EMI license in Lithuania

According to The Fintech Landscape in Lithuania 2022-2023, by the end of 2022, there were 263 fintech companies operating in Lithuania. These figures make Lithuania the largest European hub in terms of issued licenses. Entrepreneurs choose Lithuania for registering startups due to the highly conducive conditions created here for foreign investors and the development of businesses in the electronic financial services field. The process of obtaining an EMI [Electronic Money Institution] license involves only a few key stages without complex bureaucracy.

EMI License Lithuania — Prospects for Fintech Business

In Lithuania, several types of licenses can be obtained [EMI, PI, and their small variants, Account Information Services]. Among these permissions, specifically, the EMI license allows fintech startups to provide the widest range of services:

• electronic money issuance;
• funds transfer and placement into user accounts;
• card payment operations, including using credit funds;
• cash withdrawals;
• foreign currency exchange;
• payment system management.

The Lithuanian regulator, the Central Bank, issues the EMI license on an indefinite basis. Among the advantages of this jurisdiction is that the licensee has the right to provide payment services throughout the states within the European Economic Area. Broadening the geographical scope of activities is enabled by the passporting procedure. To achieve this, the Lithuanian electronic money institution simply needs to notify regulators in other countries without additional licensing procedures.

What Services Can an Electronic Money Institution Provide?

A Lithuanian electronic money institution (EMI) offers a broad scope, including issuing electronic money and providing payment services, such as money remittance, payment transactions, direct debits, credit transfers, and cash services. The entity can arrange for the distribution and redemption of its electronic money through distributors and provide currency exchange as an additional related service.

When applying for an unrestricted EMI license in Lithuania, an EMI can combine e-money issuance and payment services under one license operating across the EU. Under a license for restricted activities, the services can be provided only in Lithuania, but it is not subject to the minimum initial capital requirement.

Procedure for Obtaining EMI Lithuania — Requirements and Documentation Package

In contrast to other European jurisdictions, obtaining a Lithuania EMI license involves fewer bureaucratic procedures. However, to successfully launch, certain requirements must be met:

• open a bank account;
• contribute the share capital [the minimum payment is €350,000];
• develop AML and KYC policies, as well as operational, business, and financial plans with forecasts for the first three financial years;
• prepare IT documentation detailing the technical solution;
• describe internal control mechanisms;
• outline the organizational structure. The company should have a head, a general assembly of shareholders, and a board. Usually, a board of directors is established, with the position of CEO as its head. The regulator does not require the creation of a supervisory board;
• provide information about employees involved in anti-money laundering and information security. They must possess relevant experience and qualifications;
• in the questionnaires of company owners and key management, include information confirming their reputation, relevant work experience, and higher education in economics, law, management, or business administration;
• confirm the legitimate source of finances and others. 

The final stage is obtaining the license.

Since 2013, SBSB experts have been assisting in the successful licensing process and launching fintech projects in Lithuania. We offer each client an individual approach based on the company’s business model.

What Documents Are Needed for the EMI Application?

In addition to a completed application form, the applicant must provide supporting documents with information about:

• the company, including legal form, registered office, and organisational structure;
• ownership with details needed for fitness and propriety assessment of shareholders;
• management, such as directors and key managers whose qualifications and reputation must be proved;
• business model with described activities and financial projections (business plan);
• financial resources, proving a capital of EUR 350 000; 
• governance with the organisational structure and decision-making arrangements;
• risk management with described procedures; 
• AML/CFT policies, etc.

The entire list for a standard EMI licence is specified in Annex 1 to the Rules on the Licensing of Electronic Money and Payment Institutions. The regulator wants not only to see the entity’s plans, but it insists that an applicant must comply with the requirements for an operating EMI.

How Does the Licensing Process Work with the Bank of Lithuania?

Applicants can contact the Bank of Lithuania to discuss their plans and define financial services that must be licensed. At such meetings, the regulator explains the authorisation process and its requirements. Basically, there are the following basic stages:

• preparation of supporting documents and the application itself;
• submission of a compliance package with the application to the Bank of Lithuania.
• a pre-check by the Bank of Lithuania that lasts for 5 business days to ensure that all required documents are included;
• an assessment of the application and attached documents;
• issuance of a license or refusal to issue a license.

If the package of documents is accurate, the license is issued within up to 3 months. In the case of an EMI license to engage in restricted activities, it takes 2 months. But the Bank of Lithuania usually asks the applicant to submit additional information, which is why the processing time is typically extended.

What Compliance Obligations Apply After Authorization?

An EMI with a license in Lithuania must meet the regulatory requirements, including the following:

• maintain appropriate own funds;
• protect customer funds;
• ensure sound governance and internal controls;
• meet AML/CFT requirements;
• accurately report to the regulator;
• handle bookkeeping and prepare financial statements;
• maintain an appropriate organisational structure and internal controls;
• mitigate operational, digital, and security risks;
• notify the regulator about changes in related issues.

A reporting calendar of the regulator requires reports to be submitted exactly within the specified periods. When EMI is sold, it cannot offer a Lithuania EMI license for sale as a standalone asset. The new owner is expected to be assessed by the regulator.

Timeline for Obtaining EMI Licence Lithuania

The Central Bank is responsible for issuing the Electronic Money Institution Lithuania. On average, the regulator reviews the submitted documents for obtaining the license within three months from the submission date. However, the review period may change if additional information is required or if discrepancies with the specified requirements are identified.

For more detailed information about Lithuanian jurisdiction and the Lithuania Electronic Money Institution, SBSB lawyers will consult you on the licensing procedure. Our experts provide clients with comprehensive turnkey legal support for a successful project launch: we analyze the risks of the business model, help register the office, develop a business plan, choose the optimal company structure, and prepare the documentation package.