Lithuania EMI Authorization for Electronic Money and Payment Institutions

Currently, Lithuania is an advanced fintech center in the EU and is ranked 4th in the Global Fintech Index 2020. And all this is due to a clear legal framework and a favorable business environment. This country will be very attractive for companies wanting a Lithuania EMI license. The Lithuanian payment system license is popular among fintech companies that need reliable support and resources from the Bank of Lithuania. Companies can test and improve their innovations in real time but in a controlled environment.

What is Important to Know About EMI in Lithuania

  • The process for acquiring a Lithuania EMI license, governed by the Lithuanian Central Bank, reflects adherence to the 2009-110 EC Directive.
  • The Lithuanian Republic Law on Electronic money regulates all licensed companies’ activities.
  • Lithuania has become a FinTech hub within the EU, especially post-Brexit, issuing many e-money and payment institution licenses.
  • Over 100 entities in these categories are now registered in the country.
  • Applicants can expect their documentation to be assessed within a three-month timeframe.
  • The Central State Bank in Lithuania adopts a lenient approach towards companies’ potential errors or oversights during their initial year.
  • Lithuania facilitates startups through a simplified visa procedure, aiding in acquiring residence permits.
  • The Central Bank of Lithuania will evaluate EMI license applications within a three-month review period. A decision on issuing the license will follow within this timeframe. The bank may ask for changes or additional information if it turns out that the initial documentation needs to meet the requirements.
  • Since 2016, Lithuania has been an integral part of the SEPA (Single Euro Payments Area), encompassing 34 countries. This membership ensures that with a single account, entities in Lithuania can seamlessly send and receive funds across the SEPA zone.
  • Through CENTROLink, Lithuania’s payment system, users gain direct access to all the benefits of SEPA, underlining the country’s commitment to fostering a robust and accessible financial ecosystem.

What Activities Can Be Covered by the Lithuanian EMI License

With a Lithuania payment system license, businesses can unlock numerous opportunities in the fintech world. Here are the primary benefits:

  • Offer Visa and Mastercard linked to client accounts.
  • Open IBAN accounts for customers.
  • Link existing bank cards to sub-accounts.
  • Process payments in major currencies such as USD, EUR, and GBP globally.
  • Develop a unique card payment system.

Moreover, having a payment license in Lithuania enables companies to provide:

  • Electronic money solutions, like e-wallets and prepaid cards.
  • International money transfers.
  • Services for crediting and withdrawing cash from payment accounts.
  • Comprehensive account management services.
  • Direct debit for third-party payments based on orders.
  • Credit transfer services.
  • Issue and acquisition of payment instruments.

If an entrepreneur is considering entering the fintech sector, the Lithuania EMI license for sale offers a great start in this fast-growing market.

Main Advantages of Obtaining an EMI License in Lithuania

Securing Lithuania’s EMI license propels businesses into the fintech arena with a host of benefits:

  1. The path to obtaining an e-money license in Lithuania is streamlined and efficient.
  2. Companies can issue widely-accepted payment cards such as Visa or MasterCard.
  3. SWIFT transfers.
  4. There will be almost no fines in the first year of the institution.
  5. Engage in transactions across different currencies with ease.
  6. Clients can secure their own IBAN.
  7. Documentation is accepted in English, and since Lithuania’s regulatory framework aligns with EU standards, extensive research is optional.
  8. The license has no time restrictions and encompasses all essential services for conducting cash deposits, withdrawals, and other payment account transactions.
  9. From account openings to customer verifications, all can be handled digitally, aligning with modern KYC procedures.
  10. Enjoy the perks of operating in a jurisdiction ranked 6th for tax competitiveness internationally.
  11. With the ability to pass the license throughout the EU, a payment institution in Lithuania is well-positioned for broader market access.

By acquiring a PІ in Lithuania, businesses can leverage these advantages for success in the European financial landscape.

Comparison of EMI licenses in Lithuania and Cyprus

Thanks to the Bank of Lithuania and a 3-6 month licensing process for companies wanting to hold an EMI license in Lithuania, the country can offer a favorable environment for fintech development. Lithuania’s simple banking environment will attract many companies affected by Brexit.

Cyprus will interest businesses because it offers low start-up and operating costs. Also important will be the multilingual environment, especially in English, and the favorable tax system. The country has an extensive network of double taxation treaties. Significant tax incentives are provided to companies engaged in research and development activities.

What is Required to Obtain an EMI License in Lithuania

To secure an EMI license in Lithuania, businesses need to fulfill the following criteria:

  • Capital Requirements
    A minimum of 350,000 euros in share capital unless applying for a restricted license.
  • Financial Transparency
    Clear proof of origin and receipt of finances.
  • Local Presence
    Establishment of a Lithuanian office and a local bank account.
  • AML Compliance
    Appointment of a qualified AML officer.
  • Reputable Beneficiaries
    The company’s beneficiaries must have an impeccable reputation.
  • Qualified Leadership
    A director or manager with a relevant higher education degree, stellar reputation, and practical leadership experience.
  • Shareholder Criteria
    At least one shareholder over 18 has a solid business reputation, though Lithuanian residency is not mandatory.

Documentation

  1. Corporate documents and company details.
  2. Submit the founder’s identification, including passports and registration certificates.
  3. Criminal background checks for all stakeholder beneficiaries.
  4. Provide a well-elaborated business plan.
  5. Share an action program alongside a detailed activity framework.
  6. Prove possession of the required minimum share capital and an active bank account, aligning with Lithuania financial license prerequisites.
  7. Illustrate comprehensive measures for client fund protection and regulation.
  8. Detail the internal control mechanisms for duties related to anti-money laundering (AML) and counter-terrorist financing.
  9. Present a lease agreement for your local office premises.
  10. Describe utilizing internal management controls: administrative, risk management, and accounting procedures.
  11. Outline company policies encompassing client funds protection: risk, accounting controls, organizational structures, and branches.
  12. Provide a detailed account of measures and controls to combat money laundering and terrorist financing.

Steps for Obtaining an EMI License in Lithuania

Initial Project Assessment

  • Document analysis.
  • Preparation for the first meeting with the Bank of Lithuania.
  • Client representation during this meeting.

Pre-licensing

E-Money Institution License guidance and infrastructure evaluation.

  • Development of business plan, operations program, and financial projections.
  • Shareholder and group company vetting.
  • Help set up a local company and open a bank account for share capital.
  • Recruitment support ensures at least four employees are based in Lithuania and assists in finding a suitable headquarters.

Licensing

  • Prepare and submit legal, financial, and IT documents (management structure, compliance, economic forecasts, risk procedures, and IT protocols).
  • Complete guidance through the licensing journey, including application submission and state fee payment.

Infrastructure Implementation

  • IT system setup and development compliant with Lithuania E-Money Licence requirements.
  • Compliance training in KYC, AML, and terrorist financing checks.
  • Establishing banking partnerships for financial services, including FX and cross-border transfers.

Ongoing Support and Expansion

  • Accounting, auditing, and safeguarding account management.
  • Integration with payment schemes like SWIFT.
  • Assistance with international operations and central bank reporting.
  • Consultation on any emerging issues from the central bank.
  • Assistance with connection to Centrolink.

Additional Assistance in Business Establishing

  1. In addition to obtaining an EMI license in Lithuania, you can get help building your business infrastructure. The client will be offered the following options for the development of documentation:
    • Comprehensive preparation of documents from scratch to completion.
    • Optimization of plans and risk assessment.
    • Integration of White Lable as an effective, cost-effective solution.
  2. Whether we enhance your software to meet compliance standards or offer reliable SAAS or BAAS platforms such as Crasula or Canopus, we ensure that your IT infrastructure complies with Lithuanian e-money legislation.
  3. Advice on card issuance strategies, where choosing the White Lable option with partners such as DECTA and Wallester can significantly reduce time and financial investment compared to direct membership with a principal.

Lithuania Emi License Fee

Before applying for an EMI license, an obligatory payment must be made to the State Tax Inspectorate (STI) as a governmental fee for issuing the EMI license. This fee stands at EUR 1,463, as determined by the Government of the Republic of Lithuania in Resolution No 1458, dated 15 December 2000. If the application is for an EMI license with limited permissions, the required fee is reduced to EUR 1,235.

FAQ

What is the nature of e-money?

E-money is a digital representation of cash, typically stored on electronic devices like smartphones or cards and utilized for transactions to buy goods or services. Unlike cryptocurrencies, which are decentralized and blockchain-based, e-money is a digital counterpart to physical currency underpinned by conventional monetary reserves. Examples of e-money encompass funds linked to debit cards and PayPal balances.

What are the language requirements for documents submitted to the Bank of Lithuania?

Submissions to the Bank of Lithuania must be in either Lithuanian or English. Documents in other languages require a signed translation from a certified translator, complete with the translation agency’s official seal.

Under what circumstances will the Bank of Lithuania decline to grant a license?

If the Bank of Lithuania identifies any shortcomings in a license application, it will request corrections. Failure to amend these deficiencies within the specified timeframe (3 months for unrestricted EMI; 2 months for restricted EMI) or to seek an extension may lead to a rejection of the EMI license. Additionally, the Bank may only accept a license if the provided details meet legal standards governing EMI operations and authorizations.

What do payment initiation and account information services entail?

These services represent specialized financial offerings regulated by the Lithuanian Law on Payments, akin to an EMI. Payment initiation services facilitate transactions between a payer and a payee, while account information services provide consolidated information regarding one or multiple payment accounts held by a user.

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