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Fintech hub to expand as MICA takes effect

30 Apr 2024 / technology Print

Fintech hub to expand as MICA takes effect

Ireland’s advantages as a base for e-money institutions are explained in a McCann FitzGerald briefing note.

Some of the firms are home grown, and others are drawn to Ireland by its active and thriving fintech sector.

These include:

  • Strong regulatory framework with a credible and experienced regulator in the Central Bank,
  • Favourable passporting regime,
  • Favourable tax regime, with a standard 12.5% corporate tax on revenues less than €750 million annually, plus comprehensive double tax agreements, and
  • Access to a sophisticated financial services ecosystem of staff, managers, professional advisers, regulators and service providers including a sizeable international population.

Regulatory Framework

E-money is regulated under the European Communities (Electronic Money) Regulations 2011 which transpose the E-Money Directive 2009/110 into Irish law, without any significant additional national measures (gold-plating).

Once the Markets in Crypto-Assets Regulation (MiCA) becomes fully operational this year, with new rules for stablecoins, including e-money tokens, opportunities will expand, the lawyers write.

Applicants to become authorised as an e-money institution under Irish law must show that they will have substance in Ireland, have a viable business model, and be adequately capitalised.

The Central Bank wants applicants to show that their “heart and mind is in Ireland with for example:

  • Senior management team with strength and depth, overseen and directed by a strong board, and
  • Organisation structure and reporting lines which ensure there is appropriate separation and oversight of all activities.

Those running core functions should be permanently based here, the lawyers add.

Gazette Desk
Gazette.ie is the daily legal news site of the Law Society of Ireland