The Singapore Stored Value Facility Company (Singapore SVF) in 2021
Since 2003, Healy Consultants Group PLC has assisted our multi-national Clients with registering the optimal vehicle for financial services companies across the globe. The Stored Value Facility (SVF) LLC is an attractive option for e-wallet and e-payment card services:
What are the advantages of registering a Singapore company to offer SVF services?
- If properly structured, Singaporean SVF companies can be legally exempt from i) Singaporean corporate income tax ii) withholding tax and GST and iii) Singaporean regulatory licenses;
- Using an SVF scheme is a solution to safely and quickly start issuing electronic money in Singapore;
- It takes less than one week to register a Singapore SVF company.
New regulatory license requirements
- SVFs incorporated or starting business after 28 January 2020 are now legally required to secure a payment services license with the Monetary Authority of Singapore (MAS). Entities operating storage value facilities through Singapore-registered companies incorporated and commencing business before this date must also obtain a license, though exemptions exist and a transition period has been put in place. Healy Consultants Group PLC will assist our multi-national Clients’ secure regulatory license exemptions;
- On 28 January 2020, a new licensing regime came into force requiring payment service providers, including SVFs, operating in Singapore to obtain licences. The Payment Services Act aims to streamline payment services, expand the scope of regulated payment services, and address i) money laundering and terrorism financing concerns ii) loss of funds owed to consumers or merchants due to insolvency iii) fragmentation and limitations to interoperability; and iv) technology and cyber risks.
- Any Singapore company registered after 28 January 2020 to carry out the following payment services, including SVF activities, must be licensed:
- Account issuance – for example, an e-wallet or non-bank issued credit card;
- Domestic money transfer – for example, fund transfer services in Singapore such as payment kiosks or payment gateway services;
- Cross border money transfer – inbound/outbound fund transfer remittance services in Singapore;
- Merchant acquisition – where a service provider accepts and processes payment transactions for a merchant. For example, operation of online payment gateways, or the provision of point-of-sale terminals;
- E-money issuance in Singapore – enabling users to pay merchants or transfer e-money to other individuals (e g money stored in e-wallets);
- Digital payment token – buying/selling digital payment tokens (for example, cryptocurrencies), or services which provide a platform which facilitates the exchange of such digital payment tokens in Singapore;
- Money-changing – buying/selling of foreign currency notes in Singapore. For example, money-changers which profit from the exchange of physical currency notes.
- After 28 January 2020, three payment services licences are available:
- Money-Changing Licence – licence holders can only conduct money-changing services. Licensees must: i) have a permanent place of business or ii) registered office in Singapore;
- Standard Payment Institution Licence – licence holders can conduct any combination of the seven regulated activities indicated, but below specified thresholds. These thresholds are i) accepting, processing, or executing a monthly average of payment transactions of up to S$3 million for any activity, or up to S$6 million for two or more activities, in a calendar year ii) e-money account issuance providers must apply for this licence if they issue an average daily e-money float of up to $5 million in a calendar year;
- Major Payment Institution Licence – licence holders can conduct any combination of the seven regulated activities indicated above specified thresholds. These are: i) the average total value of all payment transactions by the business in one month exceed specified thresholds of S$3 million for one payment service, or S$6 million for two or more payment services, in a calendar year ii) e-money account issuance providers which exceed an average daily e-money float of up to S$5 million over a calendar year.
- To establish an SVF business in Singapore, the MAS require multi-national Clients to satisfy the following regulatory requirements:
- Secure a payment services licence – this will usually be either i) Standard Payment Institution Licence or for larger SVFs ii) a Major Payment Institution Licence;
- Engage a Singapore executive director – companies operating under Standard Payment Institution Licence and Major Payment Institution Licence require at least one executive resident director (Singapore citizen/Singapore Permanent Resident). Healy Consultants Group PLC can act as the nominee professional, passive resident director (click link);
- Have a permanent business presence in Singapore – Healy Consultants Group PLC registered office in Singapore will suffice. The licensee must also appoint at least one person to be present, at a time specified by MAS, at the premises. The licensee must also keep books of all transactions in relation to the service. Healy Consultants Group PLC Singapore office will provide this professional service;
- Conduct monthly/annual MAS reporting – Standard Payment Institutions and Major Payment Institutions must submit account statistics, transaction value and volume, and e-money float amounts to MAS monthly. Money Changers must submit details annually. Healy Consultants Group PLC’s in-house Accounting and Tax Department will timely, accurately and completely discharge monthly and annual Government reporting;
- Know Your Customer due diligence procedures – All licensees providing payment services which carry money laundering/terror financing risks must comply with specific MAS risk mitigating measures. Healy Consultants Group PLC Singapore Legal and Compliance Department will assist here;
- Anti-Money Laundering (AML) / Countering Financing of Terrorism (CFT) policies and procedures – MAS AML/CFT requirements are calibrated according to the degree of risks posed by each payment service. Measures imposed under the PS Act are similar to previous AML/CFT requirements on entities regulated under PS(O)A and MCRBA. These include requirements to conduct customer due diligence, monitor transactions, perform screening, report suspicious transactions and keep FAQs on the Payment Services Act 4 October 2019 16 adequate records. See this webpage for more information about risk criteria;
- AML/CFT compliance officer – in accordance with the new AML/CFT obligations, SVFs are strongly recommended to appoint an AML/CFT compliance officer, who should be independent from Management. The regulations however do not require such an officer to be based in Singapore, although the appointment of a resident will be viewed favourably by MAS;
- Adequate paid-up share capital – where the applicant applies for a Standard Payment Institution licence, a Singapore-incorporated company requires a minimum base capital of S$100,000. For a Major Payment Institution, the minimum base capital is S$250,000;
- Security deposit – companies applying for a Major Payment Institution licence must make a deposit of S$100,000 if, during a calendar year, the value of all payment transactions that are accepted, processed or executed by the licensee in one month is S$6 million maximum for any one payment service it provides. The deposit is S$200,000 in all other cases. Standard Payment Institution Licence holders are exempt from the security deposit requirement.
- Click here to see how we can help our multi-national Clients with the above formalities.
Regulatory license exemptions enjoyed by our multi-national Clients
- Healy Consultants Group PLC will assist our Clients secure regulatory license exemptions. For example, if required, we will aggressively negotiate with MAS to secure an exemption for your business for a one-time fee of US$4,680;
- To ensure a smooth transition into the new licensing regime after 28 January 2020, the Payment Services Act 2019 makes provision for the following:
- Existing SVF or remittance providers licenced under the previous payment services regulatory regimes (Payment Systems (Oversight) Act (PS(O)A) and Money-Changing and Remittance Businesses Act (MCRBA), have six months from 28 January 2020 to inform the MAS in writing of the specific payment services being conducted. The existing licence is valid in this case;
- Money-changing licence holders under the MCRBA will be automatically considered to hold a Money Changing Licence;
- Holders of any other licence will be automatically considered to hold a Major Payment Institution Licence under the new law;
- Service providers which did not require licences under the previous regulatory framework, but which now require a licence, have a six-month grace period from 28 January 2020 to submit a licence application. Services can be provided during this period.
- Businesses which cannot enjoy the above exemptions, but which commenced business before 28 January 2020, can still request up to one year of extension to secure the license. Our fee to apply for the same with MAS amounts to US$850;
- For the following business activities, our multi-national Clients’ will enjoy regulatory license exemption:
- E-money for limited purpose (e g some pre-paid cards, purchase of limited goods and/or services, loyalty programmes);
- Virtual currency (e g in-game assets or non-monetary consumer loyalty points);
- Payment services conducted by licensed or exempt entities regulated under the Securities and Futures Act and the Financial Advisers Act. This is as long as such payment services are incidental to or necessary for the conducting of the regulated activities permitted under those legislations.
How we can help our multi-national ClientsFor multi-national Clients who cannot enjoy regulatory license exemptions, Healy Consultants Group PLC will assist our Clients’ as follows:
Regulatory requirement Simple, practical low- cost solution Fee Other relevant considerations Secure payment services licence Engage Healy Consultants Group PLC to secure same US$8,950 Requirements 1-3 must be met before licensing application is submitted Resident director Engage Healy Consultants Group PLC to hire resident director US$3,450 Client to thereafter pay monthly salary or directorship fee to their preferred director Singapore permanent business presence Engage Healy Consultants Group PLC to secure same US$1,100 / year Singapore registered office will suffice Monthly/annual MAS reporting The above director to complete monthly/annual filings - Alternatively, Healy Consultants Group PLC to assist your Firm with the same for a fee of US$660 per filing Know Your Customer due diligence procedures Engage Healy Consultants to ensure Client passes MAS Fit and Proper persons test - AML/CFT policies and procedures Healy Consultants Group PLC to supply you an AML/CFT program US$1,750 AML/CFT officer Engage Healy Consultants Group PLC to hire AML/CFT officer US$3,450 Client to thereafter pay a monthly salary/ fee to preferred AML/CFT officer Adequate paid-up share capital Inject SG$100,000 to a Singapore or international corporate bank account;
Then engage Healy Consultants Group PLC to update ACTA records
US$550 If required, Healy Consultants Group PLC to secure corporate bank account numbers for an additional fee of US$5,950;
Refer to this web page to understand our guaranteed corporate bank account solutions, or your money back.
Security deposit exemption Engage Healy Consultants Group PLC to negotiate a waiver with MAS US$1,000
Our SVF fees
- Our standard package of services includes the following: i) company registration services ii) company secretary and registered address services iii) nominee services for one professional passive resident director and iv) assistance to confirm with MAS whether the company is legally exempt from the regulation of Stored Value Facilities as well as other licensing and registration obligations in Singapore;
- Additionally, our Firm can also offer multiple additional Singapore company formation support services, including: i) virtual office services ii) assistance to recruit employees iii) accounting and bookkeeping services and iv) merchant account opening services.
Singapore’s payment services Standard cost Draft invoice Singapore offshore SVF company US$18,690 View invoice PDF Singapore resident SVF company with license US$34,115 View invoice PDF Licensing services only Invoice US$20,600 View invoice PDF
Other legal and compliance considerations
- Foreigners who are not living in Singapore are not legally allowed to offer prepaid (stored valued) cards or vouchers to Singapore residents or to market their services to customers in the city-state;
- SVF businesses managed from outside of Singapore may be subject to additional regulations in the countries where the directors live and / or where the business customers are based. We strongly recommend our Clients to inform themselves about the same;
- Prepaid (stored value) cards are not equivalent to credit cards, debit cards and ATM cards, and should not be marketed as such;
- Unlike banks and other financial institutions, customers of an SVF will never benefit from a Government guarantee, if the stored value card providers go under and they lose their stored e-money. However, widely accepted SVFs (WASVF) / multipurpose stored value facility (MPSVF) in Singapore usually appoint a bank to guarantee the total outstanding stored value.
- E-money issuance services providers are prohibited from lending money to customers, using customer money or any interest earned on customer money, to finance any activity of any business carried on by the licensee; or offering cash withdrawals in Singapore dollars from payment accounts storing e-money held by Singapore residents.
What are stored value facilities?Stored value facilities (SVFs) are all types of prepaid cards and vouchers which allow their users to hold e-money and make payments up to the amount of the stored value. Until January 2020, Singapore regulations differentiated between two types of SVF:
- Single-purpose SVF, which can only be used to make payments or collect cash with the business which issued the card/voucher. For instance, a prepaid top-up card;
- Multi-purpose SVF, which allows customers to use the card/voucher with other businesses not necessarily related to the business of the issuer. For example, Singapore public transport cards, which can also be used to make payments in selected shops.
- Prepaid (stored value) cards have been in use for a long time. In Singapore, most famous examples include i) EZ-link card (used for public transportation) ii) NETS cash card (for debit payments) iii) Capita Voucher iv) XFERS wallet and v) NETS Flash Pay. Given their wide use, these SVFs are tightly regulated by the Monetary Authority of Singapore (MAS) as “widely accepted (WA) SVFs”;
- However, plenty of other businesses offer SVF services, which were not subject to licensing requirements until 2020 provided their daily float value remained below SG$30 million (US$20 million).
ConclusionHealy Consultants Group PLC is the best in the world at SVF business set up in every country on the planet. Let us know if you require Healy Consultants Group PLC’s assistance to benefit from Singapore’s payment services to achieve your desired business goals.
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