Lithuanian EMI Licence: The EU Fintech Gateway That Still Delivers

Why Lithuania Remains the EU's Leading EMI Jurisdiction

Since the Bank of Lithuania introduced its streamlined electronic money institution licensing framework, the country has attracted more fintech licence applications than any other EU member state. As of early 2025, Lithuania hosts over 140 licensed EMIs and payment institutions, a figure that surpasses established financial centres such as Luxembourg and Ireland.

The reasons are structural rather than promotional. Lithuania offers a combination of regulatory predictability, modest capital requirements, rapid processing timelines, and — critically — full EU passporting rights under the Electronic Money Directive 2009/110/EC (EMD2) and the Payment Services Directive (EU) 2015/2366 (PSD2).

The Legal Framework

Lithuanian EMI licensing is governed by the Law on Electronic Money and Electronic Money Institutions (No. XI-1868), which transposes the EU's EMD2 into national law. The Bank of Lithuania (Lietuvos bankas) acts as the competent authority for both EMI and payment institution licensing.

An EMI licence authorises the holder to:

• Issue electronic money within the meaning of Article 2(2) of EMD2
• Provide payment services as listed in Annex I of PSD2
• Distribute and redeem electronic money through agents and distributors
• Passport services across all 30 EEA member states via notification

Capital Requirements and Financial Thresholds

The minimum initial capital requirement for a Lithuanian EMI licence is €350,000, as prescribed by Article 4 of EMD2. This is significantly lower than the capital required for a credit institution licence (€5 million minimum under the Capital Requirements Directive).

Beyond initial capital, applicants must demonstrate:

• Own funds calculation: Ongoing own funds must equal at least 2% of the average outstanding electronic money, calculated using Method D as specified in Article 5 of EMD2
• Safeguarding arrangements: Client funds must be segregated either through ring-fenced accounts at a credit institution or through an insurance policy from an authorised insurer
• Professional indemnity insurance: Required where the EMI also provides payment initiation services (PIS) or account information services (AIS) under PSD2

Application Process and Timeline

The Bank of Lithuania has established a structured four-phase application process:

Phase 1 — Pre-application consultation (2-4 weeks) The Bank of Lithuania offers a formal pre-application meeting. This is not mandatory but is strongly recommended. The regulator will assess the business model at a high level and identify potential obstacles.

Phase 2 — Application submission The application dossier must include:

• Detailed business plan covering a minimum three-year projection period
• Programme of operations describing all payment services and e-money issuance activities
• AML/CFT compliance framework aligned with Lithuania's Law on Prevention of Money Laundering and Terrorist Financing
• Governance structure including fit-and-proper documentation for directors, shareholders holding 10% or more, and the compliance officer
• IT security and operational resilience documentation
• Safeguarding mechanism details

Phase 3 — Regulatory assessment (3-6 months) The statutory assessment period is three months from receipt of a complete application, extendable by a further three months. In practice, the Bank of Lithuania processes most EMI applications within four to six months, provided the dossier is complete.

Phase 4 — Licence issuance and passporting Upon approval, the EMI is entered into the Bank of Lithuania's register and the EBA's payment institutions register. Passporting notifications to host member states typically take 30 working days.

Costs of Obtaining and Maintaining a Lithuanian EMI Licence

The direct regulatory costs are modest by EU standards:

• Application fee: €5,690 (current Bank of Lithuania fee schedule)
• Annual supervisory fee: Calculated based on revenue, typically €3,000-€15,000 for mid-sized EMIs
• Capital requirement: €350,000 minimum, held in a Lithuanian bank account

The total cost of obtaining a Lithuanian EMI licence, including legal, compliance, and advisory fees, ranges from €150,000 to €350,000 beyond the capital requirement. This includes:

• Legal advisory fees for application preparation: €40,000-€80,000
• AML/CFT framework development: €20,000-€40,000
• IT security assessment and documentation: €15,000-€30,000
• Ongoing compliance infrastructure: €50,000-€100,000 per annum

Substance Requirements

The Bank of Lithuania has progressively tightened substance requirements. An EMI licensed in Lithuania must demonstrate genuine local presence:

• At least two directors must be resident in Lithuania or capable of demonstrating regular physical presence
• The compliance officer and MLRO must be accessible to the regulator
• Core management functions, including risk management and internal audit, must be performed from Lithuania
• The company must maintain a physical office in Lithuania (registered office alone is insufficient)

These requirements align with the European Banking Authority's Guidelines on Authorisation under PSD2 (EBA/GL/2017/09), which emphasise that licensing arbitrage without genuine substance is impermissible.

EU Passporting: The Core Advantage

The principal value of a Lithuanian EMI licence is the ability to passport services across all EEA member states. Under Article 3 of EMD2, an EMI licensed in any member state may:

• Provide services directly in other member states (freedom to provide services)
• Establish branches or agents in other member states (freedom of establishment)

The passporting notification is made by the home state regulator (Bank of Lithuania) to the host state regulator. The host state may impose certain requirements regarding the use of agents, but cannot require a separate licence.

This means a Lithuanian EMI can issue e-money and provide payment services to customers in Germany, France, the Netherlands, Spain, and all other EEA states without additional licensing.

Lithuania vs Other EU EMI Jurisdictions

Factor	Lithuania	Malta	Ireland	Luxembourg
Capital requirement	€350,000	€350,000	€350,000	€350,000
Typical timeline	4-6 months	8-12 months	6-9 months	6-12 months
Application fee	~€5,700	~€3,000	~€5,000	~€15,000
Substance requirements	Moderate	Moderate	High	High
Banking access	Good	Challenging	Excellent	Very good
Language	English accepted	English accepted	English	French/German

Common Pitfalls

Several issues consistently delay or derail Lithuanian EMI applications:

• Insufficient AML framework: The Bank of Lithuania applies a risk-based approach but expects detailed customer risk assessment methodologies, particularly for cross-border transactions and crypto-adjacent business models
• Weak governance structures: Nominee directors or directors without genuine financial services experience will be rejected at the fit-and-proper stage
• Inadequate safeguarding: The regulator requires specific evidence of safeguarding arrangements, not merely a commitment to establish them post-licensing
• Banking relationships: Securing a Lithuanian bank account for safeguarding purposes has become more difficult; applicants should begin banking discussions early in the process

Key Takeaways

• Lithuania remains the fastest and most cost-effective jurisdiction for obtaining an EMI licence with full EU passporting rights under EMD2 and PSD2
• The minimum capital requirement is €350,000, with total setup costs typically ranging from €500,000 to €700,000 including advisory fees
• Application processing takes four to six months for well-prepared dossiers, significantly faster than most EU alternatives
• Substance requirements are real and increasing — the Bank of Lithuania expects genuine local management presence
• The EMI licence enables passporting across all 30 EEA states, making it the most efficient route to pan-European e-money issuance and payment services
• Banking access in Lithuania is good but should be secured early, as correspondent banking relationships for fintech businesses require lead time
• Firms with crypto-adjacent business models should expect enhanced scrutiny of their AML/CFT frameworks during the application process