EMI&PSP in Lithuania

ELECTRONIC MONEY and PAYMENT PROVIDERS IN LITHUANIA

Issuing of electronic money is quite competitive activity in the financial sector of the economy.

In this aspect the Lithuanian legislationisinteresting, it provides the possibility of obtaining a special type of license for financial companies – a license for the institution of electronic money.

For possibility of obtaining a license, an enterprise in the form of a public joint stock company (with a minimum registered capital of 40,000 EUR, the possibility of a public offering of shares) or a limited liability company (minimum share capital of 2 500 EUR) must be established.

Peculiarities of EMI license in Lithuania. Territory covered

The license for electronic money institution in Lithuania is issued for an indefinite term. This license is issued by the supervisory authority, it gives the right to issue electronic money and to provide services under the Law of the Republic of Lithuania “On payments.”

This article describes the concept of payment services, including a list of them:

1. Services in placing funds on current accounts, as well as the operations required for the functioning of such account
2. Services enabling cash withdrawals from Current Account
3. Execution of payment transactions, including transfer of funds to the account of the payment service user at the payment service provider to another payment service provider: debit cancellation, including a one-time debit cancellation, execution of payment transactions through a payment card or similar device and / or the execution of credit transfers, including orders for regular payments
4. Execution of payment transactions, for which funds are covered by a credit lineof service user of payment services: debit cancellation, including a one-time debit cancellation, execution of payment transactions through a payment card or similar device and / or the execution of credit transfers, including orders for regular payments
5. Issue or acquiring of payment instruments
6. Money transfer
7. Execution of payment transactions, in which the payer’s agreement to execute the payment transaction is given by means of any telecommunication terminal equipment, digital or IT device and the payment is made in the telecommunications network or IT system operator, acting only as an intermediary between the supplier of goods or services, and the payment service user

Thus, the electronic money institution shall be entitled to:

1. Provide credit related to payment services, identified in the Lithuania Law “On payments”
2. Provide additional services that are closely associated with the issuance of electronic money and (or) the provision of payment services, such as foreign currency exchange, the activity of storage, accumulation and processing of data
3. Management of payment systems
4. In accordance with the procedure established by legislation, to engage in other activities, except for issuance of electronic money

Electronic money institution cannot carry out activities on the adoption of deposits or other repayable funds from non-professional market participants.

Requirements for the authorized capital

Despite the fact that the Lithuanian legislation provides the size of the minimum capital requirement for certain types of companies, all the same for enterprises wishing to obtain a license, according to the Law of the Republic of Lithuania “On Electronic Money and Electronic Money Institutions”, set a mandatory requirement for the formation of its own share capital of no less than 350,000 EUR.

At the same time, the share capital must consist of the following components:

1. Issued share capital (reduced by own shares bought up);
2. The reserve capital;
3. Non-distributable reserve fund (share premium), net of the amounts related to the issue of preference shares;
4. The main reserves or reserve capital;
5. Retained earnings (immediately after subtracting interim retained earnings of the current year and retained earnings of the last year, in which there was no decision at the annual meeting of shareholders, on the condition that audit firm has not yet provided a comprehensive audit of the financial statements for the period requested, and to the supervisory authority has not provided information confirming that the amount of profit is defined correctly and all taxes have been paid) or loss;
6. Other reserves.

During the whole period the company’s authorized capital shall not be less than 350,0000 EUR.

REQUIREMENTS for management bodies

The institution of electronic money must establish the following controls: the general meeting of shareholders; head of the company.

Board and Control Commission

The founders of the company, which claim to consideration of the license must comply with such criterias:

1. The ability to provide reliable control of the paying agency on the basis of prudential norms (mandatory requirements established by the central regulator (Bank of Lithuania), under which will be provided by the liquidity, paying capacity, reliability of financial institutions, the protection of shareholders and depositors will be provided);
2. Impeccable reputation;
3. Financial Trust (to shareholders by the central controller should be unconditional trust, there should be no doubt about the origin of funds).

At least two members of Council must have a university degree in law, management, business administration or economics, or must have experience in these areas no less than 1 year during the last 5 years.

Head of e-money institutions must be in good standing and have the skills and experience necessary for the proper performance of their duties. In addition, the chief also should have higher education in law, management, business administration or economics.

The heads of the structural divisions of the institutions are responsible for the provision of payment services, in the case where the Payment institution provides payment services and at the same time engaged in other activities, as well as heads of branches established in another EU country should also have a higher education in law, management, business administration or economics and have experience at least 1 year during the last 5 years in the financial institutions in the area related to the provision of financial services.

However, it should be noted that if the candidate does not comply with (above) requirements, but he has the appropriate qualifications and experience, he can also be appointed as manager. But the chances of obtaining a license are reduced.

The term of consideration of documents and obtaining a license

The submitted documents will be considered by the Central Bank of Lithuania no more than 3 months from the date of filing. The decision to issue a license for electronic money institution will be made after consideration of the above documents within the same 3 months.

In case when there will be identified any imperfections in the documents regarding the form of the document, as well as in their content, the controlling authority will request for the missing information or corrected form according to regulatory requirements. In this case, considering period (3 months) will count from the date when the last documents were filed.

Office requirements

The obligatory requirement is the presence of a physical office in Lithuania.

Cost of our services

Cost of services to obtain a license of electronic money in Lithuania 16 500 EUR

It does not include the services of personnel selection and taxes.

Bank account

The bank account of the financial company can be opened in any bank in any jurisdiction. The legislation contains no requirements for the jurisdiction of the company’s account. 

However, we would recommend openingthe first account in one of the banks registered in Lithuania.

This will give more confidence to the Regulator when deciding whether to issue a license, as the regulator will not have suspicion that the funds will be fully withdrawn from Lithuania.

If you need any help in obtaining a license for electronic money, please feel free to contact our specialists via phone numbers, listed on a web-page, or by submitting a form, located on the left side of the page or by the e-mail info@sb-sb.com

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