We provide comprehensive support for obtaining a Specialised License as an Ancillary Service Provider in Bahrain.
Advapay is ready to assist with the licensing process, specifically tailored for Payment Service Providers, as well as additional activities such as Card Processing, Account Information Services, or Payment Initiation Services, if applicable. Our all-inclusive service package includes:
01
Arranging an introductory meeting with the regulatory authority
02
Preparing the initial documentation for the application process
03
Maintaining ongoing communication with the regulator throughout the authorisation process
04
Introducing corporate service providers, accountants, and other essential contractors
05
Facilitating partnerships and additional requirements as needed
06
Assisting in sourcing qualified local personnel
What is a Ancillary Service Provider Specialised License in Bahrain
Companies registered in Bahrain that wish to provide payment services must be authorised by the Central Bank of Bahrain (CBB) and obtain a Specialised License as an Ancillary Service Provider. This license specifies the type of activity, such as a Payment Service Provider or additional services like Card Processing, Account Information Service Provider, or Payment Initiation Service Provider, if applicable.
As of October 29, 2024, 34 companies hold an Ancillary Service Provider license, with 19 authorised to provide Payment Services. Additionally, 4 companies not registered as Payment Service Providers are licensed specifically for Card Processing.
For companies authorised by the CBB as Payment Service Providers or Card Processing Companies, there are no restrictions on the geography of clients (whether legal entities or individuals), transaction volumes, or the choice of correspondent banks and other financial partners. The only restriction pertains to balance limits on prepaid cards.
Bahrain’s well-established regulatory regime makes it an ideal jurisdiction for companies with global ambitions, particularly those targeting the Asian, MENA, and African markets. Additionally, the country boasts a robust local banking infrastructure, supporting seamless business operations.
Regulator
The Central Bank of Bahrain (CBB) is the sole regulator of Bahrain’s financial sector, overseeing all banking, insurance, investment, and capital market activities. It is responsible for implementing the Kingdom’s monetary and foreign exchange policies, managing government reserves and debt issuance, issuing the national currency, and supervising the country’s payment and settlement systems. The CBB’s governance is primarily guided by the Central Bank of Bahrain and the Financial Institutions Law of 2006 (the “CBB Law”).
The application and authorisation process
The CBB issues a licensing decision within 60 days after all required documents have been submitted in full. However, in practice, the entire licensing process—from the initial application to final approval—can take longer, as the CBB may have questions or request additional information. Typically, obtaining a Bahrain license takes between 3 to 9 months. The full application and authorisation process is as follows:
STEP 1
Introduction to the Regulator, including a presentation of the project team and concept to receive feedback.
STEP 2
Submission of general business, legal, compliance, security, and other required documents (see the list below).
STEP 3
Preliminary approval.
STEP 4
Depositing the share capital and a bank guarantee.
STEP 5
Issuance of the license.
STEP 6
Submission of additional documents within six months after the license is issued (see the list below).
General requirements
Authorisation for the management
Licensees must obtain the CBB’s prior written approval for any person intending to assume a controlled function, including the following roles:
• CEO or General Manager
• Board Members
• Head of functions (for example, Financial Officer, Operating Officer, Technology Officer or Risk Manager)
• Compliance Officer
• MLRO (Money Laundering Reporting Officer)
The CEO and Compliance Officer must be Bahrain residents. While there are no strict residency requirements for other controlled functions, having a significant proportion of Bahrain residents on the board and in C-level positions is encouraged.
Initial capital requirements for card processing and payment service providers
Card processing and payment services licensees must maintain a minimum core capital of BD 250,000 (approximately EUR 615,000 as of October 29, 2024).
These funds must be held in the company’s account from pre-approval (and prior to final approval) and may be used for company development after operations begin. The Central Bank of Bahrain may require an increase in share capital if it deems it necessary based on the nature and scale of the business.
External auditor
Companies must appoint an external auditor, subject to approval by the regulator.
Bank guarantee
Payment service providers and card processing companies must provide a bank guarantee of BD 50,000.
Experienced staff
There is no fixed list of required positions for each company (except for the CEO, Compliance Officer, and MLRO). However, the licensee’s staff, as a whole, must collectively possess a sufficient range of skills and experience to manage the licensee’s affairs in a sound and prudent manner.
Documents
The following documents must be submitted with the official application:
• Authorisation application for each controller (beneficial owner)
• Authorisation application for each controlled function
• Business plan
• Programme of Operations
• Governance arrangements and internal control mechanisms
• Business continuity arrangements
• Internal Control Mechanisms to comply with AML/CFT obligations
• Procedure for monitoring, handling, and addressing security incidents and security-related customer complaints
• Process for filing, monitoring, tracking and restricting access to sensitive payment data
• Security policy documentation
• Other documents, including corporate documents and financial accounts for the applicant and its parent organisations
Documents to be submitted within 6 months after obtaining the license:
• A detailed action plan for establishing the licensee’s operations and supporting infrastructure, including the completion of written policies and procedures and the recruitment of remaining employees
• A description of the IT system to be used, including details on backup procedures for IT systems and other records
• A description of the business continuity plan
• Additional documents as specified in the Regulator’s Rulebook
Jurisdictions
we cover
We have a strong focus on fintech businesses like digital banks, e-wallets, fiat-crypto wallets & e-commerce banking and remittance.
