Payment Service Provider License - Czech Republic

About Czech Republic

In accordance with the European Union’s Payment Services Directive (PSD2), the Czech Republic recognises and regulates payment service providers (PSPs).

Payment service providers operating in the Czech Republic must obtain the necessary licences and adhere to regulatory regulations. The Czech National Bank is the primary supervisory institution in charge of overseeing payment service providers and guaranteeing regulatory compliance.

Credit transfers, direct debits, card payments, electronic money transfers, and payment initiation services are all available from PSPs in the Czech Republic. Individuals, corporations, and organisations can use these services to make and receive payments in an efficient and secure manner.

Czech Republic is located in Central Europe. Because of its physical location, it is a natural intersection of major transit corridors. The Czech Republic is a democratic country with a stable political and social environment as well as a functional legal system.

According to Worldometer’s elaboration of the most recent United Nations data, the Czech Republic’s current population is 10,765,897 as of May 18, 2023.

Czech is the Czech Republic’s official language. Czech, which has roughly 11 million native speakers, is classed as a Slavic Indo-European language. Although many individuals in the Czech Republic have a basic understanding of English, learning a few important words in Czech will get you far.

Czech legal culture (civil law) belongs to the Germanic branch of continental legal culture. Civil, criminal, administrative, procedural, and labour law are among the major areas of public and private law that have been methodically codified.

1. Trust and Legitimacy
A PSP licence increases the credibility and legitimacy of your payment services firm. It displays that you have met all regulatory requirements and adhere to industry standards, which can aid in the development of trust with customers and business partners.

2. Access to the European Market
The Czech Republic is a European Union (EU) member and a member of the European Economic Area (EEA). Having a PSP licence in the Czech Republic can help you gain access to the larger EU market by allowing you to offer payment services across EU nations via the passporting process.

3. Regulatory Compliance
Obtaining a PSP licence assures compliance with applicable legislation and directives, such as the Payment Services Directive (PSD2), which is now in effect in the Czech Republic. Compliance with these regulations protects consumers and assures transaction security, increasing trust in your services.

4. Expanded Service Offerings
With a PSP licence, you can provide your customers with a broader choice of payment services, such as credit transfers, direct debits, card payments, electronic money transfers, and payment initiation services. This allows you to address a wide range of consumer needs and potentially acquire a larger customer base.

5. Enhanced Customer Experience
With a PSP licence, you can offer your consumers secure, dependable, and regulated payment services. This can lead to a better customer experience, which is critical for increasing customer happiness, loyalty, and repeat business.

6. Competitive Advantage
Being a licenced PSP can provide you an advantage in the market. It indicates your dedication to compliance, security, and professionalism, which can set your company apart from unlicensed or unregulated competition.

7. Potential Partnerships
Possessing a PSP licence may allow you to collaborate and partner with banks, financial institutions, and other regulated companies. These collaborations can result in expanded commercial prospects, access to new resources, and the capacity to provide complementary financial services


License: Payment Service Provider
Timeframe for Approval: 3 to 4 months
Regulator: The Czech National Bank (CNB)

Company Structure

Local Director: At least 2 directors (can be only natural persons)
Local Shareholder: At least 1 shareholder (can be natural or legal persons, a legal person must be registered and be present in Czech Republic)
Local Registered Office: Required
Local Staff: Required
Compliance Officer: Required
AML/KYC: Required
Audit: Required
Economic Substance: Required
Corporate Tax Rate: 19%
Currency: Czech koruna (CZK)
Capital Requirements: Varies
Tax Structure: 0% Tax on Offshore Profits

Because licencing is the responsibility of the Czech National Bank (CNB), the paperwork must be presented to this institution. They are as follows:

  1. A three-year company plan that includes a financial plan. The company plan should be geared towards gaining clients in the EU.
  2. Documents revealing the sources of funding;
  3. Accounts information for the company, specifically
    a. The balance sheet
    b. Profit and loss statement
    c. Availability of funding to address payment system risks
  4. Methods of protecting clients’ funds are described.
  5. Corporate structure description;
  6. Description of technical processes, particularly how transfers will be carried out, and so on.
  7. Accounts information for the company, specifically 
  8. Privacy policy, which ensures that the payment system’s processing of personal data conforms with European legislation, including the GDPR;
  9. Information on the founders: in addition to the fundamental paperwork, it is required to establish the absence of any liability cases and to identify the source of funding for the share capital.
  10. Detailed information on the directors of the company.
  1. Credit Transfers
  2. Direct Debits
  3. Card Payments
  4. Electronic Money Transfers
  5. Payment Initiation Services
  6. Currency Exchange
  7. Payment Account Services
  8. Digital Wallet Services
  9. Merchant Services

Due Diligence on all directors/shareholders (holding 10% of shares and more):

  • Notarized copy of valid passport of each Director (2 sets)
  • Notarized copy of proof of address (ex. utility bill of each Director, 2 sets)
  • Certified Bank reference letter (of each Director)
  • Legal reference letter (of each Director and Shareholder)
  • CV (of each Director and Shareholder)
  • Notarized Criminal Records (of each Director and Shareholder)
  • Tax declaration (if the shareholder is a natural person)
  • Audited financial statements for 3-5 years (if the shareholder is a corporate entity)
  • Anti-Money laundering Policy
  • Business Plan

In case If a corporate entity is used as a Shareholder:

  • Passport of an Authorized Person for the body Corporate
  • Utility Bill as proof of residency of an Authorized Person for the body Corporate
  • Latest CV detailing Educational background and Working Experiences of an Authorized Person for the body Corporate
  • M&A to include the clause on the establishment of the Czech Republic Company or allowing to do so
  • Two Reference letters for the Authorized Person that are to be issued by a Professional such as a Lawyer, Accountants, Company Secretary or Bank of an Authorized Person for the body Corporate
  • Registries of Company listing down the names of Director, Shareholder, Auditor, Company Secretary
  • Certificate of Incorporation
  • Resolution by the Company to appoint the Authorized Person to act on behalf of the Company
  • Resolution of the Company to invest in the Czech Republic Company
  • Group corporate shareholding structure, including the applicant
  • Certified true copy of certificate of license granted by relevant authority(s) in its home country – (if applicable)
  • Certified true copy of board resolution or minutes of general meeting which approved the setting up of the applicant
  • Copies of 3-5 years audited financial statements
  • Detailed plan of activities, including:
    a. Sales plan for the next 3-5 years;
    b. Financial plan in conformity with the requirements of the Czech National Bank;
    c. Investment plan in conformity with the requirements of the Czech National Bank;
    d. Marketing plan in conformity with the requirements of the Czech National Bank;
  1. Incorporation of Czech Republic Corporation or comparable offshore corporation
  2. Arrange for local registered officer and local directors, if required
  3. Draft corporate bylaws, minutes and owner share issuances
  4. Establishment of corporate bank account suitable for forex operations
  5. Establishment of merchant service account for accepting credit and debit cards
  6. Draft requisite business plan, financial statements and financial projections
  7. Draft requisite Anti-Money Laundering & Know-Your-Customer policies
  8. Arrange for requisite surety bond
  9. Prepare and process application for Czech Republic Payment Service Provider License
  10. Representation before licensing regulatory authority, banks and liquidity providers