TransferWise applies for Brussels license ahead of Brexit

TransferWise applies for Brussels license ahead of Brexit

Reuters  | Jan 11, 2019 12:18AM ET

TransferWise applies for Brussels license ahead of Brexit

By Inti Landauro and Anna Irrera

NEW YORK/PARIS (Reuters) - London-based financial technology startup TransferWise is applying for a money-transfer license in Brussels, in a bid to ensure its business is not disrupted if Britain crashes out of the European Union without a divorce deal, it said on Thursday.

The money transfer firm will open an office in Belgium's capital, but continue to expand its global headquarters in London where it employs more than 200 people, it said.

"A Belgian license ensures we can continue to provide a great service globally to our customers, whatever happens with the Brexit deal," Chief Executive Kristo Kaarmann said in a statement.

TransferWise chose Brussels as a post-Brexit EU hub because the city is at the heart of the bloc's institutions, Kaarmann said. The company was also attracted by the Belgian central bank's understanding of the payments sector and openness to innovation, he added.

U.S. money transfer rival MoneyGram International Inc (O:MGI) has already opened an office in Brussels and secured a license as a payment provider in Belgium.

More than two years after Britain voted to leave the EU, the future of Brexit remains uncertain, making it unclear on what terms, or if at all, the country will leave as planned on March 29, 2019.

As the expected Brexit date approaches, many firms have announced plans to relocate staff and infrastructure to Paris, Frankfurt, Dublin, Luxembourg or Brussels to keep servicing their customers.

Non-European and British firms are preparing for the possibility that UK-licensed firms could lose the right to offer services in any EU country.

Large U.S. firms like JPMorgan Chase & Co (N:JPM) and BlackRock (N:BLK) have unveiled plans to increase staff headcount in Paris.

TransferWise is one of Europe's best-known fintech startups, having gained popularity by offering a simpler and cheaper alternative to traditional banks for international money transfers.

Co-founded by Estonian friends Taavet Hinrikus and Kaarmann in 2011, TransferWise says it moves more than 3 billion pounds sterling ($3.82 billion) across the world every month and employs 1400 people globally.

The company will initially hire a small number of employees as its founding team in Brussels who will work on compliance, Kaarmann said in a written response to questions from Reuters.

"No one will move from our London office to fill these roles," he added.

The company booked an operating profit of 9.5 million pounds over the 12-month period ending in March 2018 on 117 million pounds in revenue.

© Reuters. Pro-Brexit demonstrators hold signs outside the Houses of Parliament in London

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