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Obtaining a Banking/Financial Services License in Croatia: A Time-Consuming Process
Zagreb, Croatia - For those looking to obtain a banking or financial services license in Croatia, be prepared for a lengthy and complex process that can take anywhere from six months to 18 months, depending on the complexity of the matter and the approach taken by the regulator.
Using Agents or Representatives
In order to provide financial services in Croatia, foreign institutions may use agents or representatives, subject to relevant Croatian laws. For example:
- Payment institutions may use payment agents
- Electronic money institutions may use electronic money institution representatives or distributors
- Investment firms may use tied agents
These representatives have rights and obligations that are generally in line with applicable EU law.
Limitations and Restrictions on the Use of Agents
However, there are certain limitations and restrictions on the use of these agents, particularly in cross-border scenarios where financial services are provided on a permanent basis. In such cases, entities providing these services would need to establish a local presence, usually in the form of a branch.
Regulatory Approach
Despite this rule, regulators have been known to take a relatively relaxed approach, allowing the permanent provision of services without a local presence. Nevertheless, it is essential for foreign passported financial institutions to seek specific advice from legal advisors and the regulator before proceeding with any banking or financial services implementation.
Outsourcing (Externalisation)
Furthermore, outsourcing or “externalisation” is explicitly regulated by three notable pieces of legislation relevant for banking and financial services in Croatia:
- Credit Institutions Act
- Payment System Act
- Electronic Money Act
Externalisation requires notification to the regulator, adequate risk management, and allowing direct supervision over the externalised business.
Conclusion
As a result, fintech businesses looking to operate in Croatia should be aware of these regulations and seek guidance from experienced legal advisors to ensure compliance with all relevant laws and regulations.
Contact Us
If you have any questions or concerns about obtaining a banking or financial services license in Croatia, please do not hesitate to contact our team at Kinstellar. Our partners, Edin Kakaraš (+385 1 5555 663), Mihovil Granić (+385 1 5555 661), and Senior Associate Andrej Skljarov (+385 1 5556 770) are here to help you navigate the complex regulatory landscape.
About Kinstellar
Kinstellar is a leading law firm in Central and Eastern Europe, providing expert legal advice to clients across a range of industries. Our team has extensive experience in banking and financial services regulation and is well-equipped to assist fintech businesses with their licensing and compliance needs.