Payment institution in Lithuania
Payment institutions are like special banks 💼 that help people and businesses send and receive money 💸. They need permission 📜 from financial leaders to work. They can help you transfer money 💵, change currencies 🌍, or use electronic money 📲. They also have tools 🛠️ to stop fraud and manage data 💽. These institutions are great for quick online payments 💻 and help those who don’t use regular banks 🏦.
💳 Set up payment institution in Lithuania with Eesti Consulting
🤔 Payment institution or EMI License called?
The electronic money institution, often referred to as an EMI license or E-money license 💳, is a regulated financial institution designed to offer services connected to electronic money and payments. Holding the full E-Money license means there’s no expiry date and no restriction on the type of activity. When a company secures a license as an electronic money institution in Lithuania 🇱🇹, it gains the freedom to serve across the European Economic Area (EEA) without needing extra approvals in other EU nations. In essence, once licensed in Lithuania, the institution can expand its services to other EEA countries by opening branches there 🌍.
Services that need a license in Lithuania 🇱🇹
🔹 Depositing money into a payment account and managing that account.
🔹 Withdrawing cash from a payment account and all related tasks to manage that account.
🔹 Carrying out payment tasks, like transferring funds between different accounts, whether they’re with the same provider or a different one. This includes one-time payments, using payment cards, or setting up regular transfers.
🔹 Completing payment activities where the user has a credit line. This encompasses direct one-off charges, transactions via payment cards, or setting up repeated transfers.
🔹 Giving out or receiving payment tools.
🔹 Managing money transfers.
🔹 Handling payments where users approve transactions using phones, computers, or other digital devices. The tech or telecom company only acts as a go-between, connecting the seller of a product or service with the buyer.
Share Capital Requirements for EMI, PSP, and E-Money Licenses” 📈
| Share capital | Conditions |
| >= 20 000 € | Not less than EUR 20,000 if the payment institution intends to provide only money transfer services – transfers – “money transfer services” |
| >= 50 000€ | Not less than EUR 50,000 if the institution intends to provide payment initiation services |
| >= 125 00 € | Not less than EUR 125,000 if the institution will provide services from the following catalog* |
- 🏦 “Service allowing money deposits into a payment account and all necessary operations to manage it.”
- 💵 “Service that facilitates cash withdrawals from a payment account and all essential tasks to run that account.”
- 🔄 “Payment activities, which include fund transfers to accounts either within the same institution or to another payment service provider. This covers direct debits, transactions via payment cards, and setting up regular transfers.”
- 💳 “Transactions where the money comes from a user’s credit line. This includes one-time direct debits, card transactions, and regular transfers.”
- 🛍️ “Issuing or acquiring payment tools and handling payment transactions.
Authorization Process for Payment License in Lithuania” 🇱🇹📜
The Bank of Lithuania 🏦 takes an open approach to authorising payment institutions and other entities, initiating the journey even before the formal application lands on their desk. For those considering obtaining a license, the Bank advocates for early engagement 📆, offering a platform to understand which financial activities necessitate licensing. Early discussions set the stage for a comprehensive understanding of the roadmap ahead – detailing procedural steps 📋, critical requirements, potential challenges, and the Bank’s expectations 🎯.
The heart ❤️ of the authorization procedure is the submission of an application to the Bank’s Supervision Service. This step is accompanied by a rigorous review 🧐 of the submitted materials. Although the aim is to conclude this review within a three-month window ⏳, the need for supplemental data or documentation might necessitate additional time. Once the assessment reaches its conclusion, the Bank of Lithuania’s Board takes the reins, deciding the fate of the application – to grant the coveted license 📜 or not.
Step-by-Step Guide to Obtaining an EU E-Money License in Lithuania” 🇪🇺📜🇱🇹
STEP 1️⃣ COMPANY REGISTRATION
- Certificate of incorporation
- Power of attorney ( notarial deed)
- Register of shareholders
- Drafting of the articles of association
- Beneficial owners list
- Technical documentation of new fintech company
- Company income statement over the last few years
- UBO income statement for the last few years
- Directors of the company
- CV and professional experience
- AML certificates
- Current procedures regarding company wallet accounts
STEP 2️⃣ FILLING OUT APPLICATIONS
- Fintech business plan
- Company organizational structure
- IT security – schemes
- Financial forecasts in the form of schametes
STEP 3️⃣: FINANCIAL DOCUMENTS
- Opening a bank account
- Registration for VAT
- Contract for accounting and financial statements
- AML KYC CTS training
- Risk management
- Meeting with bank representatives
11 Advantages of Obtaining a PSP License in Lithuania” 🇱🇹🔑
1️⃣ Welcoming Non-Residents 🌍: Lithuania doesn’t mandate the company’s management board to be its residents.
2️⃣ Post-License Company Registration 📜⏭️🏢: Begin forming your company only after securing the license.
3️⃣ License First 📝: Submit the license application even before company establishment.
4️⃣ English Proficiency 🇬🇧: Documentation can be prepared entirely in English.
5️⃣ IBAN Access 🌐: Customers enjoy access to the IBAN system, receiving their own IBAN accounts.
6️⃣ PSD2 Ready 🔗: Embrace PSD2 to offer payment initiation service (PIS) and account information service (AIS).
7️⃣ Remote KYC & AML 🖥️✅: Use advanced tech for remote customer verification, like the systems used by Paysera or Mistertango.
8️⃣ SEPA Access 💶: Direct entry into the single payment area in EUR within the SEPA framework.
9️⃣ EU Gateway 🚪🇪🇺: Operate across the European Union with a single Lithuanian-issued license. Fun fact: Google has a license from Lithuania!
🔟 Grace Period for Newbies ⚖️🚫: No financial penalties during the first year for minor infringements by new businesses in the regulated sector.