Electronic money institution (EMI) license
Last Update: 24.03.2026
Obtaining an EMI license in Europe is a crucial step for fintech innovation, providing companies with the opportunity to implement advanced payment solutions and access to the vast EU market. With the support of Gofaizen & Sherle, you will be provided with a full range of e-money license services, from initial consultation to successful authorization.
An Electronic Money Institution (EMI) license authorizes a non-bank legal entity to issue electronic money, safeguard client funds, provide payment accounts (including IBANs), and execute payment transactions under a single regulatory authorization. In the European Union, an authorised EMI must maintain a minimum initial capital of €350,000 pursuant to Directive 2009/110/EC (EMD2), Article 4, and comply with client fund protection, AML, and governance requirements under EMD2 and Directive 2015/2366 (PSD2). Once authorized, an EMI may exercise passporting rights across 30 EU/EEA member states through the regulatory notification procedure. The typical authorization period for a full EMI ranges from 6 to 18 months, depending on the supervisory authority and completeness of the application.
Quick Facts
| Parameter | Authorised EMI |
|---|---|
| Legal basis | Directive 2009/110/EC (EMD2) + Directive 2015/2366 (PSD2) |
| Minimum initial capital | €350,000 |
| Typical authorization period | 6–18 months |
| Passporting scope | 30 EU/EEA states |
| Supervisory authority | National Competent Authority under EBA oversight |
| Safeguarding requirement | Mandatory segregation or insurance equivalent |
| Estimated first-year budget | €500,000–750,000 |
What is Electronic Money Institution License?
An EMI license is a regulatory authorization granted to institutions that issue electronic money and provide payment services without qualifying as credit institutions. Article 2 of Directive 2009/110/EC defines electronic money as electronically stored monetary value issued on receipt of funds and accepted by persons other than the issuer. Article 4 establishes the €350,000 minimum initial capital requirement for authorised EMIs.
EMIs are prohibited from accepting deposits or engaging in lending activities funded by safeguarded client money. Client funds must be ring-fenced in a dedicated account or covered through an equivalent insurance mechanism in accordance with EMD2 and PSD2 provisions. This limitation distinguishes EMIs from credit institutions regulated under the Capital Requirements Regulation (CRR).
According to the European Banking Authority register (as of 2025), more than 700 electronic money institutions are authorized across the EEA. The United Kingdom (300+) and Lithuania (80+) represent two of the most active authorization hubs within the region. A single authorised EMI license enables passporting across all 30 EU/EEA states following regulator-to-regulator notification procedures.
EMI vs. Banking License
An EMI operates under a payments-focused regulatory framework. A bank operates under prudential supervision as a credit institution.
| Feature | EMI | Bank |
|---|---|---|
| Minimum capital | €350,000 | €5,000,000 minimum initial capital under Regulation (EU) No 575/2013 (CRR), subject to higher national requirements where applicable |
| Deposit taking | Not permitted | Permitted |
| Lending activity | Not permitted from safeguarded funds | Permitted |
| Deposit Guarantee Scheme | Not applicable | Mandatory participation |
| Authorization timeline | 6–18 months | 12–24+ months |
What Activities Does an EMI License Authorize?
An authorised Electronic Money Institution may issue electronic money and provide payment services listed in Annex I of Directive 2015/2366 (PSD2).
Under Directive 2009/110/EC (EMD2) and PSD2, an authorised EMI may:
- Issue electronic money upon receipt of funds (EMD2, Article 2);
- Provide payment accounts, including IBAN-based accounts;
- Execute credit transfers and direct debits (PSD2, Annex I);
- Issue payment cards and operate card programs;
- Execute payment transactions through cards or digital wallets;
- Provide money remittance services (PSD2, Annex I, point 6);
- Conduct foreign exchange activities directly related to payment services;
- Provide payment initiation services (PIS) (PSD2, Article 4(15));
- Provide account information services (AIS) (PSD2, Article 4(16)).
These activities remain subject to client fund segregation and AML compliance obligations.
What an EMI License Does NOT Permit
An EMI license does not confer the status of a credit institution and does not allow the holder to engage in deposit-taking or prudential banking activities under Regulation (EU) No 575/2013 (CRR).
An authorised EMI may not:
- Accept deposits within the meaning of banking legislation,
- Use safeguarded client funds for lending or investment,
- Participate in a Deposit Guarantee Scheme,
- Provide consumer or commercial loans funded by client money,
- Engage in investment banking or securities underwriting.
Electronic money must be redeemable at par value at any time in accordance with Article 11 of Directive 2009/110/EC (EMD2).
Authorised EMI vs. Small EMI
Directive 2009/110/EC (EMD2) establishes two regulatory categories of electronic money institutions: authorised EMIs and small EMIs. The distinction is set out in Article 4 (initial capital) and Article 9 (optional exemption regime for small institutions).
An authorised EMI operates under the full regulatory framework of EMD2 and PSD2 and benefits from EU/EEA passporting rights. A small EMI operates under a simplified national regime and does not obtain cross-border passporting privileges.
| Parameter | Authorised EMI | Small EMI |
|---|---|---|
| Legal basis | EMD2 (full authorization) | EMD2, Article 9 |
| Minimum initial capital | €350,000 (Article 4) | No fixed EU minimum (national rules apply) |
| Average outstanding e-money | No statutory cap | Must not exceed €5,000,000 |
| Passporting | 30 EU/EEA states | Not available |
| Regulatory scrutiny | Full prudential and safeguarding review | Simplified authorization regime |
Under Article 9 of EMD2, Member States may exempt certain institutions from full authorization if the average outstanding electronic money does not exceed €5 million and other conditions are satisfied. These entities are supervised domestically and may operate only within the Member State of registration.
Small EMI status does not remove safeguarding or AML obligations. Client funds must still be protected, and the institution remains subject to national supervisory oversight.
EMI License vs. Payment Institution License
An EMI license authorizes both the issuance of electronic money and the provision of regulated payment services. A Payment Institution (PI) license authorizes payment services only and does not allow the issuance of electronic money.
Electronic money is defined in Article 2(2) of the Electronic Money Directive as electronically stored monetary value issued on receipt of funds and accepted by persons other than the issuer. Payment institutions execute transactions but do not create stored monetary value on their balance sheet.
Key Differences
| Feature | EMI | Payment Institution (PI) |
|---|---|---|
| Regulatory framework | Electronic Money Directive + PSD2 | PSD2 |
| Issue electronic money | Yes | No |
| Initial capital | €350,000 | €20,000–125,000 |
| Safeguarding | Mandatory | Mandatory |
| Ability to maintain e-money balances | Yes | No |
| Passporting | Yes | Yes |
The initial capital for a payment institution ranges from €20,000 to €125,000 depending on the services provided under PSD2.
An EMI may provide all services available to a payment institution. A payment institution may not issue electronic money unless it obtains separate EMI authorization.
The structural distinction lies in balance-sheet treatment. An EMI records electronic money as a liability redeemable at par value. A payment institution processes funds without issuing electronic money.
EMI License Requirements
Initial Capital and Own Funds
An authorised EMI must maintain a minimum initial capital of €350,000 in accordance with Article 4 of Directive 2009/110/EC.
Pursuant to Article 5 of the same Directive, own funds must at all times be at least equal to the higher of:
- (a) €350,000;
- (b) 2% of the average outstanding electronic money.
For the purposes of Article 5, average outstanding electronic money corresponds to the average total financial liability related to issued electronic money over the preceding six months.
Supervisors verify:
- Source and legality of capital,
- Capital permanence,
- Financial projections (typically 3-year forecasts),
- Stress assumptions and liquidity buffers.
Failure to demonstrate capital adequacy results in refusal of authorization.
Safeguarding of Client Funds
Client funds received in exchange for electronic money must be safeguarded immediately upon receipt. Safeguarding may be implemented through:
- Segregation in a dedicated safeguarding account with a credit institution.
- An equivalent insurance or guarantee mechanism.
Client funds may not be commingled with the institution’s own funds and may not be used for lending or investment purposes.
Daily reconciliation procedures and documented safeguarding policies are required. Supervisors review contractual arrangements with safeguarding banks as part of the authorization process.
Governance and Management
The management body must demonstrate professional competence, integrity, and sufficient experience in financial services.
Regulators assess:
- Fitness and propriety of directors;
- Allocation of responsibilities;
- Risk management framework;
- Internal control systems.
At least two effective directors are generally expected under EU supervisory practice. A compliance function and an anti-money laundering reporting officer (MLRO) must be appointed prior to authorization.
AML and Compliance Framework
EMIs are subject to EU anti-money laundering legislation and national transpositions of the AML Directives.
Applicants must provide:
- Risk assessment,
- AML/CTF policy,
- Customer due diligence procedures,
- Transaction monitoring framework,
- Suspicious activity reporting process.
Supervisors review the proportionality and operational readiness of AML systems before granting authorization.
IT Systems and Operational Resilience
EMIs must implement secure and resilient IT infrastructure capable of supporting payment processing and fund protection obligations.
From 17 January 2025, institutions fall within the scope of the Digital Operational Resilience Act (DORA), which imposes requirements on:
- ICT risk management,
- Incident reporting,
- Third-party ICT oversight,
- Operational continuity testing.
Applicants must demonstrate documented ICT governance and outsourcing controls during the authorization review.
How to Obtain an EMI License (Step by Step)
The authorization process for an Electronic Money Institution consists of preparatory, structural, and supervisory review stages. In most EU jurisdictions, the total process takes between 6 and 18 months, depending on the readiness of the applicant and the supervisory authority’s review cycle.
Step 1: Jurisdiction Selection
The applicant selects the Member State of incorporation based on supervisory approach, processing timelines, and operational strategy.
During this stage, the following are assessed:
- Regulatory expectations of the national competent authority,
- Substance requirements,
- Tax and operational considerations,
- Passporting strategy.
Deliverable: confirmed jurisdiction and regulatory roadmap.
Step 2: Company Incorporation and Corporate Structuring
A legal entity is incorporated in the chosen jurisdiction. Corporate documents must reflect the intended EMI activity.
This stage includes:
- Shareholding structure verification,
- Identification of ultimate beneficial owners,
- Appointment of directors,
- Drafting of articles of association.
Capital structure must align with the €350,000 initial capital requirement.
Step 3: Capital Formation and Safeguarding Model Design
Initial capital must be deposited and evidenced prior to submission of the application.
Simultaneously, the applicant finalizes:
- Safeguarding account arrangements,
- Draft safeguarding agreement with a credit institution,
- Liquidity model.
Supervisors review proof of capital origin and availability.
Step 4: Preparation of Documentation Package
The application file must include:
- Business plan (typically 3-year financial projections);
- Program of operations;
- Risk management framework;
- AML/CTF policy;
- Governance structure documentation;
- IT architecture description;
- Outsourcing agreements.
Incomplete documentation is a primary cause of delays.
Step 5: Submission and Regulatory Completeness Check
Upon submission, the supervisory authority performs a completeness assessment.
If deficiencies are identified, additional information requests are issued. The statutory review clock typically starts only after the file is deemed complete.
Step 6: Supervisory Review and Decision
During this phase, regulators assess:
- Capital adequacy,
- Safeguarding arrangements,
- Governance fitness and propriety,
- Operational resilience,
- AML systems.
Regulators may conduct interviews with management and request additional clarifications.
In practice, the review period ranges from 3 to 9 months after completeness confirmation.
How Much Does an EMI License Cost?
The total cost of obtaining and launching an authorised Electronic Money Institution varies depending on jurisdiction, operational scope, and staffing structure. In most EU Member States, the realistic first-year budget ranges between €500,000 and €750,000, including capital, regulatory fees, and operational setup.
Core Cost Components
| Cost Item | Typical Range |
|---|---|
| Initial capital | €350,000 |
| Legal and regulatory preparation | €30,000–80,000 |
| Regulatory application fee | €5,000–50,000 |
| Office and local substance | €80,000–150,000 annually |
| IT systems and compliance setup | €20,000–80,000 |
| External audit and reporting | €10,000–30,000 annually |
| Total first-year budget | €500,000–750,000 |
The €350,000 initial capital is a prudential requirement and cannot be used to fund operational expenses. It must remain available as regulatory capital.
Operational expenditure during the first year typically includes:
- Compliance officer and MLRO remuneration,
- IT infrastructure and licensing,
- Core banking or payment platform integration,
- Safeguarding bank fees,
- External audit and reporting costs.
A small EMI regime significantly reduces capital requirements but restricts scale and eliminates passporting rights.
The primary financial consideration is not the application fee, but the ability to sustain regulatory capital and operational expenses during the authorization period.
Best Jurisdictions for an EMI License in Europe
EU authorization under Directive 2009/110/EC provides passporting across 30 EU/EEA states. While the €350,000 capital threshold is harmonised, supervisory practice, review depth, and ongoing oversight differ between jurisdictions.
Emi license in Lithuania
Emi license in Lithuania is a key tool for FinTech business development, allowing to legally issue electronic money and provide payment services in the EEA without additional licenses. Licensing opens access to international transfers and payments, facilitating expansion into the EU. Regulation by the Central Bank of Lithuania provides a robust framework for operation, promoting transparency and security of financial transactions.
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Emi license in Malta
Malta is supervised by the Malta Financial Services Authority (MFSA).
Key supervisory characteristics include:
- Typical authorization period: 9–15 months,
- Annual supervisory fees generally range from approximately €4,500 to €7,000 depending on the scope of payment services,
- Detailed review of governance structure and board composition,
- Emphasis on local substance and effective management presence.
Malta applies a conservative review approach, particularly with respect to risk governance and safeguarding controls.
Emi license in Cyprus
Cyprus is supervised by the Central Bank of Cyprus and is often compared to Lithuania due to its active fintech sector.
While capital requirements are identical under EU law, Cyprus generally places greater emphasis on internal control documentation and safeguarding structure validation during the review stage. Authorization timelines typically range from 9 to 14 months.
Compared to Lithuania, Cyprus tends to require more extensive documentation at the application stage but follows a similar prudential framework under EMD2 and PSD2.
EMI License in the United Kingdom
EMIs in the United Kingdom are regulated by the Financial Conduct Authority under the Electronic Money Regulations 2011.
Key characteristics:
- Typical authorization period: 9–15 months,
- No EU passporting rights,
- Separate authorization required for EU operations,
- Domestic UK payment market access only.
Following Brexit, UK authorization does not provide access to the EU single market. Institutions targeting cross-border EU operations must obtain separate authorization within an EU Member State.
We are working directly with the following regulators
FSA
Financial Supervisory Authority of Estonia
FIU
Estonian Financial Intelligence Unit
CBN
Czech National Bank
Bank of Lithuania
Lithuanian Central Bank
CBI
Central Bank of Ireland
BaFin
Federal Financial Supervisory Authority (FFSA) of Germany
FCIS
Financial Crime Investigation Service
GFSC
Gibraltar Financial Services Commission
EMI License and MiCA: Stablecoin Issuers
Regulation (EU) 2023/1114 on Markets in Crypto-Assets (MiCA) establishes a specific regime for electronic money tokens (EMTs), commonly referred to as fiat-referenced stablecoins.
Under Article 48 of MiCA, only a credit institution or an authorised Electronic Money Institution may issue electronic money tokens within the European Union. As a result, an EMI license is a prerequisite for issuing fiat-backed stablecoins that qualify as EMTs.
MiCA entered into force on 29 June 2023. The provisions governing asset-referenced tokens and electronic money tokens apply from 30 June 2024.
An EMI issuing electronic money tokens must comply with:
- Capital and safeguarding requirements applicable to EMIs;
- Reserve asset segregation obligations;
- Redemption at par value upon request;
- White paper publication requirements;
- Ongoing reporting to the competent authority.
Issuance of electronic money tokens without EMI or banking authorization constitutes a regulatory breach under MiCA.
MiCA does not replace the Electronic Money Directive. Instead, it builds on the existing EMI framework by introducing additional requirements for tokenized representations of fiat currency.
FAQ about EMI license
What is an EMI license?
An EMI (Electronic Money Institution) license authorizes a non-bank institution to issue electronic money and provide regulated payment services. In the EU, an authorised EMI must maintain a minimum initial capital of €350,000 and comply with safeguarding and AML requirements. Once authorized, it may passport services across 30 EU/EEA states.
How much capital is required for an EMI license?
An authorised EMI in the European Union must maintain a minimum initial capital of €350,000 under Article 4 of Directive 2009/110/EC.
In addition, pursuant to Article 5 of the same Directive, own funds must at all times be equal to at least the higher of €350,000 or 2% of the average outstanding electronic money.
How long does it take to obtain an EMI license?
The authorization process typically takes between 6 and 18 months. The preparatory phase usually requires 3–4 months, followed by a supervisory review period of 3–9 months after the application is deemed complete.
Can an EMI accept deposits?
No. An EMI may not accept deposits within the meaning of banking legislation. Client funds must be safeguarded and may not be used for lending or investment purposes.
What is the difference between an EMI and a bank?
An EMI issues electronic money and provides payment services. A bank accepts deposits and provides lending under prudential banking supervision. Banks require a minimum of €5,000,000 in initial capital under the Capital Requirements Regulation, compared to €350,000 for an authorized EMI.
What is the difference between an EMI and a Payment Institution?
An EMI may issue electronic money and provide payment services. A Payment Institution provides payment services only and cannot issue electronic money. The initial capital for a Payment Institution ranges from €20,000 to €125,000 depending on the payment services provided.
What is a Small EMI?
A Small EMI operates under Article 9 of the Electronic Money Directive. It is exempt from the €350,000 capital requirement but must not exceed €5,000,000 in average outstanding electronic money and does not benefit from EU passporting rights.
Can an EMI operate across the EU?
Yes. An authorised EMI may passport its services across 30 EU/EEA states through the regulatory notification procedure. Small EMIs do not have passporting rights.
Does an EMI license allow issuing stablecoins?
Yes, if the token qualifies as an electronic money token under Regulation (EU) 2023/1114 (MiCA). Article 48 of MiCA requires the issuer to be either an authorized EMI or a credit institution.
What happens if safeguarding requirements are breached?
Failure to properly safeguard client funds may result in supervisory sanctions, administrative fines, or withdrawal of authorization. Under PSD2 Article 103, administrative fines may reach up to 10% of annual turnover. Supervisors treat safeguarding failures as high-risk regulatory breaches.
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