Lithuania EMI license

Lithuania EMI license (Electronic Money Institution)

Tetra Consultants assists our international clients in securing a Lithuania EMI license (Electronic Money Institution). Every electronic money institution that issues digital money in Lithuania has to procure an EMI license. Such an institution licensed by Lithuania is allowed to transfer money abroad, provide services for withdrawing and depositing money, oversee e-transactions and conduct debit or credit transactions.

An institution can choose to apply for an EMI license for restricted activities or unrestricted activities. Obtaining a Lithuania EMI license for unrestricted activities will allow your company to provide any of the above electronic money related services in the European Economic Area (EEA) without having to procure a local license. On the other hand, an EMI holding an EMI license for restricted activities can only conduct business activities in Lithuania.

Introduction to Lithuania EMI license

• Currently, there are 80 electronic market institutions operating in Lithuania. In the fourth quarter of 2020, the total income from electronic money issuance and payment services in Lithuania was approximately EUR 114.4 million.
• All e-market institutions with a Lithuania EMI license are governed by the provisions in the Republic of Lithuania Law on Electronic Money and Electronic Money Institutions.
• Lithuania is a popular jurisdiction to obtain an EMI license. An EMI license for unrestricted activities will allow the applicant to operate in other countries in the EEA without having to procure additional licenses.
• With an EMI license for unrestricted activities, companies can issue digital money, virtual wallets and payment accounts across Europe. The license also allows companies to issue Visa or Mastercard payment cards to clients and access payment systems developed by the Bank of Lithuania.
• Moreover, setting up a company in Lithuania is a fast and simple process. There is no requirement for a resident director or shareholder to register a company in Lithuania.
• As such, Tetra Consultants recommends getting a Lithuania EMI license if you wish to provide e-money services to the European market.

When will you require a Lithuania EMI license?

• Under the Lithuania Law on Electronic Money Institutions, any institution that issues or wishes to issue electronic money will need to apply for this license.
• An electronic money has the following characteristics:
  • Has a monetary value.
  • Can be store electronically.
  • Is issued in order to make payment.
  • Is received by other parties (not including the issuer) as payment.
• The EMI must be a credit institution incorporated in the Republic of Lithuania or a Member State of the European Economic Area (EEA).
• Besides issuing electronic money, the licensed institution may conduct the following activities:
  • Provide payment services
  • Grant credit related to the services if the stipulated conditions have been met.
  • Provide supporting services such as storage of funds, currency exchange, processing of relevant data, etc.
  • Exchange digital currency with cash
  • Distribute and redeem electronic money through an agent. However, the institution cannot issue it through the agent.
• There are two types of EMI licenses in Lithuania, namely the EMI license for unrestricted activities and the EMI license for restricted activities. An EMI License (for unrestricted activities) allows an electronic money institution to issue electronic money and provide payment services within the European Economic Area (EEA). On the other hand, an electronic money institution with an license for restricted activities can only operate within the Republic of Lithuania and is not allowed to provide electronic money services outside the country.
• The requirements for an EMI license (for unrestricted activities) are more stringent than that for restricted activities. For example, there are no minimum capital requirements or shareholder eligibility requirements for an EMI license for restricted activities.
• On the other hand, an EMI license for unrestricted activities requires a  minimum initial capital of EUR 350,000 and proof of the qualifications and suitability of the shareholders of the EMI.

Documents required to apply for Lithuania EMI License

• Details of the applicant
• Articles of Association
• Certificate of Incorporation
• A document verifying the representative’s right to represent the company
• A document confirming the payment of a stamp duty for license issue
• A programme of operations
• A business plan
• Proof that applicant’s capital meets the minimum capital requirement (e.g. audited financial statements, bank statement, etc.)
• A description of the structural organisation
• A description of the measures implemented to protect consumer funds, including risk management and internal control mechanisms
• A questionnaire on operation risk of the company
• Questionnaires of the management team and key shareholders

Mandatory requirements

• The Bank of Lithuania requires the established electronic money institution (EMI) to adhere strictly to the following requirements:
  • Fitness of submitted documents: Submitted documents must be accurate and meet the requirements of the legal acts governing EMI activities and their administration.
  • Adherence to minimum capital requirement: All EMI, with the exception of EMI engaged in restricted activities, must have a minimum initial capital of EUR 350,000. An EMI engaged in restricted activities does not have a minimum capital requirement. However, an EMI engaged in restricted activities generally cannot have average outstanding digital money greater than EUR 900,000 per month for the preceding 6 months. If the EMI exceeds this limit, the institution must apply for an EMI license for unrestricted activities within 30 days.
  • Additionally, an EMI that holds a license for restricted activities cannot provide more than EUR 3,000,000 worth of payment services unrelated to virtual money issuance per month.
  • Fitness and propriety of the EMI and its shareholders: Shareholders with a substantial share in the EMI’s authorised capital and/or voting rights must be trustworthy, financially stable and ensure fair and sensible administration of the EMI. An EMI engaged in restricted activities is not subjected to this requirement.
  • Fitness and propriety of owners of an EMI: The directors and owners of an EMI must maintain a good reputation and be equipped with the necessary qualifications and experience needed to fulfil their roles.
  • Implement measures to protect client funds: All EMIs that receive funds from clients must implement one of the following measures to safeguard client funds:
    • Place them in a separate bank account that is opened by a financial institution in the Republic of Lithuania or another Member State.
    • Ensure these funds are covered by an insurance agreement, guarantee or surety bond.
• The prospective EMI will be required to provide a comprehensive business plan that details the management and administration of electronic money insurance activity, based on the nature and range of financial activities provided. This includes an organizational structure defining clearly the responsibilities and functions of each employee, a system to monitor and assess possible risk of activities conducted, an internal control system, accounting measures and other prudent measures to facilitate the activities conducted in the EMI.

How long to secure Lithuania EMI license?

• Before applying, Tetra Consultants will assist you in registering a Lithuania company by providing a local company address and local company secretary. Typically, this process should take approximately 2 weeks.
• Upon registering the company, we will proceed to open a corporate bank account with a reputable local or international bank. You can expect your corporate bank account to be ready in 4 weeks.
• Generally, you can expect your Lithuania EMI license (Electronic Money Institution) application to take around 3 months for EMI license for unrestricted activities and 2 months for EMI license for restricted activities, if the initial application does not contain any deficiencies. Each application will be reviewed individually, and they may revert asking for additional supporting documents or information.
• For example, amendments may be requested by the Bank of Lithuania if the information previously provided is missing, incomplete, or inconsistent. Upon receiving an amendment request, you will have 3 months for EMI license for unrestricted activities and 2 months for EMI license for restricted activities to make the necessary amendments or to verify the information submitted previously.

How to apply for an EMI license in Lithuania?