Regulations for EMI license in Lithuania

Bank of Lithuania (Lietuvos Bankas), operating under the Electronic Money Institutions Law in Lithuania, serves as the principal regulatory and supervisory authority governing Electronic Money Institutions (EMIs) in the country. Its core objectives include:

  • Elevate Lithuania’s reputation as a leading fintech destination within the European Economic Area (EEA), ensuring it is perceived as a secure and credible hub for financial activities.
  • Supervise electronic money services to guarantee compliance with regulatory standards, transparency, and ensuring fairness among all market participants.
  • Enforce adherence to the Electronic Money Institutions Law and other relevant regulations, establishing and upholding high regulatory standards to maintain the integrity of the financial ecosystem.
  • Issue licenses to Electronic Money Institutions (EMIs) or Payment Institutions (PIs) and oversee their operations to ensure alignment with regulatory frameworks, while also taking firm measures, such as license revocation, when necessary, to uphold market integrity.
  • Safeguard the interests of consumers through diligent regulatory practices, enhancing the security and reliability of the EMI sector in Lithuania.

Taxation of EMI companies in Lithuania

  • Corporate Tax – 15%
  • Dividends Tax – 15%
  • VAT Tax – 21% (occurring when providing a service to local EU residents. Financial services not fall under VAT tax)

Types of EMI licensing in Lithuania

License typeDescription
EMI LicenseComprehensive financial services including issuance of electronic money, execution of payment transactions, management of electronic payment systems, and provision of operational risk management solutions
Money Remittance LicenseOffers basic payment services such as executing payment transactions, issuing and/or acquiring payment instruments, and executing credit transfers, with a primary focus on direct dealings with customers’ payment accounts.
Payment Processing LicenseIncludes all services of the limited range license plus money remittance, and the execution of payment transactions initiated via telecommunication devices, digital or IT device, suitable for businesses that engage in broader payment services.
Full Payment Institution LicenseCovers all services of the standard PI license and extends to operating payment systems, providing foreign exchange services, safekeeping activities, and the storage and processing of payment transaction data, catering to large-scale payment service providers requiring comprehensive operational capabilities.

With EMI license in Lithuania you can provide following services:

  • services enabling cash to be placed on a payment account as well as all the operations required for operating a payment account
  • services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account
  • execution of payment transactions, including transfers of funds on a payment account with the payment service provider of the payment service user or with another payment service provider: execution of direct debits, including one-off direct debits, execution of payment transactions through a payment card or a similar device and/or execution of credit transfers, including standing orders
  • execution of payment transactions where the funds are covered by a credit line for a payment service user: execution of direct debits, including one-off direct debits, execution of payment transactions through a payment card or a similar device and/or execution of credit transfers, including standing orders
  • issuing and/or acquiring of payment instruments
  • money remittance
  • execution of payment transactions where the consent of the payer to execute a payment transaction is given by means of any telecommunications terminal equipment, digital or IT device and the payment is made to the telecommunications network or IT system operator, acting only as an intermediary between the supplier of the goods or services and the payment service user
  • Account information services
  • Issuance of e-money

Overview of requirements to obtain EMI license in Lithuania

  • Incorporate the company under the Lithuanian Companies Act with no requirements for citizenship
  • Appoint a minimum of three local team members
  • Ensure the board demonstrates an impeccable reputation and understanding of the financial sector
  • Secure adequate financial standing to cover at least the initial share capital along with an additional capital reserve.
  • Establish a physical business presence in Lithuania
  • Provide a detailed and realistic business plan

Estimated time frames to obtain EMI license in Lithuania

Company formation

1-2 weeks

Documents preparation

4-12 weeks

PI / EMI license obtainment from BoL*

3-9 months

*The timeline also depends on the workload of BoL and any clarifications and queries that BoL may request in relation to the application.

Legal services for obtaining EMI license in Lithuania

Basic Package

25,000 EUR initial set up

  • Turnkey company formation
  • Legal address for 1 year
  • Corporate documents
  • Due diligence for shareholders and key directors
  • Overview of the business plan
  • Overview of financial forecasts
  • Overview of an organizational structure
  • Analysis of the internal documents
  • Applying for the license

Registration of the EMI / PI licensed company under the minimum regulatory requirements

Additional services on request

  • Preparation of individual business plan
  • Preparation of required documents for the licensing
  • Accounting services
  • Assistance in opening bank account, including segregated and safeguard accounts
  • Connection with SEPA system
  • Connection with SWIFT
  • Connection with card issuance programme
  • Apostilled corporate documents
  • Introduction to confirmed software provider
  • Legal support

Ready-Made solution

available on request

  • Registered company
  • Legal address for 1 year
  • No debts, no liabilities – clean company
  • Active license
  • Corporate documents
  • Assistance with transfer of ownership

Edgar Mironov

Head of FinTech Projects

Requirements for EMI licensing in Lithuania

List of required documents

  • Application Form: Completion and submission of the official licensing application form to the Bank of Lithuania.
  • CVs and Qualifications: Submission of detailed CVs for shareholders, board members, and team members, demonstrating their qualifications, experience, knowledge, skills, and capacity for independent duty performance. The Bank of Lithuania may conduct interviews to assess these qualifications further.
  • Operational and Organizational Structure: Comprehensive documentation establishing reliable operational procedures and an appropriate organizational structure, including detailed scrutiny checks for the Management Board members, CEO, and Head of Branch Manager.
  • Business Plan: Detailed plan including services offered, budget forecasts for the first three financial years, marketing and promotion strategies, and key market segments.
  • Activity Program: Documentation outlining the services provided and operational locations.
  • Internal Policies and Manuals: Including risk management, business continuity plans, and measures to protect electronic money holder funds.
  • AML/KYC and IT Security Policies: Detailed procedures and third-party engagements for AML/KYC processes and IT security, including data centers and cloud storage solutions.
  • Compliance with Liability Insurance: Proof of meeting liability insurance requirements.
  • IT Infrastructure and Architecture: Information on IT solutions employed, agreements with third-party IT service providers, and details on IT infrastructure.
  • Questionnaire on Operational Risks: To assess the risks associated with the operational aspects of the business.
  • Questionnaire on Information and Communication Technologies and Security Risk Management: To evaluate the risks related to IT systems and data security.
  • External Audit Partnership and Quote: Engagement with an accredited external auditor to ensure compliance and financial transparency; provision of a quote for external auditing services.

Business premises requirements

  • To obtain a EMI license in Lithuania it is necessary to establish a physical office in Lithuania for document storage and providing a working space for staff, affirming the company’s operational base in Lithuania.

Share Capital and Government Fees

  • Minimum Share Capital: For obtaining PI license in Lithuania the minimum share capital is 20 000 EUR and for obtaining full EMI license in Lithuania is 350 000 EUR. In addition, it is necessary to have extra capital reserve to ensure a capital adequacy ratio of at least 1.3 – 1.5 EUR is advisor.
  • Government Fees: The application fees for PI or EMI license in Lithuania is €1,463 under Resolution No 1458.

Bank account requirements

  • Safeguarding Account: Detailed arrangements for the establishment of a safeguarding account with an EU credit institution to manage funds separately from those of non-electronic money holders. This may include reliance on the CENTROlink system for account setup, pending final licensing approval.
  • Operational Bank Accounts: Necessary for managing daily operational expenses and transactional purposes, facilitating the processing of customer transactions through current accounts.
  • Current Account: For transactional purposes, allowing for the receipt and sending of payments related to the services offered.

Personnel Requirements

  • Management Board: Minimum of three members, with the CEO possibly being a board member.
  • Local AML and Compliance Officers: Responsible for compliance with regulatory standards and AML regulations.
  • Local Executive Director: Fluent in Lithuanian, responsible for operational management in Lithuania.
  • IT Security Officer: Can be outsourced; manages IT security measures to protect data and operational integrity.
  • Internal Audit Officer: Can be outsourced; ensures ongoing internal compliance and operational audits.
  • Local Data Protection Officer (DPO): Depending on the scale of the data processing activities and the nature of the data handled, EU GDPR may require the appointment of a Data Protection Officer (DPO) if the organization’s core activities consist of data processing operations that require regular and systematic monitoring of data subjects on a large scale.

Not sure about the number of staff you need to employ for your PI/EMI project? Contact Legalaes experts to define the right personnel structure for your business model.

Roadmap of the project

For more detailed road map of the project and commercial offer – get in touch with our Forex professional.

Edgar Mironov

Head of FinTech Projects

1

Documentation Preparation and Company Formation

The process begins with the review and preparation of company documentation, followed by the preparation of incorporation documents, engagement with a notary public and registration within the Lithuanian Companies Register.

2

Preparation of Documents for EMI License Application

Legal consultation regarding the business model and advice on organizational structure and management team are provided. This phase also involves the preparation and review of all documentation required for the EMI license application.

3

Initial Meeting with the Bank of Lithuania (BoL)

An introductory meeting with the Bank of Lithuania is organized to present the planned business model and discuss management strategies. This meeting, while not mandatory, is recommended to ensure clarity and alignment on expectations and requirements.

4

Investor's Clearance to National Security Interests

Documentation necessary for obtaining clearance related to national security interests from shareholders, UBOs, and the BoL is prepared and submitted. This stage also involves communication with state authorities, leading to the issuance of a decision.

5

Submission of the Document Set to the BoL

The complete document set is submitted to the Bank of Lithuania, accompanied by the payment of the stamp duty for license issuance. A case officer is assigned, and the application undergoes thorough assessment.

6

First Round of Q&A with the BoL

The initial round of questions and answers with the Bank of Lithuania occurs, requiring the submission of amendments and additional documentation as necessary. This includes handling direct communications with the BoL.

7

Second Round of Q&A with the BoL

Assistance is provided in preparing detailed responses to both legal and non-legal queries raised by the Bank of Lithuania during the second round of Q&A.

8

Second Meeting with the BoL

Preparation for a second meeting with the Bank of Lithuania is undertaken to discuss the application documents thoroughly and possibly conduct an interview with a General Manager.

9

Third Round of Q&A with the BoL

If additional questions remain from the BoL, a third round of Q&A follows. This stage includes providing responses to the BoL’s queries and reviewing answers to non-legal questions.

10

Receipt of the EMI License

Preparation for the launch of business activities follows the granting of the EMI license, with subsequent steps including applications for SWIFT and card issuing solutions.

Advantages of the EMI license in Lithuania

Links for legislation related to EMI business in Lithuania

Governs the issuance and operation of electronic money institutions in Lithuania.

Sets out the regulatory framework for payment services, ensuring safe and efficient payment systems.

Details measures to prevent money laundering and terrorist financing, aligning with international standards.

Describes the procedures for submitting and reviewing applications for financial market participant authorisations.

Specifies the process for granting authorizations to electronic money and payment institutions by the Bank of Lithuania.

Outlines the inspection procedures for financial market participants supervised by the Bank of Lithuania.

Provides guidelines for assessing the members of the management body and key function holders of financial market participants.

Details the requirements for internal control, risk management, and protection of funds received by electronic money and payment institutions.

Establishes regulations for the calculation of initial capital and own funds for electronic money and payment institutions.

Assists potential financial market participants in evaluating opportunities in Lithuania and understanding legislative and licensing requirements.

Lithuania EMI license regulatory body

These descriptions provide a quick overview of each act’s main purpose and its role in the regulatory landscape for obtaining EMI license in Lithuania.

FAQ about EMI license in Lithuania

1. Why choose Lithuania for setting up your PI/EMI project?

Lithuania has established itself as a dynamic financial hub for PI/EMI companies, highlighted by successes such as Revolut. It offers a clear process with regulator support throughout, connection with CENTROLINK for SEPA transactions, and EU passporting rights. Compared to other jurisdictions like the Netherlands and Sweden, Lithuania's lower maintenance fees make it an attractive locale for scaling your business quickly.

2. Who can apply for a Lithuanian PI/EMI License?

The ideal candidate for the Bank of Lithuania (BoL) would be companies that have prior licensing experience in other countries and those that utilize their own proprietary software. However, Lithuania welcomes newcomers to the sector, provided they have the necessary certifications/education and maintain an impeccable reputation. The Newcomer programme assists potential licensees in evaluating their business models and making necessary adjustments before the formal licensing process.

3. How long does it take to get licensed by the BoL?

The licensing process for a PI can take about 5-8 months, depending on the completeness of your application and your commitment to the process. The process for obtaining an EMI license is more comprehensive, typically requiring 8-14 months to secure approval from the Bank of Lithuania to begin operations.

4. I have a license in another country; would it be useful?

Yes, holding a license in other markets is beneficial as it demonstrates compliance with high regulatory standards. Such credentials enhance your reliability, potentially expediting the new application process in Lithuania. Pursuing a Lithuanian license can be strategically beneficial for achieving EU passporting or connecting to SEPA.

5. Should I establish an office in Lithuania?

Yes, establishing a local office in Lithuania is crucial. It acts as a secure site for storing documentation and provides a workspace for your staff, fulfilling regulatory compliance requirements. It’s also necessary to have a head of branch present in the office at all times for potential audits or inspections by regulators.

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