Obtaining an EMI license in Europe will allow an organisation to legally conduct cryptocurrency-related activities: making payments, opening digital wallets, and providing and engaging in e-currency transfers to foreign accounts. Since Lithuania is part of the European Economic Area, getting a permit in one of the countries that is part of the EEA is no longer necessary.
Key Points:
- An EMI license in Europe, especially Lithuania, authorises cryptocurrency activities; post-Brexit, Lithuania leads in issuing these permits within the European Economic Area.
- Lithuania’s Central Bank regulates EMI licensing, adhering to the EU Directive, with licensed companies benefiting from Lithuania’s membership in the SEPA unified payment area.
- Applicants must submit comprehensive documentation, including statutory papers, business plans, AML/KYC programs, and evidence of local operations.
- The licensing process involves an initial business plan review, a 3-month pre-licensing phase, a 6-month financial activity assessment, and a final 3-month infrastructure check, with key compliance requirements throughout.
What is an EMI (Electronic Money Institution) License
An EMI (Electronic Money Institution) licence is a regulatory authorisation granted to companies that allows them to issue and handle electronic money (e-money). E-money refers to digital representations of fiat currency stored electronically, often used for online transactions, prepaid cards, and other digital payment methods.
Companies holding an EMI licence can provide services such as electronic fund transfers, card payments, and money remittances, but they are distinct from traditional banks as they cannot offer interest or credit services.
Regulated by financial authorities, EMIs must adhere to specific standards to ensure the security and transparency of their operations.
What You Need to Know About EMI licensing
It is worth noting that it is possible to issue a permit that limits the territorial activities of the organisation – that is, you can work only within the country. After the UK left the European Union, Lithuania took the lead in the number of permits issued.
The regulatory authority for licensing in this country is the Central Bank, which is also a regulator. It is very loyal to organisations throughout the year from the date of its operation and very rarely fines for violations.
To control the activities of crypto firms, the regulator relies on the EU Directive – a set of legislative frameworks for crypto-currency activities. Your organisation’s submitted documents will be considered within three months. Still, it would be best if you were prepared because there may be requests for additional data.
This country is a member of the SEPA unified payment area, which includes several dozen countries of the world, so your company will be able to perform payment transactions within the jurisdiction of all these countries.
What Documents Have to be Presented to Regulators?
To begin consideration of licensing your organisation, the regulatory body must provide the required package of papers, which will include the following items:
- statutory papers: charter, details (including bank account), firm registration document, etc.;
- proof of payment of the contribution of the authorized capital to a bank account;
- passports of the founders and a certificate of no criminal record;
- developed AML and KYC programs;
- papers confirming the presence of an actual office in the territory of this country;
- a business plan that details financial activities with virtual currency, as well as the structure of your organisation;
- a program aimed at your organisation’s and clients’ financial security (accounting system, risk assessment administration).
If the required document package is exhaustive, you will be fine with licensing.
What Requirements do You Have to Meet?
This jurisdiction does not impose complex requirements for firms that wish to obtain a permit. First of all, your organisation must have a well-thought-out business plan and a large enough authorized capital to ensure the activity of the company for the next few months.
In addition, you must comply with AML and KYC regulations. This means that you must verify that clients notice suspicious activity.
If you find it difficult to understand these issues, you can visit AML Courses. Here experts will provide you with more information and answer questions you may encounter.
The Permitting Process Step by Step
To get permission, you need to go through several necessary steps:
- First, there will be an initial review of your organisation’s business plan based on the papers received, which will take approximately one month to review.
- Pre-licensing (up to 3 months), which includes the assessment of the enterprise infrastructure, the opening of a physical office, and the verification of all firm employees by the requirements for them. At this stage, your organisation is being formed, and a bank account is opened, which must contain an amount of at least 350,000 euros. At least four employees of your organisation must be present in Lithuania.
- It is followed by a detailed assessment of the planned financial activities of the company and the determination of the degree of its prospects. This review can take up to six months. Considered legal and financial documents, the governing program of management, the availability and quality of software, the submission of an application for permitting, and a document on payment of the state fee. Please note that IT support must comply with specific regulations for implementing AML and KYC policies.
- Checking the infrastructure of a financial company, which will last about three months. In such a check, it is determined how technically prepared the company is and whether it can work effectively in virtual currency.
Following all the recommendations and requirements, you will be fine with obtaining an EMI license in Lithuania.
You might also interested in obtaining a Crypto license from the Bahamas.