The Netherlands has built a reputation for itself as an innovative, progressive jurisdiction when it comes to the payments and fintech sectors. Recently, the country has become more popular among payment services providers and fintech companies due to its high pace of licenses granted and its ever-increasing innovative approach in regards to these industries. 

Among the advantages of this jurisdiction the following should be noted:

1. Generally a very good level of English;
2. Favorable business mentality and work ethics;
3. High quality workforce;
4. A friendly regulatory environment towards fintech, innovative financial institutions and crypto companies;
5. A vibrant local business community in the fintech and payments sector;
6. Good reputation and ranking among banks.

To date, there are 9 active EMIs in the Netherlands and 74 active Payment Institutions in the country. They are overseen by the DNB (De Nederlandsche Bank). In 2021, the DNB was the most active regulator in the EU in terms of EMI and PI licenses that were issued (14). 

The DNB and the AFM (the financial markets regulator) have also established an innovation hub designed for innovative financial services providers, where these can obtain relatively quickly answers to regulatory questions including: explanation of specific supervision rules and policies; information on potential supervision issues that might come up if they are developing an innovative product or service; information on tailored supervision of innovative financial products and services and information on competition rules. 

As a side note, the reason for the massive popularity of the PI license in the Netherlands is the wide interpretation the DNB chose to give the PSD when it comes to PI’s ability to store funds. In the Netherlands, a PI can allow its customers to store and manage their funds with a freedom level which would be sufficient for the average client (whereas in most other EU jurisdictions the client cannot store funds in a PI). If chosen over an EMI license, a PI license would require a lesser amount of capital (125,000 EUR), however other requirements are quite similar. 

The current corporate tax rate in the Netherlands is quite high at 25%. 

Regulatory Requirements

1. A robust, viable business plan and financial resilience. 
2. Local presence – the DNB is one of the friendliest regulators when it comes to international teams. It requires no more than the two local directors which are anyway required by the EMD. The rest of the team members can be international. The backgrounds and competence of the board members, executives and team members will be reviewed. As in all other EU states, the directors would have to pass the “fit and proper” assessment.
3. Required capital – the usual 350,000 EUR is required to be deposited at the beginning of the application process. 
4. Risks management – IT risks, safeguarding, and operational resilience.
5. AML risks management – the DNB is one of the strictest regulators with respect to the prevention of money laundering. Therefore a robust, thorough AML program and procedures, as well as competent personnel, should be put in place.

Estimated Timeframe for License Application Review

Usually, according to our experience, the EMI license application process in the Netherlands takes around 6-9 months from start to end which is a favorable time frame compared to other EU states. 

Interested in obtaining an EMI license in the Netherlands?

If you are interested in obtaining an EMI license in the Netherlands, Porat Group is well positioned to assist you with the entire licensing process as we not only have an office in the Netherlands, but also experience with issuance of these licenses, as well as providing legal and regulatory services after the license is issued and the business is operating.

Porat Group’s legal team also adds value in terms of:

• Assistance with hiring management and staff, if needed;
• Finding and connecting to technologies and platforms needed, if needed;
• Assistance with opening accounts in acquiring banks (which are necessary for these companies to operate);
• Acting as a potential partner when it comes to bringing clients/merchants.

Contact us for more information and in order to get the process started.