Overview of Austrian EMI Licensing
Austria operates under the European Union's harmonized regulatory framework for electronic money institutions, with the Austrian Financial Market Authority (Finanzmarktaufsicht - FMA) serving as the primary regulatory body. As an EU member state and eurozone participant, Austrian EMI authorization provides access to the broader European market through passporting arrangements.
The Austrian regulatory approach distinguishes between hardware-based electronic money products (such as digital wallets on physical devices) and software-based products (electronic cash applications), applying appropriate oversight to each category.
Regulatory Framework
Austrian EMI regulation derives from European harmonization requirements:
EU Directive 2009/110/EC: The Electronic Money Directive, implemented in Austrian law, establishes authorization and operational standards for electronic money institutions.
Payment Services Directive 2 (PSD2): Directive 2015/2366 governs payment services, including strong customer authentication requirements.
Austrian Payment Services Act (Zahlungsdienstegesetz - ZaDiG): The primary domestic legislation implementing EU payment and e-money directives.
Financial Market Anti-Money Laundering Act (FM-GwG): Implements EU AML directives, establishing customer due diligence and suspicious activity reporting obligations.
Capital Requirements
Austrian EMI capital requirements align with EU standards:
Initial Capital
Applicants must contribute authorized capital meeting prescribed minimums. For electronic money institutions, the standard EU requirement of €350,000 applies, though specific requirements may vary based on the scope of proposed activities.
Capital Contribution
Austrian regulations may permit phased capital contribution, with initial payment equal to half the total required amount at establishment, and the remainder contributed according to prescribed schedules.
Ongoing Capital
Licensed EMIs must maintain own funds calculated according to prescribed methods based on outstanding electronic money and payment transaction volumes.
Corporate Requirements
Shareholder Structure
- •Minimum one shareholder required
- •Shareholders may be natural persons or legal entities
- •Source of funds verification for significant shareholders
Documentation Requirements
Applicants must submit apostilled documentation including:
- •Shareholder decisions and resolutions
- •Memorandum of association
- •Board conclusions and protocols
- •Share certificates
- •Proof of capital contribution
Ongoing Obligations
- •Annual financial report filing
- •Tax compliance and payments
- •Regulatory reporting to FMA
EU Market Access
Austrian EMI licenses provide passporting rights throughout the European Economic Area:
Passporting Process
Once authorized in Austria, licensed institutions may provide services in other EU/EEA member states through:
- •Freedom of services (cross-border provision without local establishment)
- •Freedom of establishment (branches or agents in other member states)
Notification Requirements
Entering specific EU country markets requires notification procedures to the relevant host state regulators, coordinated through the FMA.
Services Under Austrian EMI Authorization
Licensed institutions may provide:
Electronic Money Services
- •Issuance of electronic money against receipt of funds
- •Redemption at par value
- •Distribution through authorized channels
Payment Services
- •Operation of payment accounts
- •Payment transaction execution
- •Card issuance and processing
- •Money remittance services
- •Payment initiation services (with appropriate authorization)
Authorization Process
Pre-Application Phase
- •Business model development
- •Corporate establishment in Austria
- •Capital arrangement
- •Compliance framework development
Application Submission
- •Complete documentation package to FMA
- •Application fee payment
- •Formal acknowledgment
Regulatory Review
FMA evaluates:
- •Business plan viability
- •Capital adequacy
- •Management fitness and propriety
- •Governance and compliance frameworks
- •Operational readiness
Decision
- •Authorization granted (with or without conditions)
- •Or refusal with stated reasons
Post-Authorization
- •Implementation of operational systems
- •Banking relationship establishment
- •Connection to payment infrastructure
- •Supervised commencement of activities
Documentation Requirements
EMI applications require comprehensive documentation:
Corporate Documents
- •Certificate of incorporation
- •Articles of association
- •Shareholder structure and beneficial ownership
- •Board composition and governance arrangements
Business Planning
- •Detailed business plan
- •Financial projections
- •Description of proposed services
- •Risk assessment
Compliance Documentation
- •AML/CFT policies and procedures
- •Risk management framework
- •Internal control mechanisms
- •IT security policies
- •Business continuity plans
Personnel Documentation
- •Management CVs and qualifications
- •Fit and proper declarations
- •Organizational structure
Advantages of Austrian EMI Licensing
EU Market Access
Austrian authorization enables passporting throughout the European Economic Area, providing access to over 450 million consumers.
Eurozone Membership
As a eurozone member, Austria offers seamless euro-denominated operations and SEPA participation.
Regulatory Framework
The FMA provides clear, predictable regulatory oversight aligned with EU standards.
Business Environment
- •Central European location
- •Strong financial services infrastructure
- •Skilled workforce
- •German-language market access
Ongoing Compliance Obligations
Licensed Austrian EMIs must maintain:
Prudential Requirements
- •Capital adequacy at prescribed levels
- •Customer fund safeguarding
- •Liquidity management
Regulatory Reporting
- •Periodic financial returns to FMA
- •Annual audited accounts
- •Notification of material changes
AML/CFT Compliance
- •Customer due diligence
- •Transaction monitoring
- •Suspicious activity reporting
Conduct Standards
- •Fair customer treatment
- •Transparent pricing
- •Complaint handling procedures
Practical Considerations
Professional Support
Most applicants engage:
- •Austrian legal counsel familiar with FMA requirements
- •Compliance specialists for policy development
- •Local accounting and audit support
Language
German language proficiency required for regulatory interactions and official documentation, though English may be accepted for certain submissions.
Timeline
FMA processing times vary based on application quality and complexity. Well-prepared applications typically progress more efficiently.
Conclusion
Austrian EMI licensing provides access to the European electronic money market through a well-established regulatory framework. The FMA's clear supervisory approach offers operational certainty for licensed institutions.
Success requires thorough preparation, including comprehensive documentation, qualified management, and robust compliance frameworks. Companies should engage appropriate Austrian professional support and ensure genuine operational substance within Austria.