How to Get an EMI Licence in Europe: Complete Process Guide

An Electronic Money Institution (EMI) licence is the gold standard regulatory authorisation for fintech companies that want to issue electronic money, provide payment accounts, and offer card programmes across the European Economic Area. Under the Electronic Money Directive 2 (EMD2, Directive 2009/110/EC) and the Payment Services Directive 2 (PSD2, Directive 2015/2366), an EMI licence grants the broadest range of payment permissions short of a full banking licence — and it passports across all 30 EEA member states.

What an EMI Licence Allows You to Do

An EMI-licensed entity can:

• Issue electronic money: Create digital wallets, prepaid cards, and stored-value accounts denominated in any currency
• Provide payment accounts: Issue IBANs (in SEPA jurisdictions) and hold client funds
• Execute payment transactions: Direct debits, credit transfers, card-based payments
• Process card payments: Act as an acquirer or issuer in partnership with card schemes (Visa, Mastercard)
• Offer currency exchange: Ancillary to payment services
• Passport across the EEA: A single licence allows you to offer services in all 30 EEA countries through freedom of services or establishment of branches

Core Requirements Under EMD2

Capital Requirements

• Initial capital: EUR 350,000 (Article 4, EMD2)
• Ongoing own funds: Calculated using Method D — 2% of the average outstanding electronic money over the preceding six months (Article 5, EMD2)
• Additional own funds for payment services: Calculated under PSD2 methods (A, B, or C) for non-e-money payment services

Safeguarding

Client funds must be safeguarded using one of two methods:

1. Segregation: Deposited in a separate account at a credit institution or invested in low-risk, liquid assets approved by the national competent authority
2. Insurance or guarantee: Covered by an insurance policy or comparable guarantee from an authorised insurer or credit institution

Safeguarding must be in place at all times. The segregated funds are ring-fenced from the EMI's own assets and are protected in the event of insolvency.

Governance and Personnel

• At least two directors: With demonstrable experience in financial services, payments, or technology. Both must pass fit and proper assessments
• MLRO: A dedicated Money Laundering Reporting Officer responsible for AML/CFT compliance
• Compliance officer: May be combined with the MLRO role in smaller firms
• Risk management: A documented risk management framework covering operational, credit, liquidity, and IT risks
• Internal audit: Required for larger firms; smaller firms may outsource

Jurisdiction Comparison

Lithuania

The Bank of Lithuania has become the most popular EMI licensing jurisdiction in Europe, having issued over 80 EMI licences since 2016.

Advantages:

• Streamlined digital application process via the Bank of Lithuania's portal
• Average processing time of 6 to 9 months
• Lower operational costs than Western European jurisdictions (office space, staff salaries)
• Direct access to CENTROlink, the Bank of Lithuania's SEPA payment system
• English-speaking regulatory team

Substance requirements:

• Physical office in Lithuania
• At least one director resident in Lithuania (two directors recommended)
• Local MLRO
• Minimum of 3 to 5 employees in Lithuania

Costs:

• Application fee: EUR 868
• Legal and consulting fees: EUR 80,000 to EUR 150,000
• First-year operational setup: EUR 200,000 to EUR 400,000

Malta

The Malta Financial Services Authority (MFSA) offers a well-established EMI licensing framework with a reputation for regulatory collaboration.

Advantages:

• English-speaking jurisdiction with Common Law legal heritage
• Strong regulatory reputation within the EU
• Established fintech ecosystem
• Favourable corporate tax regime (effective rate of 5% after refund mechanism)

Substance requirements:

• Physical office in Malta
• At least two directors resident in Malta
• Local compliance and MLRO functions
• Processing time: 9 to 15 months

Costs:

• Application fee: EUR 3,000
• Annual supervisory fee: EUR 5,000 to EUR 25,000 based on revenue
• Legal and consulting fees: EUR 100,000 to EUR 200,000

Ireland

The Central Bank of Ireland (CBI) is one of Europe's most respected regulators, and an Irish EMI licence carries significant credibility with banking partners and enterprise clients.

Advantages:

• Top-tier regulatory prestige
• Deep talent pool in financial services
• Strong banking relationships (AIB, Bank of Ireland, Ulster Bank)
• Attractive for companies targeting the UK and US markets
• 12.5% corporate tax rate (increasing to 15% for large groups under Pillar Two)

Substance requirements:

• Full Irish office with senior management
• CEO, Head of Compliance, and MLRO resident in Ireland
• Processing time: 12 to 18 months (one of the longer timelines)

Costs:

• Application fee: EUR 5,000
• Legal and consulting fees: EUR 150,000 to EUR 300,000
• Higher salary costs than Lithuania or Malta

The Application Process

Phase 1: Pre-Application (2-4 months)

• Draft the business plan including three-year financial projections, target markets, and product descriptions
• Prepare the programme of operations covering all regulated activities
• Engage legal counsel in the target jurisdiction
• Identify and prepare directors for fit and proper assessments
• Establish the legal entity in the jurisdiction

Phase 2: Application Submission

Key documents include:

• Completed application form
• Programme of operations and business plan
• Three-year financial projections
• Governance structure and organisational chart
• AML/CFT policies and procedures
• IT security and operational resilience documentation
• Outsourcing arrangements (if applicable)
• Proof of initial capital (EUR 350,000 in a bank account)
• CVs and personal questionnaires for all directors and qualifying shareholders

Phase 3: Regulatory Review (6-15 months)

The regulator will issue multiple rounds of questions (Requests for Information, or RFIs). Common areas of scrutiny include:

• Revenue model viability and capital adequacy under stress scenarios
• AML/CFT framework robustness, particularly for high-risk customer segments
• IT infrastructure security, penetration testing, and disaster recovery
• Outsourcing arrangements and the degree of control retained by the EMI
• Director experience and fitness

Phase 4: Authorisation and Launch

Upon licence approval:

• Register with the national AML authority
• Establish safeguarding accounts
• Connect to payment systems (SEPA, Faster Payments via agent)
• Obtain scheme membership or BIN sponsorship (Visa, Mastercard)
• Complete external IT audit
• Begin onboarding customers under the approved business plan

Passporting

Once licensed, an EMI can passport its services across the EEA through:

• Freedom of services: Notify the home regulator, which informs the host regulator. No physical presence required in the host state. Effective within 1 to 3 months
• Freedom of establishment (branch): Requires host state approval and a local presence. Timeline: 2 to 6 months

Post-Brexit, UK operations require a separate FCA authorisation. Passporting does not extend to the UK.

Common Pitfalls

• Underestimating capital needs: The EUR 350,000 is the regulatory minimum. Working capital for technology, staff, and banking setup typically requires an additional EUR 500,000 to EUR 1,500,000
• Director selection: Regulators reject directors without relevant financial services experience. Appointing a "nominee" director with no genuine role is a red flag
• AML deficiencies: Weak transaction monitoring or inadequate risk assessments are the most common reasons for application delays
• Banking: Securing a safeguarding bank account before or during the application is essential. Some banks will not open accounts until the licence is granted, creating a circular dependency

Key Takeaways

• An EMI licence requires EUR 350,000 initial capital and permits electronic money issuance, payment accounts, and card programmes across 30 EEA states
• Lithuania offers the fastest and most cost-effective path (6-9 months, EUR 300,000-500,000 total first-year cost)
• Ireland provides the highest regulatory prestige but takes 12-18 months and costs significantly more
• Malta offers a middle ground with favourable tax treatment (effective 5% corporate rate)
• Total realistic budget for launch is EUR 750,000 to EUR 2 million including regulatory capital, legal fees, technology, and first-year operations
• Passporting allows EEA-wide operations from a single licence, but UK market access requires separate FCA authorisation