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Company in Lithuania UAB – Practice areas – Financial Licenses in Lithuania – EMI License in Lithuania

EMI License in Lithuania

EMI License in LithuaniaMarket participants who have the right to issue electronic money are e-money institutions regulated by the Bank of Lithuania. Payments can be made with electronic money that is stored on electronic devices and issued by an electronic money institution. Besides transferring money (directly and credit), making payments, and obtaining cash withdrawals, an e-money institution can also make money transfers.

E-money institutions can operate throughout the European Union if they are licensed to conduct unlimited activities.

An EMI can hold its clients’ funds, while a money institution cannot. This is the primary difference between the two.

EMI in Lithuania

COST and Stages OF EMI Licence IN LITHUANIA 

STAGE 1

 4,500 EUR
  • Analysis of the company’s business model and planned services
  • Company structure analysis
  • Analysis of the personality of UBOs, their countries of residence
  • Analysis of the project financing model
  • Identification of requirements for the company’s personnel and their qualifications
  • Identification and approval of the requirements of the Bank of Lithuania for filing an application

STAGE 2

Preparation of documents required for applying for EMI, meeting with representatives of the Bank of Lithuania

  • Preparation of the initial application for an EMI licence Lithuania
  • Support when filling out the initial application form
  • Assistance in the preparation of documents describing the structure of the company
  • Assistance in developing a business plan that meets the requirements Bank of Lithuania
  • Analysis of the project platform/website, a guide to its presentation
  • Assistance in opening an account for the subsequent payment of the authorized capital of the company
  • Communication with the regulator at the application stage,
  • Organization of a meeting with representatives of the Bank of Lithuania

STAGE 3

Application for an EMI license, preparation of financial and accounting documentation

  • Documentation of company policies for AML, KYC, and cybersecurity of client assets.
  • A financial plan for the next three years will be prepared, along with a profit and loss statement and cash flow statement.
  • Documentation for the company’s operational processes and procedures (internal policies, risk assessment policies, internal audit process, operational plan, accounting procedures).
  • The preparation of required documents, assistance with filling out the application.
  • Representatives of a company must sign this document to confirm their right to do so.
  • In compliance with Lithuanian legislation, a document describing internal control mechanisms for preventing money laundering and terrorist financing.
  • Incidences and complaints that relate to safety, as well as procedures for monitoring, handling, and investigating them.
  • Customer payment data monitoring, tracking, and restriction procedures.
  • Detailed description of the business continuity processes, procedures for testing the adequacy and effectiveness of such plans, and a statement of operations of exceptional importance.
  • Statistical data collection and notification of suspicious transactions are described in terms of the principles and definitions applicable to this process.
  • To adequately protect electronic money holders and/or payment service users from identified risks, including fraud and unauthorized access to confidential information and personal data, security policies should include an assessment of risks associated with activities carried out, as well as security controls and risk mitigation measures.
  • In addition to branches, agents, individuals or legal entities that will distribute and redeem electronic money for the company issuing electronic money, the structure of the company will be described. Alternatively, the company will outsource the performance of operational functions to third parties.
  • Licensing fee confirmation document.
  • Funds are available for equity (from 350,000 euros).
  • Insurance contract for professional compensation;
  • Documentary proof that client funds are stored in a client account.
  • The company structure is described in detail.
  • Detailed CVs of company owners and key executives.
  • Agreement regarding the office of the company.
  • Electronic money institutions must provide proof that their average outstanding balance is less than 900 thousand. Over the past 12 months, the payment institution has performed an average of 3 million payments.
  • The company’s operational risks are assessed through a questionnaire.
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Lithuanian EMI license for sale

Our company is always striving to find the most convenient solutions for our clients. Below you can see ready offers for existing companies with a valid EMI license. If you are looking to start your Electronic Money Institution business fast, then we would be glad to offer you various ready-made offers based on your preferences and requirements. Approximately, in just 4 weeks, you can start your operations as an EMI operator. Contact our team to find the most suitable option for your project.

Authorization process

As part of its authorization process for EMI, the Bank of Lithuania is open and begins long before an application is submitted. In order to help define the financial services that are to be licensed, our company encourages all applicants who are interested in obtaining an EMI license to contact the Company in Lithuania UAB as soon as possible. As a result, we are able to communicate with our clients in greater detail about the authorization process, the requirements of the Bank of Lithuania, and all other factors that may affect the authorization process.

The main stages of application for an EMI licence in Lithuania

  • Bank of Lithuania’s Supervisory Service receives the application for EMI license. Within five working days, the Oversight Service checks whether all necessary documents have been submitted and accepts the application if there are no deficiencies.
  • EMI will issue the license within three months of receiving the license application and attached documents.
  • A license is granted or refused. A Bank of Lithuania Board of Directors analyses the documents after they have been evaluated.

Upon reviewing the information, the Supervision Service decides whether to issue a licence or not.

First meeting with the Bank of Lithuania

In view of the fact that the representatives of the applicant company may not always be able to understand the legal acts governing the EMI licence application process, the Bank of Lithuania recommends that applicants for an EMI license apply to the Bank of Lithuania as soon as possible, and Company in Lithuania UAB will be happy to assist. Companies wishing to apply for authorization will receive more detailed information from representatives of the Bank of Lithuania.

In order to determine the type of license that is required for the project and to find out what financial services are to be provided under the project, the company must first meet with representatives of the Bank of Lithuania in order to answer all questions of interest that may arise during the application preparation. In such meetings, at least two representatives from the Bank of Lithuania’s Supervisory Service usually attend, but it may be necessary to bring in technical specialists who can evaluate the applicant’s platform or website.

A number of issues will be discussed at the preliminary meeting by the Bank of Lithuania, including:

  • Company information
  • What is the country of origin of the owners/beneficiaries of the company
  • An application’s status (platform ready, staff recruited)
  • Independent businesses and subsidiaries of groups of companies can apply
  • Conducting business is the responsibility of these individuals
  • Modelling the financing of the project
  • Product/service details, target markets, pricing policies, and regulatory actions in relation to the products/services
  • Funds remitted by EMI
  • Approximately how many employees are expected

During the first meeting with representatives of the Bank of Lithuania, this information must be provided in the form of a presentation. To ensure adequate preparation for the initial request, Company in Lithuania UAB recommends providing all of the above information in advance.

Electronic Money Institution (EMI) application fee

Before applying for an EMI license in Lithuania, a duty of 1,463 euros must be paid in the account of the State Tax Inspection.

The Electronic Money Institution’s largest market share holders:

contis
waletto
transfergo

Basic Requirements for Electronic Money Institution

It is important for the company to prepare all the requirements when applying for the license to become an Electronic Money Institution, as Bank of Lithuania requires detailed data to be provided even before the initial circulation of the electronic money. The following points should be considered in assessing the applicant company:

  • EMI activities and their supervision are regulated by legal acts; all correct data required by legal acts and additional data requested must be included in the documents submitted.
  • In order for electronic money institutions to operate legally, all documents submitted must comply with the requirements of applicable legal acts.
  • A minimum statutory capital requirement of 350,000 euros must be met by EMI according to the law on electronic money and institutions for electronic money.
  • In order to ensure the reliability and prudent management of the payment institution, ensure that it has a good reputation, and make sure the project is financially viable, it must be appropriate and appropriate that EMI and its shareholders or beneficiaries own a significant share in the charter capital and / or the right to vote.
  • E-money institutions must be headed by people with impeccable business reputations, qualified and experienced enough to properly perform their duties, and possess an impeccable professional reputation.
  • A prospective payment institution must be ready to provide financial services at the time the application is submitted, while the business plan provided must correspond to the founders’ (shareholders or beneficiaries) ability to implement it.

A comprehensive e-money management procedure appropriate to EMI’s size and complexity is required in order to ensure the prudent and prudent management of EMI. Additionally, the company should have a structure document, including a division of labour, clearly defined liabilities, a system for identifying customers, a system for monitoring risks, and its internal control rules.

Evaluation of submissions

Primary documents are verified and evaluated by Bank of Lithuania Supervisory Service specialists as part of the provision process. Their conclusions on authorization are based on a common understanding. During the evaluation process, the following processes are carried out:

  • The applicant firm should be regularly communicated with and met with (if necessary)
  • Electronic money institutions are required to remedy the deficiencies identified by the Oversight Service

The length of time it takes to examine the documents depends on how many services the applicant company intends to provide. It is easier to evaluate an electronic money license application if it does not reference all services that can be provided under the license and only a limited number of documents are submitted.

Details of the licensing process are described on the website of the Bank of Lithuania   

Currently, 214 companies have successfully obtained a licence from the Electronic Money Institution in Lithuania

Company in Lithuania UAB can help your company obtain a financial licence in Lithuania, necessary for providing services of Electronic Money Institution, and is ready to accompany your company at all stages of application. Contact us and ask your questions today.

EMI License in LithuaniaFintech is a rapidly evolving industry and attracts more and more entrepreneurs. Therefore, online banking has a promising potential. While traditional banking steps aside, businesses such as Wise, Revolut, N26, Paysera, Payoneer, Monese are growing on the market with every second.

Electronic money (e-money) institution (or EMI) is a licensed financial institution which may engage in e-money related services and payment services (as it would be described in details in the next paragraphs).

ELECTRONIC MONEY INSTITUTION

Areas of activity of an e-money institution:

  • Money transfers
  • Cash depositing and withdrawal
  • Issuing of Electronic Money
  • Issuing of payment instruments
  • Payment Initiation Service (PSD2)
  • Account Information Service (PSD2)

To establish a favourable environment for Lithuanian and foreign startups, a special project for an EMI licence to engage in restricted activities has been implemented with the aim of facilitating access of new market participants to the Lithuanian market and later, after being granted a licence to engage in usual activities, to also the European Economic Area market. The basic difference between an EMI engaged in restricted activities and a traditional EMI is that the EMI engaged in restricted activities is not subject to the minimum initial capital requirement; however, a licence of an electronic money institution to engage in restricted activities is valid solely in the Republic of Lithuania. In order to be granted an EMI licence, it is necessary to hold a capital of EUR 350,000; however, this licence entitles to the provision of the electronic money issuance and redemption, distribution and payment services in other EU Member States as well after carrying out a notification procedure.

Authorisation process

The entire authorisation process for EMIs is done through the Authorities, an application for an authorisation is submitted directly to it. The planning process is discussed in regards well before starting the activity so that the planning process can be discussed in regards. The topics that are discussed are: authorisation process, requirements, expectations, and all other major aspects that may affect the licensing process.

Stages of application:

  • Submission of an application for an EMI licence to the Supervision Service of the Authorities – within 5 business days, reviews whether all necessary documents have been submitted and have no formal deficiencies;
  • Assessment of an application for an EMI License: where the documents submitted have no deficiencies, the licence is issued within the shortest possible 3 month-term.
  • Issuance of a licence: after finishing assessment of submitted documents, the Board of the Authorities analyses summary information submitted by the Supervision Service and takes a decision regarding the issuance of a licence.

Key requirements for an EMI being established or authorised

  • The documents submitted must comply with the requirements of the legal acts regulating EMI activities and their supervision;
  • compliance with the minimum capital requirement for EMIs: according to the provisions of the Republic of Lithuania Law on Electronic Money and Electronic Money Institutions, an EMI must possess a minimum initial capital of no less than EUR 350,000
  • Entities with a qualifying holding in the EMI’s authorised capital must be able to ensure sound and prudent management of the EMI, have sufficiently high repute and be financially sound;
  • The heads of an electronic money institution must be of good repute and possess the qualification and experience necessary to properly perform their duties.
  • The operating plan must correspond to the possibilities of the EMI’s founders to implement it, while the prospective EMI must, at the time of authorisation, be prepared to provide financial services in a safe and sound manner.

Prior to applying for an EMI licence, it is necessary to pay into the account of the State Tax Inspectorate (STI) a state levy for the granting of the EMI licence. The EMI licence to engage in restricted activities is currently subject to a smaller levy.

The own funds requirement is calculated by the Supervision Service based on average outstanding electronic money. The own funds requirement of an EMI designated for issuance of electronic money must account for no less than 2% of average outstanding electronic money.

Company in Lithuania UAB can assist you obtain an EMI license, thereby ensuring a smooth start for your business. Contact us for more information.

Types of Lithuanian EMI Licences

In Lithuania, you can choose from different types of EMI licences, depending on your resources and scope of activities. This way Lithuania ensures that EMI businesses of all sizes and capabilities have a viable opportunity to provide and perfect their services by being active market participants, innovating, and safely experimenting while delivering value to real customers.

The Bank of Lithuania offers two types of EMI licences:

  • Regular EMI Licence
  • EMI Limited Activity Licence

The Regular EMI Licence is suitable for established financial institutions and larger fintech companies that plan to engage in more extensive electronic money operations. This licence allows for a broader range of services, including the issuance of electronic money and providing payment services on a larger scale. In order to obtain a Regular EMI Licence, a minimum capital of 350,000 EUR is required. This licence gives the right, after completing the notification procedures, to provide electronic money issuance and redemption, distribution, and payment services in Lithuania and other EU member states.

The EMI Limited Activity Licence has been designed to create a favourable environment for Lithuanian and foreign startups that have a relatively low volume of electronic money transactions. The primary difference between a Limited Activity EMI Licence and a standard EMI Licence lies in the fact that the former doesn’t entail a mandatory minimum initial capital requirement. However, under this license, operations are restricted to the territory of Lithuania exclusively.

Advantages of the Lithuanian EMI Licence

As just mentioned, one of the significant advantages of obtaining a Regular Lithuanian EMI Licence is the ability to passport your services throughout the EU, a single market with over 500 million consumers. Once licensed in Lithuania, you can provide electronic money and payment services in other EU member states without the need to obtain separate licences in each country. Such an approach is more time-efficient and cost-effective compared to obtaining a new licence in every new market. It also provides EMIs with the flexibility to adapt to market conditions and customer demands across the EU.

Lithuania has established a regulatory environment that’s widely recognised as supportive of fintech and financial services. The Bank of Lithuania is known for its proactive and innovative approach and streamlined licensing process which can facilitate the launch of your business and ongoing regulatory compliance. The authority is open to engaging with businesses, promptly addressing inquiries, and providing guidance to ensure a smoother regulatory experience. Its regulatory framework allows fintech companies to experiment and deploy cutting-edge technologies, cultivating an innovation-driven environment while ensuring consumer protection.

Lithuania’s EMI Limited Activity Licence makes the market considerably more accessible for startups and smaller fintech companies compared to other EMI licences and regulatory frameworks. Since there’s no minimum capital requirement, new market entrants can allocate their resources more efficiently and concentrate on product development and market growth. This approach allows for more fresh and creative solutions and therefore can lead to the potential disruption of established financial norms by presenting consumers with groundbreaking products and services.

Lithuania offers a favourable cost structure, which translates into lower operating expenses for businesses. This includes such aspects as office space rental, labour costs, utilities, and administrative overhead. The affordability of operations allows EMI companies to allocate resources more efficiently which improves profitability and financial sustainability. The country’s efficient and streamlined bureaucratic processes also contribute to cost savings by enabling easy setup and management of EMIs and reducing the need for extensive resources for navigating administrative aspects.

You’ll also be pleased to learn that Lithuania boasts one of the lowest Corporate Income Tax rates in the EU which is 15%. For your EMI, this would mean a lower tax burden on profits, enabling you to retain a more substantial portion of your earnings for reinvestment, growth, and operational expenses. The country also offers various tax incentives to promote investment and economic development. By availing of these incentives, you could further enhance your financial efficiency and allocate resources to the expansion of your services, technological improvement, or the increase of market reach.

Holding an EMI licence in Lithuania grants you access to the Single Euro Payments Area (SEPA). SEPA provides a standardised framework for payments, including credit transfers and direct debits, making cross-border transactions as simple as domestic ones. This reduces transaction costs, processing times, and operational complexity. With such consistent payment methods and standards, EMIs can attract customers from multiple countries, and this way expand their market and revenue potential.

EMI Regulations in Lithuania

In Lithuania, EMIs are predominantly regulated by a combination of national and EU legislation and regulations that are enforced by the Bank of Lithuania. This legal framework imposes a set of rules and recommendations aimed at guaranteeing the reliable functioning of EMIs and their alignment with both EU and Lithuanian legal requirements. The rules cover a wide range of aspects related to EMI activities, including licensing, prudential standards, and the safeguarding of consumer rights.

The main Lithuanian legislation and regulations governing the operations and licensing of EMIs in Lithuania:

  • Republic of Lithuania Act on Financial Institutions
  • Republic of Lithuania Law on Electronic Money and Electronic Money Institutions
  • Republic of Lithuania Law on the Prevention of Money Laundering and Terrorist Financing
  • Law of the Republic of Lithuania on Payments
  • Republic of Lithuania Law on Companies
  • Resolution No 03-83 of the Board of the Bank of Lithuania of 24 May 2018 on the approval of the regulations for the calculation of initial capital and own funds of electronic money institutions and payment institutions and the forms of the report on the calculation of initial capital and own funds of electronic money institutions (payment institutions)
  • Republic of Lithuania Law on Consumer Protection
  • The Civil Code of the Republic of Lithuania

The following EU regulations, inter alia, are also applicable:

  • The Payment Services Directive 2 (PSD2)
  • The Sixth Anti-Money Laundering Directive (AMLD6)
  • General Data Protection Regulation (GDPR)
  • Market Abuse Regulation (MAR)

Choosing Between a New EMI Licence and a Ready-Made Company with an EMI Licence in Lithuania

There are two ways of starting an EMI business in Lithuania. You can either establish a new company and apply for an EMI licence or acquire a ready-made company with an already granted EMI licence. Your choice depends on such factors as your specific business goals, time-to-market, resources, and the level of risk you’re willing to accept. Our team here at the Company in Lithuania UAB can expertly guide you through the process of decision-making by providing personalised actionable insights. However, for now, please consider the general aspects of each option.

The main aspects of obtaining a new EMI licence in Lithuania:

  • You have full control over the structure and operations of the company, and you can design it according to your specific business model and tailor it to your preferences and requirements
  • You’ll have to start the compliance process, including internal documents and procedures, from the very beginning
  • The application process is time-consuming and involves various stages, including due diligence, background checks, and meetings with regulatory authorities

The main aspects of buying a ready-made company with an EMI licence in Lithuania:

  • It’s a quicker and more convenient option, and you can start offering EMI services almost immediately since you don’t need to go through the entire licensing process
  • Such a company already is in compliance with regulatory requirements, although they should be checked according to your standards
  • Acquiring an existing EMI company usually involves higher initial costs as you’re essentially purchasing an established business entity

Key Requirements for the Lithuanian EMI Licence Applicants

To apply for an EMI licence in Lithuania, you’ll first have to register a new company in Lithuania that meets initial capital requirements and has a registered office in Lithuania. Depending on your business scope, you can choose precisely from such legal forms as a Private Limited Liability Company (UAB) or a Public Limited Liability Company (AB) (these are the only two permitted by the relevant EMI law). If your submitted application for registration is of good quality, it only takes a week to establish a company. We can help you with the preparation of documents in the Lithuanian language, as well as advise you on the most suitable business structure.

It’s of paramount importance to have all the legally required internal processes in place prior to applying for an EMI licence. It includes the implementation of such anti-money laundering and counter-financing of terrorism (AML/CFT) measures as KYC and processes for monitoring suspicious transactions. You’ll also have to thoroughly implement risk management, customer protection, and business continuity measures, and ensure that your company’s operational structure is aligned with the PSD2.

Pursuant to the PSD2, you are required to demonstrate measures in place that will safeguard your customer funds. Essentially, you’ll have to hold your customer funds in segregated accounts, separate from your company’s operational accounts. This way you’ll protect customer funds in the event of your EMI’s insolvency. Separating customer funds from operational accounts will also reduce the risk of inadvertent losses or mismanagement that could occur in the day-to-day operation of your EMI.

As an applicant for an EMI licence in Lithuania, you’ll also be required to establish robust regulatory reporting processes. This includes processes for submitting regular reports to the Bank of Lithuania, which monitors overall compliance and financial stability, and the Financial Crime Investigation Service (FNTT), which investigates and prevents financial crimes. These processes are essential to ensure that your business operates transparently, efficiently, and in compliance with the rigorous standards set by the Lithuanian regulatory authorities.

Requirements for the Buyers of a Ready-Made Company with an EMI Licence

To acquire a ready-made company with an already existing EMI licence in Lithuania, you’ll essentially have to seek approval and consent from the Bank of Lithuania for the acquisition. You will have to provide details about the proposed transaction, your background and qualifications, and the planned changes to the ownership structure. Your management team and shareholders will be required to undergo a fit and proper assessment by the authority to ensure you all meet the required standards of integrity, experience, and expertise.

Needless to say, you must have the necessary funds available to complete the acquisition. This includes the acquisition price, as well as any additional capital required to meet the ongoing capital adequacy requirements of the EMI and support its ongoing operations, compliance efforts, and growth strategies. To work out your financing strategy, you can contact our team here at the Company in Lithuania UAB which specialises in M&A transactions and can therefore help you to build a strategy that leads to sustainable success.

For now, take note of the essential requirements for your financing arrangements:

  • Your financing method must be compliant with the laws governing EMIs and financial institutions in Lithuania
  • Your financing sources and arrangements will have to be vetted for AML/CFT compliance
  • You’ll have to provide the Bank of Lithuania with a clear and transparent financing structure

Ongoing Requirements for EMI Licensees in Lithuania

Once you’re an EMI licence holder in Lithuania, you’ll be obligated to demonstrate ongoing compliance with the Lithuanian and EU regulations. These regulations are designed to ensure that EMIs continue to operate in a safe, sound, and compliant manner. They can also help you avoid risks that may cost you reputation, money, or freedom, and build trust among customers and business partners.

The key ongoing legal requirements are as follows:

  • Maintaining the minimum capital levels at all times
  • Continuous adherence to AML/CFT regulations, including staff training, monitoring of transactions, and timely reporting
  • Undergoing audits and inspections conducted by the Bank of Lithuania
  • You should keep your business plan up-to-date by regularly renewing your business model, financial projections, and operational strategies
  • Maintaining open and transparent communication with customers, addressing any concerns, complaints, or inquiries promptly
  • Maintaining good corporate governance practices and ensuring that your board and management team have the necessary skills, knowledge, and expertise to manage the EMI effectively
  • Staying informed about and complying with any new regulatory requirements which we, among everything else, can gladly help you with by providing ongoing support

If you think that Lithuania is the right European jurisdiction for your electronic money institution, our team here at the Company in Lithuania UAB can help you realise your business idea as swiftly as possible. With support from our committed legal advisors, business development professionals, and financial accountants, you’ll find the process of launching an EMI business in Lithuania straightforward, transparent, and effective. Reach out to us today to arrange a tailored consultation, where we’ll work with you to understand your specific needs and develop a custom roadmap for your business success.

Frequently asked questions

Milana Scherbakova

Licensing Services Manager

+370 661 75988 [email protected]
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