Payment service provider license in Georgia

The service isn’t available.

A payment service provider license in Georgia is an instrument that will greatly facilitate your admission to the marketplace for digital payment and settlement systems and transfers, additionally it will also considerably optimize costs because of a positive tax regime in Georgia. The country practically lets you operate in a zero-tax regime especially if you operate at an international scale. Furthermore the country has maximally simplified the registration and set up of business – which is why Georgia has been ranked second on Doing business rating for numerous years in a row.

Benefits of having a PSP license in Georgia

PSPlicense is issued by the National Bank of the country and gives the right to:

• debiting
  and crediting funds;
• directdebit
  of theaccount using a payment card or other financial instrument, as well
  as for credit payments within the established amounts;
• emission
  and acquiring of electronic money and other payment instruments;
• service
  ofmoneytransfers;
• servicing
  transactions with electronic moneyperformed by a smartphone, via the
  Internet or in another way;
• execution
  of a transactionbased on the consentreceived from the payer using a
  telecommunications, digital or information technology device for the benefit of
  the payment system or a network operator playing the role of an intermediary
  between the payer and the recipient.

Companies that have a payment system provider license in Georgia are able to service international money transfers, non-cash payments between individuals and companies, purchases of goods and services in online stores.And also use the tax advantages of the jurisdiction for doing business in the markets of other countries.

What operations can be provided by the owner of a payment system provider license in Georgia?

Companies with aPSPlicense get the opportunity to:

• place
  customers’ electronic money on their accounts;
• make
  transfers both within own payment system and outside it;
• issue
  payment cards and own e-currency;
• provide
  payment services to third parties;
• open
  aMerchantaccountto service payments;
• carry
  out transactions with bitcoins and other virtual money.

The latter is especially important for Georgia, since this country ranks 3rd in the world in terms of the volume ofcryptocurrency mining

Payment services market in Georgia

A payment system provider license in Georgia is becoming increasingly more popular.Since the market for electronic payment services in the country is still young, it is constantly developing.For example, the number of remittances isgrowing steadilydespitethe economic crisiscaused by the coronavirus pandemic.In July 2020, the volume of transfers increased by 22.1% compared to the same period last year.In total, during the reporting period, inflows from abroad to Georgia amounted to 188.7millionUSD, and for the whole of 2019 – to 1.7 billionUSD.And the financial market is actively developing and growing in the country, the number of non-cash transfers and purchases in online stores is increasing.

According to the National Bank of Georgia, the number of transactions using electronic money reached the level of March 2020 and the market began to gradually revive.Recall that this was the month when the country introducedquarantine related restrictions.

Volumes of transactions carried out byPSP-providers in Georgia:

In total, 30 companies have a payment system provider license in Georgia as of August 17, 2020, all of them are registered in Tbilisi.

As you can see from the table, most of the currentPSPproviders operate in Georgia in the form ofLLCand were registered in 2018.There are also 2 newcomers on the market -InexPayandDMServicesentered the payment services market in 2020.

Requirements for PSP providers in Georgia

A payment system provider license in Georgia is available to those companies which meet the following requirements:

• form of business: limited
  liability company or joint stock company;
• presence of a legal address
  and office on the territory of Georgia;
• authorized capital in the
  amount of GEL 250,000 (must be formed at the time of registration of the
  license);
• no convictions among founders
  and leaders of the company.

The advantages of company registration in the local jurisdiction is that in Georgia the payment system provider license is granted, even if there are foreigners among the founders.At the same time,there are no restrictions on the number of founders, directors, employees.

Payment system provider license in Georgia: list of required documents

In order to serve transactions with electronic money, international transfers,merchantaccounts in Georgia, you will need to undergo the licensing of the company by the National Bank of the country, and for that purpose, the following set of documents is required.

• completed
  form according to the established template;
• a
  list of payment services that the provider plans to provide;
• a
  schematic description of each payment service, including information on the
  method of data transmission at the time of the beginning of the transaction to
  its completion;
• a
  description of the electronic system that will service transactions, including:
  a list of hardware and software with an indication of the
  manufacturer;list of communication means and encryption
  algorithms;description of the program interface;
• an
  extract from the Public Register of Entrepreneurs and Non-Entrepreneurial Legal
  Entities;
• a breakdown
  of the authorized capital, up to the final beneficiary;
• documents
  allowing to identify the owner of the company;
• certificate
  of no criminal record of the beneficiary (not older than 60 days, if issued by
  the authorities of foreign states);
• lease
  agreement, purchase / sale / gift agreement or other document confirming the
  right to use or own the real estate where thePSPcompanyoffice
  will be located;
• business
  plan for the provision of payment services in Georgia;
• licenses,permits,
  ifavailable.

Attention!!!All documentsissued by the authorities of foreign states must be translated into Georgian and notarized.

Payment system provider licensing procedure in Georgia

A payment system provider license in Georgia is issued after the successful completion of the following procedure:

1. Preparation
   of constituent documents (all documents must be in Georgian).
2. Registration
   of a company in the form of LLC or JSC in the House of Justice in Georgia
   (takes 1-2 business days and costs 100 or 200 GEL, depending on the speed of
   registration).
3. Opening
   a corporate account in a Georgian bank and formation of statutory capital.
4. Submission
   of documents to the National Bank of Georgia.

The regulator issues the resolution to register aPSPcompany in Georgia within 60 calendar days after receiving the complete package of documents.In case ofinaccuracies or incompleteness of documents package, the applicant is given 30 calendar days to eliminate the deficiencies.

Attention!!!If the second statement on the elimination of inaccuracies/deficiencies is not delivered to the address of the legal entity within 10 calendar days, the National Bank has the right to reject registration.

After a positive resolution to grant a payment system provider license in Georgia, the regulator publishes the relevant information on its website within 2 working days.

Responsibilities of a PSP company in Georgia

In order to retain the payment system provider license in Georgia in the long-time perspective, the company must fulfill a number of requirements:

• the presence of a
  headquarters in the country;
• data on transactions should
  bestoredin such a way that they are available for submission to the
  National Bank at the first request;
• access to the internal
  database of the payment system to the regulator;
• a representative of aPSPcompany
  must be present in Georgia for at least 14 calendar days in a month.

Furthermore, it is necessary to ensure high reliability and confidentiality.For violation of therequirementsestablished by the regulator, sanctions are applied to the company, up to the cancellation of the license.

What are the advantages of a payment system provider license in Georgia?

It should be noted straightaway that the payment system provider license regulates the company’s activities on the territory of Georgia.Therefore, if a legal entity wants to enter the financial market of another country, it will first have to obtain a license from the local regulator.However, having a license in Georgia and reliable work experience can have a positive impact on the positive resolution.

In addition, theadvantages of a payment system provider license in Georgia are:

• an
  opportunity to operate in a developing market of payment services, where there
  is a stable growth of international transfers;
• Lack
  of burdensome or complicated requirements and a relatively small package of
  documents;
• registration
  speed – a license is issued in a maximum of 60 calendar days;
• no restrictions
  to have non-resident founders;
• the
  opportunity to obtain the status of an international financial company (5% of income
  tax, exemption on property tax, taxation of dividends, income tax on wages).

If you are interested in a payment system provider license in Georgia, contact us at [email protected] or by online chat, and we will provide you with expert advice on this matter.