An electronic money institution (EMI) or a payment service provider (PSP) is a company that is licensed for fintech activities. To set up an EMI or PSP company in Spain, founders follow the rules for company incorporation along with the regulations for e-money, digital wallets, and other types of services. Our team who can help with company formation in Spain can also assist those who open an EMI or a PSP company in Spain.
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How to open an EMI or PSP company in Spain
Investors who set up an EMI or PSP company in Spain follow the same general incorporation steps that also apply for companies in other industries.
Below, our team, who can help you with company incorporation in Spain, lists the main steps:
- choosing a type of legal entity (the private limited company, most often);
- preparing the incorporation documents (Articles of Association and others);
- making the submission for company registration (with the Business Registry);
- obtaining the mandatory licenses for functioning (according to the specific activity).
Companies, regardless of their activity, will be subject to the following taxes after incorporation:
- 25% general corporate income tax;
- 19% dividend withholding tax, unless reduced by a double tax treaty (can be 24% when paid to non-residents);
- 21% standard value-added tax.
Types of activities undertaken by an EMI company in Spain
Electronic money institutions and the payment service providers are part of the fintech industry, and they are regulated legal entities that offer specific services. Investors who open a company in Spain that will activate in the fintech sector can choose one of these two categories of services, among others.
Investors who set up an EMI company in Spain typically offer the following types of services:
- sending, receiving, or storing currency;
- payment processing solutions;
- foreign exchange services;
- prepaid or debit cards.
An electronic money institution in Spain does not issue credit, nor is it licensed to provide investment advice. At the same time, they do not engage in other bank-specific activities, such as offering deposit insurance.
Types of activities undertaken by a PSP company in Spain
Entrepreneurs who set up a PSP company in Spain provide the following solutions to their clients:
- accepting payments from clients;
- making sure that the transaction is duly routed;
- providing the infrastructure to ensure quick and efficient payments;
- implementing adequate security protocols to allow for secure payments between parties.
A payment service provider in Spain is not the same as a payment gateway. The latter is used only to transfer the payment data between the business and the PSP.
Licenses for the EMI/ PSP company in Spain
The decision to set up an EMI or PSP company in Spain will depend on the specific set of activities the new company will engage in. As seen above, the two types of activities are not the same.
Licensing is a key process for those who open an EMI company in Spain, as it is for those who set up a PSP company in Spain. The Bank of Spain is the main authority that handles licensing for EMI and PSP activities in the country.
If you want to set up an EMI company in Spain, our team can help you with more information about the regulations, including the EU Payment Services Directive and others.
Investors who set up a PSP company in Spain must comply with the general incorporation rules as well as the ongoing requirements. To fully understand the reporting conditions for fintech companies, we suggest discussing with our accountants in Spain.
Contact us if you want to know more about how to open a company in Spain that offers different types of services, including electronic money and payment processing solutions.