Lithuania, one of the Baltic States and a member of the European Union, is a jurisdiction having all necessary conditions for its FinTech ecosystem to grow and develop, namely support from the government, friendly regulation, favourable taxation system, progressive regulatory rules, talented workforce, innovative infrastructure and relatively low operational costs. Lithuania strives to become the number one FinTech hub in Europe by building innovative financial sector and accelerating e-government solutions.

This jurisdiction is famous for its EMI licenses which play an important role in the FinTech ecosystem of Lithuania: out of more than 250 fintech companies registered in the country, over 80 are electronic money institutions. During 2016-2021 the number of EMIs has grown 7 times, customer funds safeguarded by EMIs and total transaction amount have increased about 80 times.

Electronic Money Institutions (EMIs) are known to provide online payment systems and issue electronic money or e-money. Electronic money is a monetary value that is stored electronically or magnetically and serves as a digital alternative to cash. E-payments are done via debit, credit cards, direct bank deposits, and other alternative e-payment methods. An electronic money institution is authorized to store, issue and manage electronic money on behalf of its users.

Lithuanian Electronic Money Institution License (EMI)

The Republic of Lithuania Law on Electronic Money Institutions lays down that ‘electronic money’ means a monetary value as represented by a claim on the issuer which is issued on receipt of monetary funds by the electronic money issuer from a natural or legal person and has the following characteristics:

• stored electronically (incl. magnetically);
• is issued for the purpose of making payment transactions;
• is received by persons other than electronic money issuers.

In order to accept money from clients in the electronic domain and to hold it in payment accounts for a relatively long time, issuing electronic money and then redeeming it, prior to that it is necessary to become a licensed electronic money issuer.

It is worth noting that the Law provides that EMIs shall be entitled to not only issuing electronic money in the Republic of Lithuania and/or other Member States, but also providing payment services, e.g. issuing and/or acquiring of payment instruments, money transfers and other services. Due to this reason, an EMI differs from a payment institution in that an EMI may withhold client funds, whereas payment institutions cannot do so.

Key features and advantages of Lithuanian EMI license:

• Flexible approach of the Lithuanian regulatory;
• Relatively short license obtaining time period;
• Passportable to all other EU member-states;
• Possibility to provide services in all EU and EEA countries;
• Access to SEPA and CENTROlink ;
• Possibility of SWIFT transfers;
• Provide individual IBAN accounts for its clients;
• Issue Visa / Mastercard payment cards for the clients;
• Possibility to transfer payments in different currencies;
• Remote account opening for individual and business customers;
• Possibility to safeguard client funds in the Bank of Lithuania;
• Relatively low operational costs;
• Attractive tax system;
• Top managers can be non-EU residents;
• A license is issued for an indefinite period (no license duration limit);
• Remote KYC onboarding process for the customers;
• No regulatory fines in the first year of operation.

Obtaining the EMI license in Lithuania is an optimal solution for those who plan to grow and develop their business with a particular focus on Europe. Although Lithuania offers favourable licensing conditions and a large number of advantages, the applicant should be ready to comply with a number of legal requirements, be ready to contribute a considerable authorized capital, develop a certain list of internal policies and regulations and go through the process of paperwork which is not easy and fast. Our team is ready to accompany the applicant throughout the course of license obtaining in order to make the process as smooth as possible.