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EMI payment license in Lithuania

EMI payment license in Lithuania.

Successful business in the FinTech sector is possible only if working in the legal field. It’s essential to correctly select a jurisdiction to launch a project connected with the provision of payment services. Today, Lithuania is one of the best options for fintech startups that are planning to carry out electronic money transactions. The popularity of the jurisdiction is easily explained: short enough terms of licensing and the absence of complicated bureaucratic procedures. In the new material, we will discuss how to obtain an EMI license in Lithuania

Electronic Money Issuer Licensing 

The following types of licenses are available on Lithuania:

  • Electronic Money Institution, EMI;
  • Payment Service Providers, PSP;
  • limited versions of EMI and PI;
  • license for Account Information Services.

EMI and PI licenses provide similar payment services with a single difference: EMI enables the provision of electronic money, and PI does not. Correspondingly, the EMI license in Lithuania offers clients a possibility to store money for long-term use, and PI for no more than 24 hours. 

How to obtain EMI license in Lithuania: registration, requirements, period for consideration of documents

EMI licenses are issued by a supervisory authority for an indefinite term.  The Law of the Republic of Lithuania «On Payments» contains the description of payment services that can be provided by licensees:  

  • Money deposit on bank accounts, as well as operations required for their functioning;
  • Money withdrawal;
  • Payment transactions: money transfers to the checking account of a payment service user from a payment service provider or with another payment service supplier (debits, including one-time debit, payment transactions made with a payment card or similar device and/or credit transfers, including standing orders);
  • Payment transactions with funds covered by the credit line of the payment service user (debits (including one-time debit)), as well as payment transactions made with a payment card or similar device and/or credit transfers, including standing orders;
  • Payment instrument issuing or acquiring;
  • Money transfer;
  • Payment initiation service;
  • Payment transactions carried out with the help of special equipment (telecommunication, digital or informational);
  • Separate service for the provision of the information on payment accounts.

Electronic money institution has thus the right to:

  • issue electronic money;
  • provide credits connected with the payment of services stated in the Law of the Republic of Lithuania «On Payments»;
  • provide additional services (the electronic money issuance and (or) the provision of such payment services as currency exchange, storage of funds, data storage and processing);
  • payment systems management;
  • other activity if it is provided by current legal acts.

The EMI license in Lithuania enables the provision of payment services throughout the European Union, since the certification procedure offers a chance to expand the scope of the license by notifying local regulators in other EEA countries.  

Share capital requirements for EMI licensing in Lithuania 

The Lithuanian legislation provides the size of minimum share capital for certain types of companies applying for licensing. The Law of the Republic of Lithuania «On Electronic Money and Electronic Money Institutions» sets a minimum Initial capital for electronic money institutions of no less than €350,000. Share capital must contain:

  • paid share capital (reduced by personal purchased shares);
  • reserve capital;
  • undistributed reserve fund (emission income) minus the sum connected with the issuance of privileged shares;
  • main reserves and reserve capital;
  • loss or retained earnings (immediately after the deduction of intermediate retained earnings of the current year and undisputed income of the last current year before the decision was taken by the annual meeting of the shareholders, provided that the audit firm has not provided the audit of a complex financial reporting for the requested period yet, and the information confirming that the profit amount is correct, and all taxes are paid has not been provided to the controlled body);
  • other reserves.

The detailed information on the requirements for share capital to obtain a PSP license in Lithuania can be found via this link.

Requirements for administrations and Controlled commission of EMI institutions

Similar financial institutions may have various organizational structure. If the company plans to have one director, such authorities are required: CEO, general meeting of shareholders, board, and Controlled Commission. As a rule, a board of directors is created and the post of CEO as its head is established. Controlled commission is not mandatory.

The Lithuanian legislation provides strict rules regarding company founders applying for the license. They must meet several criteria:

  • impeccable reputation, appropriate higher education in such fields as law, management, business administration and relevant work experience;
  • ability to ensure strong management over a payment institution in accordance with the prudential norms (mandatory requirements provided by the regulator  — Bank of Lithuania, thus ensuring the liquidity, solvency, reliability of a financial institution, protection of shareholders and investors);
  • financial trust (money origin must be confirmed).

Similar requirements regarding appropriate education are set for members of the Council, the head of the institution, heads of structural units and heads of branches established in other EU states. 

Please note that the chances to obtain the permission drop if the post of CEO is occupied by a candidate who does not meet the abovementioned conditions, even if he has enough qualification and experience. 

The term of consideration of documents and EMI in Lithuania 

The EMI licensing term is 3 months after filing the documents to the Central Bank. 

If any deficiencies are identified (form or content of the documents), the term of consideration changes. If so, the regulator has the right to request the missing data, correct the form or make adjustments. In this case, the term of consideration is extended and will be counted from the date when the last versions were filed. 

Requirements for the office for EMI institution

A real company office is required to obtain an EMI license in Lithuania

The cost of our services for EMI licenses 

The cost of the “turnkey” services provided by SBSB is from €40,000–45,000. The final sum depends on a range of additional services. Recruitment and searching for an office are paid separately.  

Opening a banking account

A banking account is to be opened after the company registration. Current Lithuanian legislation does not mention the account jurisdiction, and the SBSB lawyers recommend opening it in a bank with Lithuanian registration. Not only does it increase the regulator’s trust when making positive decision on licensing, but also is a kind of guarantee that money will not be withdrawn from Lithuania. 

Contact our specialists to get detailed information on the EMI license in Lithuania or other jurisdictions. The SBSB Lawyers offer individual solutions, considering individual preferences. We assist with registering a company, ensuring complete legal support after the project launch.