Emi license in Lithuania
Lithuania EMI license (Electronic Money Institution)
EMI license in Lithuania is a profitable tool, increasing the prospects of your business’s growth and development. Gofaizen&Sherle specialists provide a full company set up with all the necessary infrastructure, and support at every stage and the result is a Lithuanian EMI license.
Every company engaged in issuing electronic currency in Lithuania must obtain an EMI license to legally operate in this jurisdiction. Having a license will allow offline/online payments, providing sub-accounts within a bank account, creating electronic wallets, providing individual IBANs, and transferring money to foreign accounts.
Holders of a Lithuanian license are allowed to provide the above services in the European Economic Area (EEA) without having to obtain an additional license in another EEA state. This license is passported for these activities, which allows you to work in other states. In addition, an entrepreneur may obtain a limited EMI license and provide its services only in Lithuania. In this case, certain restrictions may apply to the company’s turnover.
Request more information about the Lithuanian EMI license
All about the Lithuanian EMI license
EMI
- After the UK left the EU, Lithuania is leading the way with a record number of FinTech licenses issued in European jurisdictions. Currently, more than 100 Lithuanian payment institutions and electronic money issuers have already received registration.
- The Central State Bank is loyal to possible errors or shortcomings of the company during the first year of its existence. In addition, there is a special visa procedure in Lithuania, which allows startups to obtain a residence permit in a simplified procedure.
- EMI licenses are issued by the Lithuanian Central Bank. This state regulator, as well as other government institutions issuing licenses in Europe, is guided by the 2009-110 EC Directive, which is the basis of law for issuing electronic money.
- The submitted documentation for the EMI license will be reviewed by the Central Bank of Lithuania within 3 months from the first day of submission. The decision to issue an EMI license will be made after the review, within the same 3 months. If there are shortcomings in the documentation related to the form of the document and its content, the regulatory authority may request corrected forms or missing data on regulatory requirements.
- Since 2016, Lithuania has been a member of the SEPA single payment area, which unites 34 countries of the world. Thanks to a single account in this structure, the country has the right to be a payer and recipient of money within SEPA countries. Thanks to the generated accounts of the CENTROLink payment system, the user has direct access to the Single Euro Payment Area.
Capabilities of Lithuanian EMI license compared to classic banks
| Payment Service Provider (PSP) | Electronic Money Institution (EMI) | Specialized Bank | Bank | |
| Payment services/money remittance (In and Out) | ✔ | ✔ | ✔ | ✔ |
| Fiat currency exchange | ✔ | ✔ | ✔ | ✔ |
| Issuance of E-money (opening multicurrency accounts, e-wallets) | — | ✔ | ✔ | ✔ |
| Lending to businesses and individual | — | ✔ — | ✔ | ✔ |
| Deposits to businesses and individuals | — | — | ✔ | ✔ |
| Investment services, clearing, securities emissions | — | — | — | ✔ |
| EU Passporting to provide services in all EU countries | ✔ | ✔ | ✔ | ✔ |
| Payments System by Central Bank (for EUR settlement in SEPA area) | ✔ | ✔ | ✔ | ✔ |
Advantages of a Lithuanian EMI license
EMI
- Relatively fast and simple procedure for obtaining an EMI license.
- Customers can obtain a personal IBAN
- Possibility of SWIFT transfers
- Remote opening of payment accounts for individuals and legal entities
- The company can issue Visa or MasterCard payment cards
- The company can transfer payments with global banks in different currencies
- The company can make its own payment decisions and open accounts. In addition, correspondent accounts around the world
- Providing services for cash deposit or withdrawal and all transactions necessary for payment account operation.
- An extremely attractive tax system with relatively low taxes ranks 6th in the international ranking of Tax competitiveness
- The duration of the license is not limited to time.
- Passporting the license to other EU countries.
- All documents can be submitted in English. In addition, the jurisdiction of Lithuania complies with EU norms and therefore does not require in-depth research.
- Ability to conduct customer checks remotely as part of KYC procedures, through video link, digital signature, or electronic copies of documentation.
- Virtually no fines in the first year of the institution
Stages of EMI License in Lithuania acquisition
PRELIMINARY ASSESSMENT OF THE PROJECT
Stage 1
Result: Initial meeting with the Bank of Lithuania is successfully conducted; The approval to proceed with licensing is received from the Bank of Lithuania
Gofaizen & Sherle conducts preliminary analysis of the client prepares for the initial meeting with the Bank of Lithuania, which includes:
- Analysis of the documents that client have on hands
- Preparation of materials for the meeting with the Bank of Lithuania
- Preparation for initial meeting with representatives of the Bank of Lithuania
- Representing the client on the initial meeting with the bank of Lithuania
PRE-LICENSING PROCESS
Stage 2
Result: Basic documents have been prepared; there is a complete understanding of the project; preliminary approval from the Central Bank of Lithuania obtained
Gofaizen & Sherle After the successful meeting with Bank of Lithuania conducts pre-licensing process which includes the following:
- General consulting regarding the EMI licensing process
- Initial assessment for infrastructure require
- Preparation of (a) Business plan (b) Program of Operations (c) preliminary Financial Forecasts
- Shareholders and Group Companies Due Diligence
- Local Company Formation and assistance with Bank account opening for share capital contribution
- Human resource (at least 4 employees shall be in Lithuania) -assistance in essential staff recruitment process; drafting employment agreements
- Premises search (HQ should be based in Lithuania)
LICENSING
Stage 3
Result: All the necessary documents are drafted, application submitted; license granted
Gofaizen & Sherle carry out assistance for licensing process according to the following steps:
Preparation of legal, financial and IT documents (non-exhaustive list):
- 1.Description of the Management Structure
- 2.Compliance documentation (AML/KYC/KYT etc.)
- 3.Financial documentation and forecasts
- 4.Operational Risk Procedures
- 5.IT Procedures
Application for the license
- 1.Submission of the application for the license
- 2.Representation and guiding through the entire licensing process
- 3.Payment of the state fe
INFRASTRUCTURE SET-UP
Stage 4
Result: All the necessary arrangements for the project are completed; EMI license holder fully operative
The stage is necessary for the license holder to be fully operative and be capable of initiating activity. Deliverables include the following:
- Setup of IT Systems -mediation in finding an IT system supplier and/ or facilitation of IT; system development to meet EMI License requirements
- Compliance –consulting and training of employees on KYC process, AML and terrorist financing check tools according to the specs of the project
- Banking Partner –to meet the requirements on clients’ funds segregation, provide FX and/or cross-border transfers, and other financial services
MAINTENANCE AND ADD-ONS. ONGOING AFTER LICENSE ACQUISITION BY REQUEST
Stage 5
This stage is necessary to support and maintain the structure and includes:
- Accounting services
- Auditing
- Opening of safeguarding accounts
- Connection to SWIFT payment scheme
- Agreement for the issuing own brand MasterCard cards
- BIC/SWIFT and LEI codes acquisition
- Reporting to Central Bank on the regularly basis
- Applying for activity in other jurisdictions (incl. passporting)
- Consulting on the arising issues from Central Bank
- Charter of the payment institution
- Corporate documents
- Company requisites
- Detailed business plan
- Action program and activity structure
- Proof of minimum share capital
- Bank account
- Founders’ passports and certificate of registration
- A detailed description of the generally accepted measures to protect and regulate clients’ funds
- Local office lease agreement
- Criminal records of all beneficiaries
- Description of the use of internal management controls, including administrative procedures, risk management procedures, and accounting procedures
- Description of the internal management control mechanism for the performance of duties to prevent money laundering and terrorist financing
- Description of company policies: customer funds protection measures, risk and accounting controls, AML, organizational structures, and branches
- The minimum share capital of 350,000 euros (no share capital requirement for a restricted license)
- Proof of origin and receipt of finances
- Opening of a local office
- Opening of a Lithuanian bank account
- Availability of AML officer
- Impeccable reputation of the company’s beneficiaries
- A director or manager must have higher education in law or economics, management or business administration, and have an impeccable reputation, competence, and practical experience as the head of the institution.
- There must be at least one individual among the shareholders, Lithuanian residency is not required. The main requirement is the age over 18 and impeccable business reputation.
FinTech lawyers in Lithuania
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