EMI license in
Latvia
Latvia can be an effective EU entry point for fintech and digital banking companies that require EMI (Electronic Money Institution) or PI (Payment Institution) authorisation. Latvijas Banka approves programmes of operation for e-money issuers, payment account service providers, SEPA payment initiators, as well as providers of card- and wallet-based product offerings.
International financial institutions are attracted to Latvia due to its ability to offer both EU authorisation and access to European payment infrastructure, alongside a regulator that has experience with modern fintech models. Depending on the specific requirements of the institution, it should also be possible to use the local EKS payment system to efficiently process euro-denominated payment flows and connect to SEPA networks using appropriate banking and technology solutions.
This page explains how EMI and PI licensing works in Latvia, what services can be covered, what the main requirements are, and how Legalaes supports clients from structuring and application preparation to operational launch.
Regulations for an EMI License in Latvia
Latvijas Banka, the Bank of Latvia, is responsible for licensing and supervising Electronic Money Institutions and Payment Institutions in Latvia. Before an EMI or PI authorisation is granted, the regulator reviews the substance of the applicant. This includes governance, capital, safeguarding, AML/CTF, ICT and security, and
whether the institution can operate without creating material risk for clients or the payment system.
After authorisation, the institution remains under Latvijas Banka supervision. Reporting, audits, material business changes and supervisory reviews continue after the licence is granted.
The Latvian framework is based on the wider EU regime for payment services and electronic money. This brings PSD2, EMD2, strong customer authentication, secure communication standards, EBA guidance and Latvian implementing rules into the licensing assessment.
Licensing requirements:
To obtain an EMI or PI licence in Latvia, the applicant needs to file a complete authorisation package with Latvijas Banka. The file normally includes the programme of operations, business plan, financial forecasts, governance documents, AML/CTF policies, safeguarding arrangements, ICT and security materials, outsourcing information, and fit-and-proper documentation for shareholders, board members and key function holders.
The content of the package will vary from one application to another. An EMI file will normally be broader than a PI file, because it may involve electronic money issuance and client funds held under a safeguarding model. A PI file can be lighter, although Latvijas Banka will still expect to see the operating model, capital position, governance structure and compliance arrangements in enough detail.
The application has to demonstrate the institution’s operating logic, not only the list of services requested. This becomes especially important where the model includes payment accounts, SEPA payment flows, card programmes, merchant services, outsourcing or cross-border operations.
Ongoing Compliance:
After authorisation, the institution remains under ongoing supervision by Latvijas Banka. It must continue to maintain sufficient own funds, safeguarding arrangements, AML/CTF controls, ICT and security measures, outsourcing oversight, reporting processes and internal
governance.
The authorised structure must also remain properly staffed. This means the main operating and control areas should continue to be covered, including management, AML/CTF compliance, risk, ICT/security, finance and internal control. The balance between internal staff and outsourced support will depend on the scale and operating model of the institution.
Material changes to ownership, management, business model, outsourcing, safeguarding, key function holders or authorised services may need to be notified to Latvijas Banka.
The licence should be built around a structure that can continue to operate under supervision, not only pass the initial application review.
Recent Developments:
Latvia is becoming more visible as an EU jurisdiction for fintech, payments and digital finance projects. The country has been improving its licensing materials, payment infrastructure and early engagement options for applicants considering regulated payment services from Latvia.
The EMI and PI process is still a full authorisation process. Applicants need a credible business model, suitable governance and a complete regulatory file. The commercial value is that Latvia is developing this market without moving outside the EU supervisory framework.
Banking regulation moved in the same direction. From 6 January 2026, the entry threshold for new specialised credit institution applicants changed from EUR 5 million to EUR 1 million.
Types of Payment Authorisations in Latvia
| Payment type | Description |
|---|---|
| Electronic Money Institution (EMI) | Full permission to issue electronic money and perform the broad set of payment services (IBANs, SEPA credit transfers/direct debits, cards issuing/acquiring, merchant services, currency exchange ancillary to payments), plus safeguarding of client funds. |
| Standard Payment Institution (PI) | Permission to provide payment services under PSD2 (e.g., account services, credit transfers, card-based payments, money remittance, PIS/AIS as applicable) without issuing e-money. Initial capital depends on the services offered (see capital table below). |
| Limited Payment Institution (Domestic scope) | A local-only PI regime for selected payment services within Latvia, subject to volume caps and simplified requirements appropriate to smaller operators (authorised by Latvijas Banka). |
Services Allowed Under an EMI License
An EMI licence is usually selected where the business needs to issue electronic money or hold customer balances as part of a payment product. The exact service scope is not automatic. It has to be described in the programme of operations and approved by Latvijas Banka.
- Issuance of electronic money and maintenance of e-wallet balances
- Payment account services, including IBAN-based accounts
- SEPA payments, card-based payments, direct debits and standing orders
- Issuing or acquiring of payment instruments, including payment cards
- Money remittance, merchant services, pay-ins and payouts
- Currency conversion linked to the provision of payment services
- Payment initiation or account information services, if they are included in the authorised
scope
Services Allowed Under a Payment Institution (PI) License
A PI licence is used for payment models that do not involve issuing electronic money. It can fit merchant acquiring, remittance, account services, open banking and other non-EMI payment activity.
- Payment account services, where authorised
- Execution of payments, including credit transfers, direct debits and card-based payments
- Merchant acquiring, settlement processing and payouts
- Money remittance
- Payment-related currency conversion
- Payment initiation services
- Account information services
- Other payment services approved by Latvijas Banka
Overview of Requirements to Obtain an EMI/PI License in Latvia
An EMI or PI application in Latvia must show that the company is ready to operate as a supervised payment or e-money institution. Latvijas Banka reviews the applicant’s ownership, management, capital, safeguarding model, internal controls and planned services.
Main requirements:
- Latvian company structure suitable for authorisation by Latvijas Banka
- Clear ownership and UBO structure, including source of funds for initial capital
- Suitable management team with relevant experience and good repute
- Fit-and-proper materials for management, key function holders and qualifying
shareholders - Minimum initial capital depending on the authorisation type and services requested:
EUR 350,000 for EMI; EUR 125,000, EUR 50,000 or EUR 20,000 for PI. - Programme of operations and business plan covering at least the first three financial
years - Safeguarding model for client funds, including segregation and reconciliation
arrangements - AML/CTF, governance, ICT/security, outsourcing and business continuity framework
- Local governance, records access and reporting arrangements for supervisory
purposes
Additional requirements:
- Payment infrastructure arrangements, including SEPA, EKS, card issuing or acquiring setup, where relevant to the model
- Outsourcing governance for ICT, compliance, customer support, processing or other key functions
- Passporting, agent, branch or distributor arrangements, where services are planned
outside Latvia or through third parties
Estimated time frames
Company formation
1-2 weeks
Documents preparation
6-12 weeks
Regulatory review and clarifications
3-6 months
*The timeline also depends on the workload of Latvijas Banka and any clarifications and queries that Latvijas Banka may request in relation to the application.
Legal Services for obtaining EMI/PI license in Latvia
Licensing Strategy & Application Support
for companies entering the Latvian market
- Incorporation of a Latvian company
- Initial review of EMI / PI licence scope
- Shareholder, director and UBO screening
- Governance and organisational structure review
- Review of business plan, forecasts and IT materials
- Review of client-prepared policies and internal documentation
- Preparation and coordination of application file
- Representation during the licensing process
Regulatory & Documentation Build-Out
for full EMI/PI application readiness
- Business plan and programme of operations support
- AML/CTF and internal policy documentation
- Governance, risk and outsourcing framework
- Safeguarding and client funds documentation
- ICT/security and operational resilience materials
- Key personnel structuring and candidate coordination
- Banking infrastructure and software provider coordination
- Regulatory forms, annexes and Latvijas Banka review support
Ready-to-Operate EMI / PI Company
or clients seeking an approved Latvian EMI / PI structure
- Already authorised Latvian EMI / PI company
- Corporate ownership transfer support
- Governance and key personnel transition
- Safeguarding and operational account review
- Banking and payment infrastructure coordination
- Software and service provider alignment
- Latvijas Banka notification and supervisory coordination
- Go-live support after transfer
Detailed
Jegor Kupratsevits
Head of Fintech
Detailed Requirements for EMI/PI Licensing in Latvia
List of Required Documents
- Application forms and ownership documents: Application forms, controller declarations, shareholder structure, UBO information and supporting documents for qualifying shareholders.
- Management and fit-and-proper materials: CVs, diplomas, references, police clearance certificates where requested, and fit- and-proper files for board members, management and key function holders.
- Business model and financial documents: Programme of operations, business plan, customer journey description, product and geography matrix, three-year financial forecasts, own funds rationale and capital planning.
- Safeguarding and client funds documents: Safeguarding policy, description of client fund flows, reconciliation procedures, segregation controls and evidence of safeguarding arrangements with an EU credit institution.
- AML/CTF and internal control documents: AML/CTF risk assessment, customer due diligence procedures, sanctions and PEP screening, transaction monitoring, suspicious activity reporting process, training materials and internal control procedures.
- ICT, security and outsourcing documents: ICT architecture, hosting and data location, access control, backup and recovery setup, incident response, business continuity, outsourcing register, provider due diligence and exit arrangements.
- Governance and operational policies: Governance, risk, complaints, conduct, conflicts of interest, remuneration, recordkeeping, internal reporting and regulatory communication procedures.
Business premises requirements
- The applicant should have an operational presence in Latvia that supports management, regulatory communication and access to company records.
- After authorisation, the institution should remain reachable for supervisory purposes. Responsible persons should be available for management decisions, recordkeeping, inspections where required and supervisory requests.
Share capital & government fees
- EMI: EUR 350,000, paid in before the authorisation decision.
- PI: EUR 125,000 / EUR 50,000 / EUR 20,000, depending on the services included in the application.
Latvijas Banka may review the capital level against the applicant’s business model, projected transaction volumes, risk profile and operating scale. In some cases, the regulator may expect capital above the statutory minimum.
Application and ongoing supervision fees apply under the Latvijas Banka fee schedule. The exact amount should be checked at the time of filing.
Bank account requirements
- Safeguarding account: dedicated account with an EU credit institution or another eligible arrangement for client funds. Segregation, reconciliation and payout controls should be in place.
- Operational accounts: used for company expenses, payroll, tax payments and ordinary operating costs. They should be kept separate from safeguarded client funds.
- Payment and settlement accounts: used for payment flows and settlement activity. Depending on the model, this may include SEPA/EKS access, SWIFT payments, card settlement or merchant payouts.
Personnel Requirements
- Management board: At least two suitably qualified persons should effectively direct the institution. The board should show relevant payments, e-money, banking, risk, compliance or operational experience.
- Local management substance: The institution should have a credible Latvian management setup, with responsible persons available for supervision, decision-making and regulatory communication.
- AML/CTF compliance: A responsible AML/CTF person must cover customer due diligence, transaction monitoring, sanctions controls and regulatory reporting.
- Risk and internal control: Risk management and internal control functions should match the scale, services and risk profile of the institution.
- ICT/security responsibility: A designated person or function should oversee ICT controls, cybersecurity, incident handling, outsourcing and operational resilience.
- Finance and reporting: Accounting, regulatory reporting, own funds monitoring and financial controls should be clearly assigned.
- Outsourced functions: Some roles may be outsourced or covered part-time, but the institution must retain oversight and accountability.
Unsure what level of local staffing your EMI or PI model requires? Legalaes fintech team can review the structure and confirm the likely personnel setup before the application is prepared.
Roadmap to an EMI/PI License in Latvia
Jegor Kupratsevits
Head of Fintech
Business model analysis and licence route confirmation
The process starts with analysing the proposed payment or e-money model and deciding whether the EMI or PI route is the right one. At this point, the intended services, customer flows, payment infrastructure, target markets, safeguarding approach, capital position and staffing needs are reviewed together. The aim is to avoid choosing an authorisation route before the operating model is clear.
Latvian company setup and governance structuring
Once the route is confirmed, the Latvian company structure is put in place. This includes company registration, ownership setup, governance planning, operational presence arrangements and preliminary screening of shareholders, directors and UBOs. The project should also identify who will effectively direct the institution and which parts of the
operating model may be outsourced.
Preparation of the business plan and licensing file
The core licensing file is then prepared. This will usually include the programme of operations, business plan, financial forecasts, ownership materials, fit-and-proper files, safeguarding description, AML/CTF framework, ICT/security documentation and outsourcing materials. The file should follow the actual business model, as a payment account project, card programme, merchant acquiring model and remittance model will not require the same documentation or setup.
Initial discussion with Latvijas Banka
Before formal submission, the applicant may approach Latvijas Banka to discuss the planned activity and the intended regulatory route. This meeting can indicate whether the file is ready for submission. If there are gaps, Any comments received at this stage can then be processed before submission, and the required changes can be made to the licensing file.
Operational setup before submission
Before the application is filed, the project should already be moving towards operational readiness. This usually means work on safeguarding and operational accounts, payment infrastructure, software providers, key personnel, accounting setup and reporting arrangements. Latvijas Banka will want to see that the services described in the programme
of operations can actually be delivered.
Formal application submission and regulatory review
When the licensing file is complete, the application is submitted to Latvijas Banka. The regulator first checks whether the application is complete. The file then moves into substantive review. At that stage, the appointed case team may ask questions, request additional documents, arrange meetings with the applicant’s representatives or require
updates to parts of the file.
Regulatory decision and final implementation
After the review process is completed, the regulatory decision is received. Where the application is approved, the institution then moves into final implementation under the approved model. This may include banking arrangements, reporting setup, operational testing, provider onboarding and internal go-live preparation. After launch, the institution
operates under ongoing supervision.
Estimated Timeframes to Obtain an EMI / PI Licence in Latvia
An EMI or PI licensing project in Latvia usually takes around 6–9 months from the start of preparation to the licensing decision. The timeline may vary depending on the route chosen, the business model, the quality of the file, availability of key people, safeguarding setup and the number of clarification rounds with Latvijas Banka.
1. Preparation & Company Setup
Time Frame: 8-12 weeks
- Confirmation of the EMI or PI route, the services to be covered, minimum capital position and expected regulatory perimeter.
- Latvian company setup, ownership structure and first governance planning. Initial screening of shareholders, directors and UBOs.
- Preparation of the business plan, programme of operations, three-year financial forecasts and fit-and-proper materials.
- AML/CTF, safeguarding, ICT/security, outsourcing and internal governance documentation.
2. Filing and completeness review
Time Frame: 2-4 weeks
- Final check of the application package, supporting documents and Latvijas Banka forms before filing.
- Payment of the applicable regulator fees and submission of the application to Latvijas Banka.
- Completeness review by Latvijas Banka.
- Correction of missing or incomplete items, if the regulator identifies gaps.
- Confirmation that the file can move to substantive regulatory assessment.
3. Substantive assessment and clarification rounds
Time Frame: 3–5 months
- Review of the ownership structure, source-of-funds materials, governance, capital, financial projections and key persons.
- Assessment of safeguarding, client fund flows, AML/CTF, ICT/security, outsourcing and operational readiness.
- Written questions, clarification rounds, document updates and meetings with Latvijas Banka where required.
- Refinement of controls, reporting arrangements, staffing structure or infrastructure following supervisory comments. adjustments to controls, reporting templates, or banking arrangements.
4. Regulatory decision and pre-launch steps
Time Frame: 4–6 weeks
- Completion of the regulatory assessment and receipt of the Latvijas Banka decision.
- Entry into the relevant public register.
- Setup of reporting access for supervisory communication.
- Final safeguarding, banking, payment infrastructure and provider confirmations.
- Internal readiness checks before launch and transition into ongoing supervision
Tips to Reduce Delays
A quicker review usually starts with a complete first submission. The business plan, policies, forecasts, safeguarding model and ICT materials should all describe the same operating model.
The people named in the application should also be ready for the review. Board members, compliance officers and other key persons may be asked to explain parts of the file or provide additional information.
Banking, safeguarding, outsourcing and software provider arrangements should be started early. If these points are still open during the review, the file may need to be updated later.
Advantages of an EMI/PI License in Latvia
01
EU Market Access Through Passporting
A Latvian EMI or PI authorisation can support payment services across the EEA through the
EU passporting process. This allows the institution to scale beyond Latvia without applying for a separate licence in each member state, provided the services remain within the approved scope.
02
Clear EU Regulatory Framework
Latvia applies the EU payment services and electronic money framework through local
supervision by Latvijas Banka. The regime is based on PSD2, EMD2, safeguarding, AML/CTF, ICT and governance expectations that are familiar across the EU.
03
Broad Payment and E-Money Capabilities
An EMI licence can cover electronic money issuance, payment accounts, SEPA payments, card-related services, merchant services and money remittance, where included in the programme of operations. A PI licence can support payment service models that do not require e-money issuance.
04
Access to European Payment Infrastructure
Depending on the institution’s banking and technical setup, Latvia can provide access to European payment infrastructure, including SEPA and the local EKS system. This is useful for euro payment flows, account-based services, merchant payments and settlement models.
05
Route to Practical Fintech and Payment Models
Latvia has become more attractive for fintech, payments and digital finance projects that need a regulated EU base. This may be especially useful where the project needs EU authorisation and a jurisdiction that is already familiar with newer payment structures.
06
Strong ICT and Security Baseline
Latvia’s corporate tax system may support reinvestment during the growth stage, as retained profits are generally not taxed until distribution. This allows companies to use earnings for technology, compliance, staffing and market development before dividend extraction.
Key Legal Resources
Core Latvian law governing payment institutions and electronic money institutions, including authorisation, safeguarding, governance, reporting and supervision.
Official Latvijas Banka licensing page for full EMI authorisation. It explains the authorisation process, application stages, required documents, fees and supervision process.
Official Latvijas Banka licensing page for full PI authorisation. It explains the route for payment institution licensing under the Law on Payment Services and Electronic Money.
Official Latvijas Banka page for the registered / limited payment institution route. This is relevant for narrower Latvia-focused payment activity where full PI authorisation is not required.
EU payment services framework covering payment institutions, payment services, payment initiation, account information services, transparency and security requirements
EU framework for electronic money institutions, including electronic money issuance, initial capital and the taking up and pursuit of EMI activity.
Technical standards under PSD2 covering strong customer authentication and common secure communication requirements for payment service providers.
EU digital operational resilience framework relevant to ICT risk, incident management, third-party technology risk and operational resilience for financial entities.
National AML/CTF framework governing customer due diligence, risk assessment,
monitoring, reporting and sanctions-related controls for obliged entities.
Taxation of EMI/PI Companies in Latvia
Latvia is commercially attractive for EMI and PI structures because corporate income tax is generally linked to profit distribution rather than retained earnings. This can make the jurisdiction useful for regulated payment companies that want to reinvest profits into technology, compliance, staffing and market expansion before dividend payments are made.
Corporate Income Tax (CIT)
Corporate Income Tax (CIT)
- Undistributed profits: 0% corporate income tax while profits are retained in the company.
- Distributed profits are taxed at company level under Latvia’s 20/80 corporate income tax model.
Dividends & Withholding Tax
Dividends & Withholding Tax
- Dividends paid to non-resident shareholders are generally not subject to Latvian withholding tax.
- Payments to persons in low-tax or non-cooperative jurisdictions may be subject to 20% withholding tax.
- Where cross-border ownership is involved, the applicable double tax treaty should also be checked against the shareholder jurisdiction.
Payroll for Local Management and Staff
Payroll for Local Management and Staff
- Latvia applies progressive personal income tax rates to employment income. For 2026, the main personal income tax rates are 25.5% and 33%, with an additional 3% rate for income above EUR 200,000.
- The standard mandatory social insurance burden is 34.09%, split between 23.59% employer and 10.5% employee.
VAT on EMI/PI Services
VAT on EMI/PI Services
- Latvia’s standard VAT rate is 21%.
- For a typical EMI or PI, core payment service revenue will often be treated under the financial services VAT exemption. The VAT position should still be checked against the actual revenue streams of the company.
- Revenue outside the regulated financial scope should be reviewed separately for VAT purposes.
Accounting and Tax Compliance
Accounting and Tax Compliance
- EMI / PI companies should maintain full Latvian corporate accounting and annual tax compliance.
- Payroll compliance is needed where local staff are employed in Latvia.
- Related-party services, shared group costs and cross-border support arrangements should be documented for transfer pricing purposes.
- Tax, accounting and regulatory reporting should be aligned before authorisation, especially where the company will have local staff, outsourced functions or cross-border group arrangements.
FAQ – EMI/PI License in Latvia
Who is the regulator?
Latvijas Banka licenses and supervises EMIs and PIs in Latvia, publishes rulebooks/templates, and maintains public registers.
What initial capital is required?
EMI: EUR 350,000 (fully paid). PI: EUR 125,000 / 50,000 / 20,000 depending on services (and PII for AIS-only).
Do I need a Latvian office?
Yes—regulatory correspondence, record-keeping, access for inspections, and operational oversight are expected locally.
Can foreign founders apply?
Yes. There is no nationality restriction for shareholders/UBOs. Fit-and-proper and governance standards apply to all controllers and key function holders.
What about safeguarding?
Client funds must be safeguarded with an EU credit institution and reconciled daily. Policies, reconciliations and audit trails are reviewed at authorisation and on-site inspections.
Are outsourcing and cloud allowed?
Yes—under EBA Outsourcing Guidelines with robust governance, risk and exit strategies; critical functions demand heightened oversight.
How long does licensing take?
Typical projects complete in ~6–9 months from kick-off, depending on model complexity, file quality and responsiveness during Q&A. (See timeframes above.)
Can we add card issuing and acquiring?
Yes. EMIs commonly integrate via BIN sponsors (Visa/Mastercard) and connect to SEPA/EKS for account-to-account payments.
What languages are accepted?
Latvian is official, but Latvijas Banka works with English documentation widely; sworn translations may be required for certain acts.
What ongoing reporting is required?
Periodic prudential/operational reports, safeguarding reconciliations, ICT incident notificication
Each of our projects receives unique and tailored solutions in accordance with the initial objectives and vision of the shareholders.
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