PSP license in Latvia

Published:
April 7, 2023
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Obtaining a PSP (Payment Service Provider) permission in Latvia can be a complex and time-consuming process, but it is necessary if you want to offer payment services to customers in country and the European Union. Latvia is becoming an increasingly popular destination for PSP permission applications due to its favorable adjustment environment and modern infrastructure.

Requirements for payment service providers

Here are some of the basic requirements you must meet:

  • Company enrollment: Before you can apply for a PSP permission, you will need to register payment service provider in Latvia. This involves obtaining a registration number, opening a bank account and obtaining any necessary permits.
  • Authorized capital: The size of the authorized fund depends on the type of authorization. The minimum amount is 20,000 euros.
  • A business plan. You will need to provide a detailed business plan outlining your proposed operations, target market and monetary projections.
  • The organizational structure. You will need to provide details of your company’s organizational structure, including information on all shareholders, directors and senior administration.
  • Due Diligence: You will need to provide due diligence reports on all directors, officers and beneficial owners of the company and any persons who control the company.
  • Compliance Guidance: You will need to provide detailed guidance describing how your company will comply with relevant laws and regulations.
  • Insurance policy: You will need to supply proof of professional indemnity, directors and officers liability insurance and any other relevant insurance policies.
  • Operational and procedural manuals: You will need to provide detailed operational and procedural manuals that describe how your business will operate and how it will manage risks.
  • Business Continuity Plan: You will need to supply a detailed plan outlining how your biz will continue to operate in the event of an unexpected disruption.
  • Audited financial statements: If your business-company has been in biz for more than one year, you will need to supply audited financial statements for the previous three years.

Benefits of acquiring a permission

Acquiring a PSP license in Latvia can be a profitable option for monetary companies controlling in the field of electronic remittance and e-money circulation. Here are some benefits to consider:

  • European standard: The Latvian PSP license gives the company the opportunity to work within the framework of the European standard, which helps to increase the trust of customers and allows to receive customers from different countries of Europe.
  • Low taxes: Latvia offers low income taxes, which provides a more favorable business environment compared to many other European countries.
  • Fast period of acquiring: Comparable to other states, the process of acquiring a PSP license in country is quite fast and efficient.
  • Developed monetary infrastructure: Latvia has a well-developed financial infrastructure that enables fast and efficient transaction processing and ensures a high level of payment security.

Fintech industry

One of the success factors of the fintech industry in Latvia is a business-friendly legislative framework that makes it possible to work legally in this area. In addition, the government supports the development of this industry and tries to attract foreign investment for its further development.

Various areas of fintech industry are developed in Latvia, including:

  • Electronic payments and e-money. Latvia is a member of the EU and the Eurozone, which provides easy access to European remittance systems. In addition, country has a favorable legislative framework for e-payments and e-money.
  • Crowdfunding and crowdlending platforms. In Latvia, there are crowdfunding and crowdlending platforms that allow you to raise money for the plantation of various projects and invest in real estate.
  • Cryptocurrencies. Latvia is one of the countries where the sphere of cryptocurrencies is regulated rather progressively.

Documents that need to prepare

To obtain a PSP license in Latvia, it is necessary to collect papers that will ensure the applicant’s compliance with the requirements of the law.

The main papers that must be submitted when applying for a PSP license in Latvia:

  • Applicant questionnaire – detailed info about the applicant and the company’s activities.
  • A business plan is a document that describes a business model, a growth strategy, a forecast of income and expenses, a marketing strategy, and other important aspects of activity.
  • Documents confirming the legal status of the firm – charter, enrollment number and other registration documents.
  • Legal papers confirming the company’s financial condition – financial reports, accounting reports and other documents indicating the stability of the company’s finances.
  • Documents confirming the experience and qualifications of the company’s management and specialists – resumes, certificates and other documents.
  • ents confirming the absence of connections with criminal structures and terrorist organizations.
  • Documents confirming the availability of equipment and software necessary for the provision of monetary favors.
  • Papers confirming the existence of an effective financial risk control system, including an Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) system.

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