Payment service provider license in Georgia
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:
|Month, 2020||Transactions with electronic money, lari||Transactions excludinge-money, lari||Total,lari|
|January||8 965 119||460 057 485||469,022 604|
|February||6 162 245||475 676 130||481 838 375|
|March||8 702 971||460 085 812||468 788 783|
|April||4 084 564||296 186 824||300 271 388|
|May||4,969,861||357 901 815||362 871 676|
|June||8 792 882||429 203 625||437 996 507|
|41 677 641||2 479 111 692||2 520 789 333|
In total, 30 companies have a payment system provider license in Georgia as of August 17, 2020, all of them are registered in Tbilisi.
|Name||The form||Date ofregistration|
|3||Direct Debit Georgia||LTD||12.12.2012|
|7||Metro Service +||LTD||04.04.2013|
|9||“Mobile Finance Service-Georgia”||JSC||07.05.2013|
|10||United Clearing Center||JSC||June 17, 2013|
|11||“All Pay Way”||LTD||04.08.2015|
|17||“Smart Payment Systems”||LTD||02/07/2018|
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:
- Preparation of constituent documents (all documents must be in Georgian).
- 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).
- Opening a corporate account in a Georgian bank and formation of statutory capital.
- 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.
Does a payment system provider license in Georgia entitle the company to carry out activities at an international scale?
The payment system provider license provides the PSP-licensed company the right to operate on the territory of Georgia, issues regarding operations in other countries are regulated by the respective local regulators of those countries.
Who makes the decision to establish an international financial company in Georgia?
The decision to establish an international financial company is made only by the Government of Georgia.
Why Georgia’s payment system provider license?
A payment system provider license may be of interest to companies that are interested in having access to a relatively small market/country in order to gain experience and subsequently expand at an international scale. It should also be noted that the Georgian market is still young and developing, which means many opportunities abound.