Obtain an EMI licence in Lithuania

When applying for an EMI (Electronic Money Institution) licence in Lithuania, companies are given the opportunity to issue and manage digital currency. These digital assets can be used for various electronic transactions. Let us consider the importance of such a licence for fintech companies:

• Opens business horizons: EMI licences enable fintech organisations to offer electronic money and payments to their customers, increasing their revenue and customer base.
• Strengthening market position: with an EMI licence, companies gain a competitive advantage by providing enhanced services to customers and ensuring the security of their financial transactions.
• Entry into the European arena: with an EMI licence registered in Lithuania, companies can operate effectively across Europe, avoiding the need for additional permits.
• Space for innovation: with an EMI licence, fintech companies have more space to create innovative products and services, enriching the market with fresh solutions.

Thus, the open EMI licence in Lithuania is not only a regulatory tool, but also a powerful incentive for fintech companies wishing to strengthen their presence in the electronic money and payments market.

Evolution of fintech regulations in Lithuania

Transformation of Lithuania into the epicentre of fintech

Although not large in size, Lithuania has attracted the interest of the global fintech segment and has established itself as a centre of financial innovation. Key aspects that have contributed to its growth in this area:

• Market reforms and liberalisation Since the 2000s, Lithuania has embarked on active economic changes, giving a boost to its market. These reforms have made the process of setting up a business easier, opening doors for foreign investors.
• Admittance to the European Union Subsequent to affiliating with the EU in 2004, Lithuania acquired entry to Europe's extensive market, propelling its economic expansion.
• Control in the financial technology sector Lithuania offers a conducive atmosphere for financial technology enterprises, particularly concerning authorization for electronic currency and payment services (EMI and PI) dealings. This has facilitated companies to function with digital currency without securing the standing of a bank.
• Stimulating innovation and development of start-ups In pursuit of technological leadership, Lithuania supports the startup ecosystem through technoparks, incubators and accelerators to foster innovation in fintech.
• Advanced tax strategyThe country offers tax incentives for innovative businesses, such as favourable taxation and rebates for scientific projects.
• Co-operation with major regulators Close co-operation with major financial bodies, such as the European Bank for Reconstruction and Development and the European Banking Association, strengthens confidence in Lithuania's financial sector.

Evolution of fintech legislation

The development of financial technology (fintech) laws in Lithuania has forged a contemporary and inventive regulatory milieu. Here are the pivotal aspects in the progression of the legal framework:

The process of obtaining an EMI licence in Lithuania

Submission of the application and required documents

Timeframes for processing an application to open an EMI licence in Lithuania and frequent reasons for refusal

The duration of the endorsement procedure for an EMI permit request in Lithuania fluctuates based on elements like the intricacy of the application and the existing workload of the regulator. Typically, the procedure spans from a few months to half a year.

• Incomplete package of documents: the absence of some documents or their insufficient preparation is often a reason for refusal. It is critical to provide all the necessary information and fully comply with the established standards.
• Financial instability: if a company does not meet minimum capitalisation or financial stability criteria, this may be grounds for rejection.
• Risk management problems: lack of effective risk management measures and procedures, such as anti-money laundering measures, may be a reason for rejection.
• Unsound business model: if regulators consider that the business model poses a threat to customers or financial stability, this may be grounds for rejection.
• Questionable management: If a company's management or key shareholders have questionable reputations or links to illegal activities, this may be a reason for rejection.
• Need for additional analysis: regulators may require more detailed scrutiny, which in turn may prolong the application process.

To successfully navigate the process of obtaining an EMI licence, it is important to prepare thoroughly, taking into account all possible risks and difficulties and following all the requirements. Working with experienced advisors and lawyers can significantly increase the chances of successfully obtaining a licence.

Possible legal forms of companies for obtaining an EMI licence in Lithuania

To acquire an Equated Monthly Installment (EMI) authorization in Lithuania, a company must be enrolled as one of the subsequent legal configurations:

Each of these juridical structures possesses its own attributes, and opting for the fitting one relies on the particular requirements and designs of the enterprise. Originators should contemplate the distinctions in legal and fiscal responsibilities for each structure and opt for the most apt choice.

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Start-up capital for EMI licence in Lithuania

To procure an EMI (Electronic Money Institutions) license in Lithuania, you necessitate an inaugural capital of 350,000 euros. This sum functions as the essential requirement for the financial preparedness of the company during the application process. The entire planned financial structure, including additional funds, must be arranged before applying for the license. This approach guarantees compliance with the standards set by the Financial Supervisory Authority.

Steps after obtaining an EMI licence in Lithuania and starting business activities

Once you have obtained an EMI licence, your fintech project has a few key steps to complete:

• Opening a corporate account: you will need an account in a Lithuanian bank to conduct financial transactions. Evaluate the terms and conditions of different banks to choose the best one.
• Execute a peril oversight arrangement: devise a framework to record and manage the conceivable perils of your enterprise.
• AML and KYC conformity: implement measures for anti-money laundering and customer identification.
• Technological infrastructure establishment: arrange and configure your technology platform, guaranteeing data security and resilience to potential cyber onslaughts.
• Group tutelage: conduct instructional sessions for your team to ensure they are cognizant of all regulations and requirements.
• Documentation and proclamation: adhere to all accounting requisites and submit requisite reports to regulators.
• Juridical conformity: stay abreast of the legal framework and be primed for audits.
• Merchandising and clientele attainment: escalate your promotional undertakings to augment your customer base by leveraging your EMI licence.

By following these steps, your fintech business will successfully start operating in Lithuania, meeting standards and offering quality services to customers.3.6. Licensing procedure for Small Electronic Media Issuers (SEMI) in Lithuania:

The SEMI authorization in Lithuania offers firms the opportunity to generate electronic funds within a restricted quantity. This category of authorization is encompassed in the roster of financial authorizations dispensed by the Bank of Lithuania and encompasses the subsequent benefits:

The SEMI licence allows organisations to issue electronic funds in limited amounts. E-money functions as a tool for making electronic payments, transactions and as a way to store value.

Companies holding a SEMI licence in Lithuania can process payments, which makes such a licence interesting for fintech companies and payment platforms.

Moreover, in conjunction with fundamental functionalities, the SEMI permit might encompass the authority to furnish supplementary monetary services as delineated by Lithuanian statutes.

Acquiring a SEMI authorization in Lithuania entails a systematic and meticulous procedure comprising the subsequent stages:

• Cultivating a commercial paradigm: present an elaborate business blueprint that encompasses the firm's strategic goals, its fiscal outlook, and prospective avenues for growth.
• Submission of application and supporting documents: the applicant must submit all required documents, including articles of association and corporate documents, an itemised business plan, management information and other required materials.
• Payment of state fees: the applicant must pay the prescribed fees for processing the application.
• Application scrutiny: The Lithuanian bank conducts a comprehensive analysis of the submitted application and documents. This procedure may extend over a protracted period, lasting up to several months.
• License bestowal: Upon fulfillment of all criteria stipulated by the regulator and the complete examination of the application, the Bank of Lithuania reaches a determination to bestow the SEMI license.

Authorised capital and financial guarantees

In Lithuania, companies holding a SEMI permit are not required to maintain a minimum share capital. SEMI-licensing allows entities to create digital currency and manage transactions within the Lithuanian and European legal frameworks. It is a fitting option for businesses focusing on limited financial transactions and offering advanced financial services.

Interaction with the Lithuanian banking system

Opening a corporate account for fintech companies in Lithuania

Commencing a corporate account in Lithuania for fintech enterprises is a pivotal stride to empower them to execute pecuniary transactions and furnish services to patrons.

You must diligently observe the adherence prerequisites of your selected financial institution and guarantee that your company's activities conform to all relevant banking statutes.

Activities of the Bank of Lithuania within the framework of supervision over financial technology entities.

The Financial Institution of Lithuania, alternatively acknowledged as Lietuvos Bankas, takes a central position in the Lithuanian financial supervision framework, especially regarding financial technology businesses holding Electronic Money Institution (EMI) licenses. The decisions and supervision by this body significantly impact the operations of financial technology entities within the country. Key aspects of the Repository of Lithuania's oversight:

• Financial Monitoring Department (FMA): this division of the Bank of Lithuania supervises the activities of financial establishments, including EMI firms, ensuring compliance with fiscal norms and laws.
• Anti-money laundering (AML) measures: The Bank of Lithuania mandates that Electronic Money Institution (EMI) entities thoroughly adhere to regulations preventing counterfeit currency by implementing systems opposing money laundering and the financing of criminal organizations.
• Securing cyber integrity: The Bank of Lithuania places particular emphasis on cyber integrity in its oversight of financial technology enterprises. Such companies must ensure robust safeguarding of customer data and transactions.
• Uninterrupted discourse: The Bank of Lithuania is dedicated to uninterrupted discourse with EMI enterprises, encompassing regular reports, exchange of beneficiary information, and collaboration in investigating dubious transactions.
• Sanctions: The Bank of Lithuania is empowered to levy fines and enact other measures against financial technology enterprises that transgress the law or its rulings. Such penalties can pose a substantial burden on businesses.

For successful operation of fintech firms with EMI licence in Lithuania, it is crucial to strictly follow the recommendations and directives of the Bank of Lithuania. Companies should be prepared for detailed verification and continuous monitoring to maintain their reputation in the market.

Conclusion

Acquiring an Equated Monthly Installment (EMI) authorization in Lithuania signifies a significant strategic maneuver for financial technology (fintech) firms aspiring to penetrate the European market. Lithuania provides a favorable milieu for the regulation of fintech, rendering it appealing for such enterprises. In this summary, we concentrate on the principal facets of the procedure for acquiring an EMI authorization in the nation.

Triumphantly petitioning for an Equated Monthly Installment (EMI) authorization necessitates a thoroughly crafted commercial strategy, an assemblage of essential paperwork, and the ensuing initiation of a corporate account with a Lithuanian financial institution. Adhering to the standards stipulated by the Bank of Lithuania is essential for engaging in financial technology undertakings within the nation.

If you require supplementary details or assistance in the procedure of acquiring an EMI authorization in Lithuania, our proficient specialists are prepared to aid. Reach out to us by completing the form on the website.