Emi license in Lithuania
Lithuania stands out as a center of fintech innovation in the EU, thanks to its welcoming environment for fintech, clear legal support, and stable economic environment. The jurisdiction offers an EMI license, opening access to the European single market. Cooperation with Gofaizen & Sherle guarantees a complete package of services for the successful issuance of an Emi license in Lithuania, from initial consultation to license issuance.
Lithuania EMI license (Electronic Money Institution)
EMI license in Lithuania is a profitable tool, increasing the prospects of your business’s growth and development. Gofaizen&Sherle specialists provide a full company set up with all the necessary infrastructure, and support at every stage and the result is a Lithuanian EMI license.
Every company engaged in issuing electronic currency in Lithuania must obtain an EMI license to legally operate in this jurisdiction. Having a license will allow offline/online payments, providing sub-accounts within a bank account, creating electronic wallets, providing individual IBANs, and transferring money to foreign accounts.
Holders of a Lithuanian license are allowed to provide the above services in the European Economic Area (EEA) without having to obtain an additional license in another EEA state. This license is passported for these activities, which allows you to work in other states. In addition, an entrepreneur may obtain a limited EMI license and provide its services only in Lithuania. In this case, certain restrictions may apply to the company’s turnover.
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All about the Lithuanian EMI license
EMI
- After the UK left the EU, Lithuania is leading the way with a record number of FinTech licenses issued in European jurisdictions. Currently, more than 100 Lithuanian payment institutions and electronic money issuers have already received registration.
- The Central State Bank is loyal to possible errors or shortcomings of the company during the first year of its existence. In addition, there is a special visa procedure in Lithuania, which allows startups to obtain a residence permit in a simplified procedure.
- EMI licenses are issued by the Lithuanian Central Bank. This state regulator, as well as other government institutions issuing licenses in Europe, is guided by the 2009-110 EC Directive, which is the basis of law for issuing electronic money.
- The submitted documentation for the EMI license will be reviewed by the Central Bank of Lithuania within 3 months from the first day of submission. The decision to issue an EMI license will be made after the review, within the same 3 months. If there are shortcomings in the documentation related to the form of the document and its content, the regulatory authority may request corrected forms or missing data on regulatory requirements.
- Since 2016, Lithuania has been a member of the SEPA single payment area, which unites 34 countries of the world. Thanks to a single account in this structure, the country has the right to be a payer and recipient of money within SEPA countries. Thanks to the generated accounts of the CENTROLink payment system, the user has direct access to the Single Euro Payment Area.
- There are 80 fintech companies in Lithuania, with total revenue from e-money and payment services reaching 114.4 million euros in 2020.
- Emi license Lithuania gives companies the right to operate across Europe, issue digital money, create virtual wallets, and open payment accounts, and Visa/Mastercard cards without the need to obtain additional permits. In addition, companies have access to payment systems established by the Bank of Lithuania.
- The process of registering a Lithuanian company is fast and convenient, not requiring the residency of the director for registration.
Capabilities of Lithuanian EMI license compared to classic banks
| Payment Service Provider (PSP) | Electronic Money Institution (EMI) | Specialized Bank | Bank | |
| Payment services/money remittance (In and Out) | ✔ | ✔ | ✔ | ✔ |
| Fiat currency exchange | ✔ | ✔ | ✔ | ✔ |
| Issuance of E-money (opening multicurrency accounts, e-wallets) | — | ✔ | ✔ | ✔ |
| Lending to businesses and individual | — | ✔ — | ✔ | ✔ |
| Deposits to businesses and individuals | — | — | ✔ | ✔ |
| Investment services, clearing, securities emissions | — | — | — | ✔ |
| EU Passporting to provide services in all EU countries | ✔ | ✔ | ✔ | ✔ |
| Payments System by Central Bank (for EUR settlement in SEPA area) | ✔ | ✔ | ✔ | ✔ |
Advantages of a Lithuanian EMI license
EMI
- Relatively fast and simple procedure for obtaining an EMI license.
- Customers can obtain a personal IBAN
- Possibility of SWIFT transfers
- Remote opening of payment accounts for individuals and legal entities
- The company can issue Visa or MasterCard payment cards
- The company can transfer payments with global banks in different currencies
- The company can make its own payment decisions and open accounts. In addition, correspondent accounts around the world
- Providing services for cash deposit or withdrawal and all transactions necessary for payment account operation.
- An extremely attractive tax system with relatively low taxes ranks 6th in the international ranking of Tax competitiveness
- The duration of the license is not limited to time.
- Passporting the license to other EU countries.
- All documents can be submitted in English. In addition, the jurisdiction of Lithuania complies with EU norms and therefore does not require in-depth research.
- Ability to conduct customer checks remotely as part of KYC procedures, through video link, digital signature, or electronic copies of documentation.
- Virtually no fines in the first year of the institution
Stages of EMI License in Lithuania acquisition
PRELIMINARY ASSESSMENT OF THE PROJECT
Stage 1
Result: Initial meeting with the Bank of Lithuania is successfully conducted; The approval to proceed with licensing is received from the Bank of Lithuania
Gofaizen & Sherle conducts preliminary analysis of the client prepares for the initial meeting with the Bank of Lithuania, which includes:
- Analysis of the documents that client have on hands
- Preparation of materials for the meeting with the Bank of Lithuania
- Preparation for initial meeting with representatives of the Bank of Lithuania
- Representing the client on the initial meeting with the bank of Lithuania
PRE-LICENSING PROCESS
Stage 2
Result: Basic documents have been prepared; there is a complete understanding of the project; preliminary approval from the Central Bank of Lithuania obtained
Gofaizen & Sherle After the successful meeting with Bank of Lithuania conducts pre-licensing process which includes the following:
- General consulting regarding the EMI licensing process
- Initial assessment for infrastructure require
- Preparation of (a) Business plan (b) Program of Operations (c) preliminary Financial Forecasts
- Shareholders and Group Companies Due Diligence
- Local Company Formation and assistance with Bank account opening for share capital contribution
- Human resource (at least 4 employees shall be in Lithuania) -assistance in essential staff recruitment process; drafting employment agreements
- Premises search (HQ should be based in Lithuania)
LICENSING
Stage 3
Result: All the necessary documents are drafted, application submitted; license granted
Gofaizen & Sherle carry out assistance for licensing process according to the following steps:
Preparation of legal, financial and IT documents (non-exhaustive list):
- Description of the Management Structure
- Compliance documentation (AML/KYC/KYT etc.)
- Financial documentation and forecasts
- Operational Risk Procedures
- IT Procedures
Application for the license
- Submission of the application for the license
- Representation and guiding through the entire licensing process
- Payment of the state fees
INFRASTRUCTURE SET-UP
Stage 4
Result: All the necessary arrangements for the project are completed; EMI license holder fully operative
The stage is necessary for the license holder to be fully operative and be capable of initiating activity. Deliverables include the following:
- Setup of IT Systems -mediation in finding an IT system supplier and/ or facilitation of IT; system development to meet EMI License requirements
- Compliance –consulting and training of employees on KYC process, AML and terrorist financing check tools according to the specs of the project
- Banking Partner –to meet the requirements on clients’ funds segregation, provide FX and/or cross-border transfers, and other financial services
MAINTENANCE AND ADD-ONS. ONGOING AFTER LICENSE ACQUISITION BY REQUEST
Stage 5
This stage is necessary to support and maintain the structure and includes:
- Accounting services
- Auditing
- Opening of safeguarding accounts
- Connection to SWIFT payment scheme
- Agreement for the issuing own brand MasterCard cards
- BIC/SWIFT and LEI codes acquisition
- Reporting to Central Bank on the regularly basis
- Applying for activity in other jurisdictions (incl. passporting)
- Consulting on the arising issues from Central Bank
Types of EMI Licenses in Lithuania
In Lithuania, two types of EMI licenses are offered, each with its unique features and advantages.
- Regular EMI license
This type of license provides the opportunity for a wide range of activities related to electronic money services. The EMI ordinary license is most suitable for large financial institutions and companies with a stable operational structure and a large customer base in the EU. It allows products and services to be offered within the European Economic Area (EEA) without opening additional authorizations in each jurisdiction. However, obtaining and maintaining this license requires strict compliance with numerous regulations and standards.
- EMI Limited Activity License
This variant of the EMI license grants the right to conduct e-money activities exclusively within Lithuania. It is designed for startups and companies with low transaction volumes that wish to provide services within a single jurisdiction. This license is an ideal choice for product testing and experimentation before entering new markets. Companies with a limited license are subject to less stringent licensing and governance requirements, but their options are reduced regarding how they can manage average outstanding e-money and/or perform payment transactions.
Distinction between an EMI license and a PI license in Lithuania
The Lithuanian financial ecosystem has two key types of licenses for electronic payment market participants: Payment Institution (PI) and Electronic Money Institution (EMI) licenses issued by the Bank of Lithuania:
Lithuania EMI license:
- Authorizes the creation and management of electronic money.
- Allows long-term storage of customers’ funds in electronic wallets.
- Funds can be used at any time to make payments or purchases.
- Subject to strict regulatory standards to ensure the security and stability of funds storage.
- Includes the functionality of the PI license and extends its capabilities with the issuance of electronic money.
Lithuania PI license:
- Focuses on processing payment transactions between parties.
- Requires prompt transfer of funds from payment accounts on the next business day after receipt of a payment order.
- Does not provide for long-term storage of client funds on accounts.
- Violation of rules on speed of funds transfer may result in sanctions, up to and including revocation of license.
- It is intended for companies providing direct payment services without the function of issuing electronic money.
The choice between EMI and PI licenses depends on the company’s business model and the expected volume of services. EMI is suitable for organizations wishing to offer their customers comprehensive electronic financial management solutions, including storage and reusability of funds. PI is aimed at companies specializing in payment services and money transfers, with a focus on fast and efficient transaction processing.
- Charter of the payment institution
- Corporate documents
- Company requisites
- Detailed business plan
- Action program and activity structure
- Proof of minimum share capital
- Bank account
- Founders’ passports and certificate of registration
- A detailed description of the generally accepted measures to protect and regulate clients’ funds
- Local office lease agreement
- Criminal records of all beneficiaries
- Description of the use of internal management controls, including administrative procedures, risk management procedures, and accounting procedures
- Description of the internal management control mechanism for the performance of duties to prevent money laundering and terrorist financing
- Description of company policies: customer funds protection measures, risk and accounting controls, AML, organizational structures, and branches
- Confirmation that shareholder equity does not fall below a specified minimum;
- Description of the organizational structure, including the use of branches and agents, as well as plans to outsource and participate in payment systems for the distribution and redemption of electronic money;
- Information on persons with qualifying equity interests, their assets and rights, and proof of their suitability to properly manage the institution;
- Identification of management and proof of their reputation and compliance with legal requirements;
- Information on the audit services provided by the audit firm or independent auditor.
Although the requirements of PSD2 have not yet been implemented in Lithuanian legislation, the documents must comply with PSD2 and its principles.
- The minimum share capital of 350,000 euros (no share capital requirement for a restricted license)
- Proof of origin and receipt of finances
- Opening of a local office
- Opening of a Lithuanian bank account
- Availability of AML officer
- Impeccable reputation of the company’s beneficiaries
- A director or manager must have higher education in law or economics, management or business administration, and have an impeccable reputation, competence, and practical experience as the head of the institution.
- There must be at least one individual among the shareholders, Lithuanian residency is not required. The main requirement is the age over 18 and impeccable business reputation.
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Legislation for Electronic Money Institutions in Lithuania
Lithuania attracts fintech companies with its innovative and business-friendly regulations developed by the Bank of Lithuania. The regulator’s mission is to maintain the stability and soundness of the national financial system, which is important for the management of EMI (electronic money institutions) licenses. The Bank actively cooperates with the European Central Bank and participates in shaping the monetary policy of the Eurozone, which directly affects EMI regulation.
As part of its 2022-2025 strategy, the Bank of Lithuania has set priorities that strengthen its role as an EMI regulator:
- Improving the quality and accessibility of financial services.
- Expanding the use of payment instruments.
- Strengthening economic and financial literacy.
- Managing climate risks.
- Maintaining the Bank’s sustainable operations.
- Digitalization of processes and services.
- Strengthening the resilience of the financial system.
- Developing competencies and strengthening international representation.
Lithuania, as a member of the European Union, has integrated into its regulatory framework several key EU directives affecting the financial sector and data protection:
The Electronic Money Directive (EMD), or Directive 2009/110/EC regulates the activities of electronic money institutions, establishing rules for the issuance and circulation of electronic money in the European Union. The Directive aims to encourage the development and use of electronic money while ensuring its safety and security. It sets requirements for the capitalization, management, and supervision of institutions, which contributes to increasing consumer confidence and the efficiency of payment systems.
The Second Payment Services Directive (PSD2), or Directive (EU) 2015/2366 broadens and deepens the regulation of payment services in the EU, introducing new rules to improve and integrate the market for payment services in Europe. The Directive aims to increase competition includes requirements for payment transparency and security, and introduces the concept of open banking, allowing third parties access to customers’ banking data with their consent.
The EU Anti-Money Laundering Directives (AMLD) comprise several successive regulations aimed at preventing the use of the EU financial system for money laundering and terrorist financing. The directives require financial institutions to conduct thorough customer due diligence, monitor transactions, and report suspicious activity.
The General Data Protection Regulation (GDPR), which came into force in May 2018, sets strict rules for the processing and protection of personal data in all EU member states. The regulation ensures the rights of citizens to access, correct, and delete their data, and requires organizations to take measures to protect data, including appointing dedicated data protection officers and ensuring an adequate level of security for personal data.
The Lithuanian regulatory framework governing the activities of EMI licensees (electronic money institutions) is a comprehensive set of laws and regulations ensuring effective regulation in the financial services sector. These legislative acts not only contribute to streamlining the activities of EMIs but also create conditions for their stable and secure operation:
- The Law on Electronic Money and Electronic Money Institutions sets standards for the issuance and circulation of electronic money, as well as norms to be followed by institutions carrying out these operations.
- The Law of the Republic of Lithuania on Financial Institutions regulates various aspects of the operation of financial institutions, including management, financial reporting, and capitalization requirements.
- The Law of the Republic of Lithuania on Payment Institutions defines rules concerning the provision of payment services, including requirements for transparency of operations and consumer protection.
- The Law of the Republic of Lithuania on the Prevention of Money Laundering and Terrorist Financing establishes measures to combat financial crimes, such as customer due diligence and transaction monitoring.
- The Law of the Republic of Lithuania on the Legal Protection of Personal Data ensures the protection of personal data by GDPR standards by regulating the collection, processing, and transfer of data.
- The Rules on Issuing Licenses to Electronic Money Institutions and Payment Institutions describe the procedure for obtaining an EMI license in Lithuania to operate in the field of electronic and payment services, including evaluation criteria and required documentation.
Financial Statement
Companies holding e-money licenses in Lithuania are required to submit regular financial and other reports to the Bank of Lithuania. These reports are necessary to monitor their activities and include the following requirements:
Quarterly reporting
Every quarter, institutions are required to file financial reports that reflect their economic condition and performance, as well as specialized reports monitoring measures to prevent money laundering and terrorist financing.
Annual reporting
At the end of the fiscal year, comprehensive reports are required, including data on loans extended, deposits, number of employees, and complaints received. Additionally, audited financial statements with an auditor’s report are provided.
Risk and Safety Reports
Reports detailing operational risks as well as an annual report on anti-money laundering and countering the financing of terrorism must also be prepared.
The Bank of Lithuania has the right to request additional documents and reports on current regulatory needs. This ensures transparency and control of institutions’ activities in the e-money sector.
FAQ about the Lithuanian EMI license
What is the EMI license in Lithuania?
An E-money license in Lithuania is an authorization issued by the Bank of Lithuania allowing institutions to issue and manage electronic money. It establishes requirements for operations, capitalization, and risk management.
How to get an EMI license in Lithuania?
To obtain an EMI license Lithuania must submit a package of documents to the Bank of Lithuania, including a business plan, financial projections, and management and ownership information. The application must comply with risk management and capitalization requirements.
How much is the EMI license in Lithuania?
The final cost of the Lithuania EMI license for sale may vary depending on the specific situation, the company’s objectives, and the use of legal advisors. The license fee for a full E-money license is EUR 1,463 and for a small E-money license EUR 1,235.
Who is the regulator of EMI in Lithuania?
In Lithuania, the regulator of e-money institutions is the Bank of Lithuania. This authority controls compliance with regulations and standards in the financial services sector, including the issuance and management of EMI licenses.
When do you need a Lithuanian EMI license?
An EMI license in Lithuania is required if your company plans to issue and manage electronic money in Lithuania or provide payment services within the EU. The license allows you to legally carry out activities related to electronic money, such as storage and processing of customer funds, their transfer, as well as issuance and management of electronic currency.
What activities are permitted under a regular EMI license in Lithuania?
E-money license Lithuania allows companies to carry out many activities, including issuing and storing electronic money, providing payment instruments (e.g. virtual cards), organizing domestic and international fund transfers, as well as issuing payment cards, and providing services related to secure online payments and currency conversion.
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