License: How Electronic Money is Changing International Business

Electronic money and applied technologies based on it appeared at the end of the 20th century, when the existing balance of power in the financial market seemed to no longer suggest significant shifts. On the one hand, there are banking giants of the caliber of JPMorgan Chase, HSBC, Bank of America, BNP Paribas. On the other, there are startups developing breakthrough financial technologies (Disruptive innovation), changing the balance of power in the market. A typical example is PayPal, founded in 1998.

One of the great managers said that there are 3 types of technology business. The first is the most widespread, it is an improvement of existing products, services and services. The second is much less common. Companies that have chosen it, with the latest developments "push" the essentially inert market in the right direction.

The third option is an exception to the rule, but it is this one that changes the world around us. Businesses from this group do not just develop the market, but create it from scratch. Having staked out "their" place in the sun, such companies successfully conduct business for a long time without encountering competitors due to their complete absence. A classic example is Apple and its CEO Steve Jobs (Steven Paul Steve Jobs).

The same motives have manifested themselves in the electronic money market. PayPal cannot be called a monopolist. According to some estimates, together with its direct competitor, Stripe, the company controls 63.6% of the market. PayPal's business model is constantly changing, new services are being developed. But the company has not yet gone beyond the consumer segment.

History of regulation of the electronic money market

For the first few years, digital financial service providers de facto operated in a legal vacuum. There was simply no relevant legal framework. Standard banking laws adapted for electronic money were used to regulate the market. Therefore, approaches to control in the EU, the USA and Asia were very different.

The first example of the successful development of a specialized regulatory framework that was mandatory for implementation in several countries was the EU Electronic Money Directive (EMD) (Directive 2000/46/EC), adopted in 2000. Further development of the ideas and approaches to regulation laid down in the document was the later EMD2 Directive (Directive 2009/110/EC).

One of the most important innovations of EMD2 is the legal fixation of the very concept of an “electronic money institution”. This step allowed to bring order, if not to the regulatory laws (this did not happen in 2025), then at least to the terminology. The second article of EMD2 interprets the concept of "electronic money institution" as "a legal entity that has received permission to issue electronic money". The emergence of EMD2 actually brought the concept of licensing into real life, the digital money business was brought out of the shadows. Companies that wanted to work in this financial services sector began to prepare to submit applications, one of the first was the startup Skrill. The UK's exit from the European Union (Brexit) only increased the popularity of the United Kingdom, since the issuance of licenses for electronic money business was no longer tied to EU directives. The current balance of power remains in general terms in 2025.

UK E-money License

UK EMI license is a special permit issued by the UK Financial Conduct Authority (FCA). The license allows you to legally conduct business with electronic money and provide clients with a range of financial services.

Formally, the UK EMI license is valid only in the UK. But the reputation of financial companies registered in the United Kingdom in the global business space is so high that a British license is often used as the main legal document legitimizing business transactions.

What services and services can a financial company with an EMI (SEMI) license offer to its clients:

• issuance of electronic money;
• provision of payment services;
• commercial operation of payment systems;
• services related to the storage of assets;
• currency transactions;
• storage and processing of data;
• additional services related to electronic money;
• maintenance of payment accounts (including for transactions that are not related to the issuance of electronic money);
• opening accounts (with issuance of IBAN);
• bank transfers (including without opening an account);
• issuance of payment cards.

The opportunities provided by the UK EMI license make the UK EMI license one of the most advantageous permits of this class. The options for doing business (very importantly - legal business!) are practically unlimited. Alternative jurisdictions are Poland, Curacao, Lithuania, Malta, Singapore. They may be the best replacement for the UK and its UK EMI license. But only for individual cases, when compliance with custom specifications is more important than versatility and legal transparency. In all other cases, the UK EMI license can be considered a basic, main option.

Types of EMI licenses

At the time of writing, the UK has regulations based on the 2011 legislation and EMD2. They distinguish 2 types of licenses for electronic money - EMI / AEMI (Adaptive Electronic Money Institution) and SEMI (Small Electronic Money Institution). Both business permits are very similar - there is no difference in the volume of services, functionality, validity period and features of obtaining (documents, terms).

In fact, AEMI and SEMI differ in the minimum initial capital and the permitted volume of transactions:

• EMI / AEMI. The minimum initial capital is from 350 thousand EUR or 2% of the volume of electronic money (the larger is used). The company is obliged to adhere to the amount of initial capital sufficient for doing business.
• SEMI. Initial capital - not less than 2% of the volume of electronic money. A company generating an electronic money volume of 500 thousand EUR during business must maintain an initial capital of at least 2%. If the final value cannot be calculated precisely, it is estimated based on the approved business plan and recommendations of the national regulator. The limitation of the SEMI e-money license is an average balance of no more than EUR 5 million, and the transaction volume is up to EUR 3 million per month. If the maximum figures are exceeded, the company must apply for an EMI e-money license.

Standard qualification requirements for an EMI license

The licensing conditions are quite strict, but they can be met. The FCA adheres to the rules set out in the current legislation, the element of bias is minimized. This is what distinguishes the UK from other countries issuing licenses for e-money businesses. Predictability allows you to prepare for the permitting procedure, which reduces the likelihood of refusal and simplifies legal actions.

Minimum requirements:

• Initial capital for EMI - from 350 thousand EUR or 2%, for SEMI - from 2%;
• a detailed business plan (description of work processes, resources used, budget and cash flows for 3 years);
• a description of the internal control and risk management system used;
• special requirements for persons who own large blocks of shares and / or can have a significant influence on business decisions;
• a description of protective measures for e-money holders;
• unconditional compliance with AML / CTF provisions.

But the formal requirements for EMI/SEMI license candidates are only part of the conditions that must be met. De facto, companies applying for a UK e-money business license must meet a number of informal requirements that are not legally recorded anywhere.

Additional conditions for issuing EMI / SEMI licenses in the UK (note that they are not included in the relevant regulations):

• at least 5 employees on staff;
• separate positions of CEO, anti-money laundering compliance officer, CFO and two resident directors (all of these persons must have relevant work experience);
• one of the directors must be a UK resident;
• only licensed and approved software;
• a physical office in the UK (in general, the company must ensure substance - a real economic presence in the UK);
• authorized capital - at least 1 million GBP;
• financial forecast for 5 years of operation;
• fully paid taxes for 3 years of operation (including personal income tax);
• financial safety cushion (at least 350 thousand GBP).

What does this mean for business? At a minimum - the practical impossibility of independently obtaining a UK license for electronic money. Theoretically, such a scheme is permissible, but we do not know of any examples of its successful application in practice.

You can, of course, try to "save". But you will quickly see that you cannot obtain a license for electronic money in this way. The procedure for obtaining a business permit will drag on for years (and this is not an exaggeration), but you will not be able to start working with clients.

Obtaining a license for an EMI/SEMI business in the UK

The order of steps largely (if not exclusively) depends on the specifics of a particular case. The approach to fulfilling a client's order that we use not only ensures the maximum possible savings in time and money. The main advantages of our method are a significant reduction in the probability of refusal and transparency of all legal actions. At any given time, we know what stage we are at, are ready to give the client a detailed report and provide any legal advice. This approach simplifies the launch of an electronic money business in the UK, makes it simple and understandable for the client.

Stages of obtaining EMI/SEMI licenses:

• assessment of the calculated business model;
• selection of the optimal legal structure;
• registration of a company in the UK;
• submission of an application for an electronic money business license.

Level of expenses

If you focus on the requirements of the UK national regulator, you can conclude that launching a business project is not associated with large expenses. But the electronic money segment is a special case, simple rules of addition do not apply here. Financial requirements de facto and de jure can differ greatly. Other "experts" reduce expenses to the cost of registering a company in the UK and opening a bank account, which creates a distorted picture of reality for their potential clients.

Roadmap of minimum financial requirements (* - additional service):

• authorized capital - from 350 thousand GBP;
• company registration in the UK - from 1250 GBP;
• opening a bank account - from 1500 GBP;
• office rent in London - from 700 to 1500 GBP (depending on the area, area, prestige, level of technical equipment and other factors);
• position of compliance officer* - from 1900 GBP per month;
• Director* — from 7,000 GBP per month.

But these figures are just the tip of the iceberg. It is extremely difficult to accurately calculate the amount of legal work to meet FCA requirements. Their accounting is associated with significant costs, the entire procedure takes quite a long time — from 1 year or more. Therefore, third-party expert support is not just desirable, but a mandatory condition if you really want to get a UK license for an electronic money business.

Plastic card support (using Mastercard as an example)

Efficient business with electronic money is only possible with a comprehensive approach, when traditional financial instruments are integrated into digital solutions of the 21st century. Therefore, companies that deal with electronic money strive to provide customers with the opportunity to use bank cards.

For international business, the choice comes down to two payment systems - Mastercard and Visa. But consumer comfort is associated with additional costs. A company that has received a license for electronic money in the UK and wants to issue its own payment cards must agree with Mastercard or Visa.

The level of expenses for integrating Mastercard solutions (for example, with support for EUR, USD and GBP):

• minimum deposit - from 100 thousand EUR;
• risk check of the company's business - 5 thousand EUR;
• software and hardware solutions that allow integrating support for payment systems into the company's business - 10 thousand EUR / month;
• Secure Code support - 3 thousand EUR / month.

EMI / SEMI license in the UK and other countries

Clients often ask to tell them about possible alternatives. We select several options for their case, most often these are Lithuania, Malta and Singapore. Direct comparison of jurisdictions in this case is not entirely correct, since an electronic money license is an exclusively individual project, standard solutions do not work here.

Therefore, for a number of cases, Lithuania, Malta or Singapore will be good options, which does not cancel the attractiveness of the UK electronic money license. In any case, the final choice should be made only after an accurate assessment of all the pros and cons. You can get additional information on this topic from our specialists.

Minimum initial capital (compared to the UK):

• Lithuania. EMI - from 350 thousand EUR, it must be maintained constantly. SEMI - no more than 900 thousand EUR of outstanding electronic money. If the rule is not met, an EMI license is required.
• Malta. EMI - similar to the UK. SEMI — not less than 50 thousand EUR or 100 thousand EUR (depending on the volume of issued electronic money — up to 1 million EUR, from 1 to 2 million EUR).
• Singapore. EMI (MPI) — from 250 thousand SGD. SEMI (SPI) — from 100 thousand SGD. In both cases, it must be maintained.

Volume of payment services (missing services are indicated in comparison with the UK):

• Lithuania. Data storage and processing.
• Malta. Data storage and processing, maintaining payment accounts for transactions not directly related to the issuance of electronic money.
• Singapore. The approach adopted by MAS (Monetary Authority of Singapore) is very different from the European one, so a direct comparison is impossible. In general, the list of services is limited.

Transaction volume limits (in comparison with the UK):

• Lithuania. EMI — no limits. SEMI — no more than EUR 900,000 in outstanding electronic money for 6 months, for payment services not related to the issuance of electronic money — no more than EUR 3 million per month (for the last year, evidence must be provided).
• Malta. EMI — no limits. SEMI — balance no more than EUR 2 million.
• Singapore. EMI (MPI) — no limits. SEMI (SPI) — no more than SGD 3 million per month (for each payment service), up to SGD 6 million per month (if there are two or more services).

Service passporting:

• United Kingdom. Only in Gibraltar (there are special conditions), in other countries — through obtaining a national license or partnership with a foreign company that has an EMI / SEMI license.
• Lithuania. Yes (you need to comply with local laws and open a branch, only for EMI).
• Malta. Similar to Lithuania.
• Singapore. No (like in the UK).

Marketing of services in the European Union:

• United Kingdom, Singapore. No, only through obtaining a national license in any EU jurisdiction.
• Lithuania, Malta. Notification of the national regulator is required, the list of services is limited.

Stability of the regulatory framework:

• United Kingdom, Singapore. No changes are expected in the next few years.
• Lithuania, Malta. After the adoption of the PSD3 (Payment Services Directive 3) directive, the rules for issuing licenses for electronic money and legislative regulation of such businesses may become stricter.

Corporate income tax:

• United Kingdom. Standard rate - 25% (profit from 250 thousand GBP), sliding rate (from 50 thousand GBP to 250 thousand GBP), 19% (less than 50 thousand GBP).
• Lithuania. 16%.
• Malta. 35%, but after paying tax and distributing dividends, the company's shareholders can receive a refund of 5/7 or 6/7 of the tax paid (passive and active income).
• Singapore. 17%.

Potential domestic client base:

• Great Britain. 67.3 million + 32.5 thousand (Gibraltar, through passportization).
• Lithuania. 2.8 million + 453 million (passportization in the European Union).
• Malta. 518.5 thousand + 453 million (passportization in the European Union).
• Singapore. 5.5 million.

Conclusion, findings

A business based on electronic money is one of the main drivers of the modern digital economy. The services of traditional banks are still in demand, but the shift in emphasis, launched with the emergence of PayPal, became very clear in 2025. The legislative framework regulating digital money is under active development, so the entry threshold remains relatively low.

Choosing a jurisdiction for registering a company that will work with electronic money is a task with many unknowns. There is no universal solution that is equally suitable for all cases. Any choice you make should be based on an assessment of the balance of characteristics, and not on searching for an abstract “best” jurisdiction.

In addition to the UK, Lithuania, Malta and Singapore, you can also consider other countries - Poland, Panama, UAE, Curacao. But remember that obtaining a license for electronic money in any case is associated with significant costs, the approval procedure is long, it requires the participation of qualified experts.

Why we recommend the UK for obtaining EMI / SEMI licenses:

• stable and predictable regulation;
• freedom in decision-making (no forced binding to EU directives);
• very high reputational component;
• relatively simple connection of Visa / Mastercard payment systems;
• large domestic market;
• well-developed corporate legislation;
• developed banking sector;
• powerful and diversified economy.

To obtain EMI / SEMI licenses, please contact the experts of IT-OFFSHORE and discuss all available questions with them.