Lithuanian EMI From Scratch
Regime Applicable to EMI
• Risk management and Equity requirements – Minimum equity capital of an EMI is at least EUR 350,000.
• EMI providing payment initiation and/or account information services must hold civil liability insurance – Minimum insurance amount is determined following the formula of the BoL but not less than EUR 50,000.
• EMI can keep clients’ funds for an unlimited time period.
• EMI must protect the clients’ funds in the one of the following ways: ensuring segregation of clients’ funds from institution’s own funds or by obtaining a relevant guarantee, a surety letter or an insurance cover.
• Once a license is issued, an EMI may passport its licence and operate in other EEA jurisdictions through a branch or under the freedom to provide services.
• EMI is restricted to dispose of clients’ funds in its business activities. EMI must use other funds in other business activities (e.g. lending).
EMI may issue e-money and provide the following payment services:
• Services enabling cash to be placed on a payment account as well as all the operations required for operating a payment account;
• Services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account;
• Execution of payment transactions, including transfers of funds on a payment account with the user’s payment service provider or with another payment service provider: (i) execution of direct debits, including one-off direct debits, (ii) execution of payment transactions through a payment card or a similar device, (iii) execution of credit transfers, including standing orders;
• Execution of payment transactions where the funds are covered by a credit line for a payment service user: (i) execution of direct debits, including one-off direct debits, (ii) execution of payment transactions through a payment card or a similar device, (iii) execution of credit transfers, including standing orders;
• Issuing of payment instruments and/or acquiring of payment transactions;
• Money remittance;
• Payment initiation services (subject to civil liability insurance);
• Account information services (subject to civil liability insurance).
Process of Application for an EMI License
• Incorporation of a limited liability company in Lithuania
• Application to the National Security Commission. The National Security Commission formed within the Lithuanian Government needs to approve the incorporator as being compliant with the national security interests. Process takes from 10 to 40 business days
• Candidates to the management bodies need to be selected
• Institution should prepare its business plan together with financial forecasts with the assistance of financial consultants (can be done in parallel together with the following stage – drafting EMI documentation)
• Institution, with the assistance of legal consultants, prepare the documents necessary for the licensing submission.
• An indicative term for such preparation would be 1 to 2 months
• License is to be granted within 6 months after submission of all required documents, !!!however!!!, extensions are possible (in 90% of cases). ditworthiness of services;
• Safe deposit box.
The institution is allowed to submit (together with the licensing package) information about its readiness to start payment operations on the day 1 when an EMI licence will be issued. Mainly, responsible staff must be employed, and all IT systems must be installed on the day 1 so as the applicant could expect getting passporting immediately after an EMI licence is issued. Formally, passporting takes up to 3 months from the day an application to passport is submitted to the Bank of Lithuania
Organizational Structure of EMI
Supervisory Council is an optional body of a company. If the Supervisory Council is formed, it must have at least 3 members. CEO and Board members cannot at the same time serve as Supervisory Council members.
The internal audit unit may as well be responsible to the Board or General Meeting of Shareholders, if the Supervisory Council is not formed.
Board is an obligatory body. Must have at least 3 members. One of the Board members can at the same time serve as a CEO.
Members must be of good reputation and have appropriate qualification and experience.
CEO/Deputy CEO must be of good reputation and have appropriate qualification and experience.
• Incorporation documents
• Information and documents on the shareholders
• Information and documents on the management
• Program of activities, the business plan and financial forecasts for the next three years
• Documents proving formation of capital and capital sufficiency calculations
• Description of the organizational and management structure, IT systems and processes, measures for protection of funds, etc.
• Internal rules and procedures
Minimum number of employees is 3. CEO or Deputy CEO must speak Lithuanian and reside in Lithuania so as the BoL could access him or her any time, as well as, compliance and AML officers must be Lithuanians and be qualified under Lithuanian laws so as to ensure that an EMI complies with law requirements after the EMI licence is issued. Together with the positions mentioned before, ISO should be presented to the BoL, however, this function can be outsourced and there are no residency/ language requirements.
To obtain an EMI license, minimum equity capital is to be calculated as a sum of minimum equity capital (EUR 350,000) plus operational costs of 12 months (subject to business model).
EMI should offer financial services in Lithuania (not just established here). It is expected that market participant should have 10 % of clients portfolio in Lithuania. Applicant should prove why its services are beneficial for Lithuanian market and why local users should choose the applicant‘s services.
• Full disclosure up to natural persons directly or indirectly holding at least 10% of the EMI’s shares, including information about companies controlled or managed by such persons within 10 years;
• Full disclosure of managers (i.e. board, supervisory council members, CEO) of all shareholders holding at least 10% of the EMI’s shares;
• Possibility to obtain a waiver narrowing the scope and number of documents about the shareholders (incl. UBOs);
• The waiver will not release from an obligation;
• To submit criminal records about shareholders, UBOs and managers thereof;
• To disclose information about UBOs.
An applicant of an EMI licence is allowed to submit (together with the licensing package) information about its readiness to start payment operations on the day 1 when an EMI licence will be issued. Mainly, responsible staff must be employed, and all IT systems must be installed on the day 1 so as the applicant could expect getting passporting immediately after an EMI licence is issued. Formally, passporting takes up to 3 months from the day an application to passport is submitted to the BoL.
Documents about shareholders must be submitted in original or notarized copies and legalized/apostilled. Documents may be submitted in Lithuanian or English languages. Documents in other languages need to be translated into Lithuanian.
Price/Fee: 110.000 EUR
Get Started with an EMI license
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