Obtaining an SVF licence in Singapore

Introduction

General introduction to the SVF licence in Singapore

Acquiring a Stored Value Facility (SVF) authorization in Singapore is a crucial process for entities desiring to partake in electronic payments and fiscal amenities within the nation. This form of authorization is obligatory for undertakings associated with the evolution of remittance frameworks and the allotment of digital currency, enabling enterprises to oversee web-based accounts, simulated currencies, prepaid tickets, and execute web-based remittance transactions.

Singapore, as a leading financial centre, is committed to providing an efficient and secure financial environment, which is why organisations in the FinTech sector require an official licence. Firms with a Singapore SVF licence have the ability to handle cryptocurrencies and operate freely with e-money and payment instruments. This licence is comparable to the EMI licence in Europe, making it attractive for global financial transactions.

Henceforth, the procedure of acquiring an SVF permit in Singapore mandates comprehensive groundwork but also bestows noteworthy openings for enterprises operating in the electronic payments and fiscal amenities sector.

Comparison of SVF licence with EMI licence in Europe

Comparing the SVF licence in Singapore and the EMI licence in Europe provides insight into the key differences between the two types of licence, which are important for businesses operating in the finance and electronic payments industries.

Areas of application and types of SVF licence in Singapore

Available activities with SVF licence in Singapore

Owning an SVF licence in Singapore allows companies to undertake a variety of payment services initiatives, each with its own specific characteristics.

• Development of electronic wallets and issuance of non-bank payment cards

This activity enables companies to develop and manage electronic wallets. Such wallets allow users to electronically store, transfer and receive funds. They offer convenience as they allow financial transactions through mobile applications or online platforms. In addition, companies that have obtained an SVF licence in Singapore can issue prepaid payment cards. These cards serve as an alternative to traditional bank credit and debit cards, which is especially convenient for people without access to standard banking services or those who prefer alternative methods of managing their finances.

• Domestic money transfers

This service allows users to transfer money between accounts within Singapore. This can include transfers between accounts at different banks or between personal e-wallets. The purpose of such transfers is to simplify and speed up domestic financial transactions. This is especially important for businesses that can use this service to transfer funds between different partners or departments quickly and efficiently.

• Cross-border money transfers

After obtaining an SVF licence in Singapore, fintech organisations can provide cross-border money transfer services. This is especially important for international business ventures and for people transferring money to relatives or friends outside of Singapore. Such transfers require adherence to international financial transaction rules and standards. Companies can provide convenient and reliable ways to transfer money to different countries with minimal fees and delays.

• Accepting and processing payment transactions for merchants

This genre of enterprise encompasses remittance handling amenities for enterprises such as internet boutiques, physical stores, and other commercial ventures. Enterprises may furnish the capability to receive remittance from patrons through a myriad of electronic methods, comprising e-wallets, bank cards, and other remittance modalities. This enables enterprises to streamline the remittance procedure for their patrons and enhance the efficacy of their fiscal undertakings.

• Conducting e-money business in Singapore

Holders of a Depository Value Facility (DVF) license in Singapore have the authority to engage in the issuance and distribution of digital currency, which is utilized for a variety of purposes, including internet-based purchasing and financial transfers. Digital currency comprises virtual assets stored in electronic purses that are used to conduct online payments, settle accounts, and carry out other financial dealings. This provides users with convenience and safety, with businesses being required to comply with rigorous regulations to ensure the safeguarding and security of customer information.

• Digital payment token trading

This genre of enterprise entails handling cryptocurrencies and other virtual holdings. Enterprises might provide amenities to procure and vend virtual remittance tokens like Bitcoin, Ethereum, and other cryptocurrencies, enabling users to invest in virtual holdings and partake in the evolution of the cryptocurrency marketplace. To carry out such transactions, enterprises must adhere to pertinent regulatory directives to safeguard their security and authenticity.

• Foreign currency exchange

SVF licence holders are also permitted to furnish currency conversion amenities in Singapore. This is notably pertinent for tourists and business voyagers who necessitate converting foreign currency to domestic currency and vice versa. Such enterprises can extend competitive conversion rates and dependable conversion amenities for patrons who aim to execute foreign currency transactions.

All these varieties of remittance amenities accessible to SVF-licensed enterprises in Singapore aid fortify the nation's fiscal framework, expedite fiscal transactions for inhabitants, and buttress the commercial milieu.

Types of SVF licence in Singapore

The Singapore Stored Value Facility licence allows companies to engage in a variety of financial transactions. There are several types of SVF licences, each of which provides certain rights and obligations to the holder.

Consequently, Stored Value Facility licensing in Singapore unveils numerous opportunities for firms in the fiscal amenities industry. Nevertheless, contingent upon the authorization chosen and the pertinent thresholds, particular categories of transactions and activities may be curtailed, thus aiding in regulating Singapore's fiscal sector and ensuring the safety and stability of the fiscal amenities provided.

Requirements for obtaining an SVF licence

Prescriptive prerequisites and stipulations

Applying for an SVF licence in Singapore is a key and complex process that requires compliance with the regulations and standards set by MAS. The process involves several important steps and criteria that applicants must fulfil.

1. Determining the right type of SVF licence
   • Choosing the right SVF licence type is critical in the first step of the licensing process in Singapore. Depending on the nature of your business, you will need to select one of several available SVF licence types appropriate for your business.
2. Qualifications for corporate administrators
   • The administrator must be a citizen of Singapore or a permanent dweller. This individual will play a pivotal role in overseeing your corporation and liaising with regulatory agencies.
3. Premises for operations in the jurisdiction
   • For licensure, you must possess a registered domicile or perpetual business location in Singapore, demonstrating your presence in the nation.
4. Reporting to MAS
   • Obligated to furnish routine reports to MAS, encompassing financial details, transaction capacities, and e-money.
5. KYC and AML/CTF strategies
   • It is imperative to establish and adhere to Know Your Customer and Anti-Money Laundering/Criminal Organization Financing strategies to thwart illicit fiscal endeavors.
6. Designation of an AML/CTF Conformance Officer
   • It is advisable to nominate an AML/CTF conformance officer who will be autonomous from the executive team.
7. Capital prerequisites
   • The certified capital indispensable to procure a permit hinges on the genre of permit, with SPI necessitating S$100,000 and MPI mandating S$250,000.
8. Compulsory surety deposit
   • In certain instances, a surety deposit may be necessitated, contingent upon the nature and hazards of the enterprise.

The process of obtaining an SVF licence in Singapore is complex but offers great prospects in the financial sector. Successfully obtaining a licence and operating successfully requires strict adherence to regulatory standards and safeguarding the security of financial transactions.

Documentation

To successfully apply for a Stored Value Facility licence in Singapore, companies need to submit a set of documents describing their business operations and meeting all required standards and regulatory guidelines.

• State Registrar of Companies extract: this document confirms the legal registration and operation of the company in Singapore, which is a prerequisite for obtaining an SVF licence and demonstrates the legal legitimacy of the business.
• Company financial statements: this includes both audited and unaudited financial statements. Companies with a history of financial activity require audited reports, while new companies may require unaudited financial data.
• Management structure and biographies of key personnel: information on the organisational structure of the company should be provided, including a description of the roles and responsibilities of key managers and employees. Resumes of these individuals should include their experience and qualifications.
• Business plan and financial projections: A detailed business plan should describe the company's future operations, including development strategies and plans for financial operations. Financial projections should provide estimates of future financial performance, including revenues, expenses, and profits.
• Documentation of internal policies: include policies on risk management, compliance, anti-money laundering and counter-terrorist financing, and data protection. These policies should be carefully drafted and documented to comply with Singapore law.

Given that document requirements may vary depending on the type of SVF licence and the specifics of the company's activities, it is strongly recommended to obtain professional advice to fully comply with all requirements and speed up the process of obtaining a licence.

Steps to apply for a licence

The application process to open an SVF licence in Singapore involves several key steps:

Step 1: Submitting the application to MAS

Once all documents have been prepared, the application for a payment licence in Singapore is submitted to MAS. It is important to ensure that all documents and information are submitted completely and accurately to avoid delays in the review process.

Step 2: Waiting for MAS's decision

Once the application is submitted, MAS conducts a thorough review of the information and documents provided. During this period, additional information or clarifications may be required from the applicant.

Step 3: Obtaining a licence

Upon successful review of the application and satisfaction of all MAS regulations, you will be issued an official licence, allowing you to legally start your e-payment business in Singapore.

Available types of legal entities to open an SVF licence in Singapore

These types of legal entities offer different levels of responsibility, flexibility in management and access to financial resources. Choosing the right type of legal entity depends on your company's specific needs and objectives in obtaining an SVF licence in Singapore.

Tax incentives for companies with SVF licence in Singapore

Opening a financial institution in Singapore and obtaining an SVF licence provides significant tax advantages and benefits, making this jurisdiction attractive for payment services businesses.

• Tax advantages: Adequately organized firms with an SVF authorization in Singapore may be excused from corporate revenue levy, retention levy, and GST (Goods and Services Tariff). This creates a favourable environment for efficient tax planning and increased net profit for the business.
• Attractive tax rate: Singapore offers one of the lowest corporate tax rates in the region at 17 per cent. Moreover, the actual tax rates can be even lower due to the various tax incentives and deductions available.
• Single-tier tax system: this system, in place since 2003, eliminates double taxation. This means that once all taxes and levies have been paid, the company is exempt from additional tax liabilities and thus dividends paid to shareholders are not subject to additional tax.
• Tax incentives to encourage business: from 2020, Singapore has new tax rules that make taxation even more favourable for companies. For example, there is a tax exemption of 75 per cent for the first SGD 100,000 of income over three years.

These tax advantages, along with transparent and effective regulation, make Singapore one of the most attractive places to open and run a financial institution, especially for those involved in providing payment services.

Conclusion

To wrap up our examination of the procedure for securing and managing a Stored Value Facility permit in Singapore, it's essential to highlight that this permit presents a significant chance for enterprises desiring to participate in electronic payments and fiscal amenities in this pivotal and swiftly evolving fiscal nucleus. The process of petitioning for an SVF permit in Singapore necessitates meticulous strategizing and groundwork, along with fulfilling the requisites mandated by MAS.

It is important to stress that doing business with an SVF licence in Singapore requires not only initial licensing, but also ongoing adherence to high operational standards, including transparency, protection of customer data and compliance with AML/CFT policies. This ensures trust and security for both clients and the Singapore financial system itself.

A Singapore SVF licence is therefore a valuable asset for any company looking to grow its business in the financial technology and electronic payments industry, subject to strict compliance with all regulatory requirements and standards.

Our experts are prepared to furnish exhaustive assistance and elaborate counsel at each juncture of the progression of acquiring an SVF permit in Singapore. We will equip you with the requisite intelligence and adept backing to streamline and hasten the licensure process. To make contact with our squad, kindly opt for the most expedient manner enumerated in the Reach Us division of our website. We also extend supplementary amenities, such as aid in compiling documentation and guidance on statutory conformity.