On January 2, 2024, the Financial Regulatory Authority (“FRA”) issued Decree No. 286 of 2023 (the “Decree”) regarding the rules and procedures for the establishment and licensing of emerging financial technology companies to engage in non-banking financing activities.

The Decree applies to a variety of non-banking financing activities, including, inter alia, real-estate financing, consumer financing and factoring. The Decree stipulates the conditions required to enable the incorporation of a non-banking financing company, including, inter alia, the legal form of the company, its minimum capital, and further requirements with respect to digital technology and platforms used to perform non-banking financing activities.  It is also worth noting that the new Decree requires that a minimum of twenty-five percent (25%) of the capital of non-banking financing companies shall be owned by financial technology companies or individuals.

Furthermore, the Decree further stipulates the procedures and conditions for obtaining the required license to engage in their activities. This includes, inter alia, a number of undertakings to be submitted by the applicant and/or its shareholders related to, inter alia, the distribution of dividends, insurance policy against electronic risks and opening of any branches. Additionally, the Decree determines the timeline and duration for obtaining the final license in accordance with relevant decrees regulating various activities with respect to non-banking financing activities.