Lithuania Electronic Money Institutions (EMI)
can join the SEPA payment infrastructure
and offer their customers
accounts with IBAN codes

Cryptocurrency
Licensing Services

Establishing
an E-Money or Payment Institution in Lithuania
Introduction

Electronic money in the territory of the European Union is the customer’s monetary value, which is recorded and stored electronically on an electronic medium.

Electronic money is issued by the issuer upon receipt of funds from other persons in the amount not less than the issued monetary value and is accepted as means of payment by other organizations.

Obtaining a license for the creation of electronic money in any EU country makes it possible to provide various financial services throughout the European Union.

The license for the creation of electronic money allows you to connect to the Single Euro Payments Area, which allows you to make and receive payments in European currency at low prices and on the same terms anywhere in Europe.

Advantages of EMI License in Lithuania

Lithuania became a hub for many well-known electronic money institutions due to transparent and cutting-edge legislation, ease of doing business and its location. Main advantage of having EMI license in Lithuania are:

- The minimum amount of the authorized capital for the establishment of electronic money institution – 350 000 EUR.
- A license issued in Lithuania may be recognized in other countries of the European Economic Area (EEA). In other words, a license issued in Lithuania allows an electronic money institution to operate in other EEA countries after the notification procedure.
- Electronic money institutions can join the SEPA payment infrastructure and offer their customers personal accounts with IBAN codes.
- The license for the establishment of electronic money can be issued within 3 months (about 6-9 months faster than in other EEA countries).
- All license documents can be submitted in English.
- The Bank of Lithuania offers the opportunity to test a business idea in a real environment without obtaining full authorization (the “regulatory sandbox” mode). The main difference is that the establishment of electronic money, leading a limited activity, does not require a minimum equity capital.

Allowed Activities

The EMI license allows acting with a lot of services and propositions. Here is the list of allowed activities:
Receiving of SWIFT.
Issuance of IBAN accounts to clients of the institution.
Remote (via the Internet) opening accounts, both to individuals and legal entities.
Issuance of Visa or MasterCard payment cards linked to the customer's account.
Possibility to make payments with banks around the world in USD/EUR/GBP and other currencies.
The ability to accept payments from any international account in the SWIFT system.
Independent decision-making on making payments and opening accounts.
Possibility of opening correspondent accounts around the world.
Own AML department.
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:
Execution of direct debits, including one-off direct debits;
Execution of payment transactions through a payment card or a similar device;
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:
   - Execution of direct debits, including one-off direct debits;
   - Execution of payment transactions through a payment card or a similar device;
   - Execution of credit transfers, including standing orders.
Issuing of payment instruments and/or acquiring of payment transactions.
Money remittance.
Payment initiation services.
Account information services.
Issuing e-money and the provision of operational services and closely related ancillary services in respect of the issuing of electronic money or to the provision of payment services referred to in point.
Operation of payment systems.

Business activities other than issuance of electronic money, having regard to the applicable Community and national law, etc.

General review

1 Scope of activities
2 License package
3 Capital requirements
4 Organisational structure
5 Other mandatory positions
6 Shareholding structure
7 Incorporation of a private LLC
8 Licensing timeline
9 Joining SEPA-MMS

1 Scope of activities

Financial Service Pi License Emi License
Services enabling cash to be placed on a payment account and all the operations required for operating a payment account Yes Yes
Services enabling cash withdrawals from a payment account and all the operations required for operating a payment account Yes Yes
Execution of payment transactions, including transfers of funds, execution of direct debits, execution of payment transaction trough a payment card, execution of credit transfer Yes Yes
Execution of payment transfers where funds are covered by a credit line for a payment service user Yes Yes
Issuing or payment instruments and/or acquiring of payment transactions Yes Yes
Money remittance Yes Yes
Payment initiation service Yes Yes
Account information services Yes Yes
Issuing and redemption of electronic money No Yes
Opening of electronic money account No Yes
2 License package
Incorporation documents and payment of the initial capital
Business Plan (with financial forecasts for the first 3 years)
Programme of Operations (with draft General Terms & Conditions)
Description of Structural Organization

Description of Governance Arrangements and Internal Control
Description of Measures to Safeguard Clients Funds
Questionnaire of Operational Risk (covers IT, AML and outsourcing matters)
Shareholders’ & Managers’ documents
3 Initial Equity (Capital requirements)
EMI must have the minimum initial capital equal to at least EUR 350’000
Initial capital requirement for PI’ depends on the type of payment services provided:

EUR 20’000 (for money remittance service only)
EUR 50’000 (for payment initiation service and money remittance service, if relevant)
EUR 125’000 (for all payment services specified in “Scope of activities”
4 Organisational structure



Management Board

Mandatory body
At least 3 members to be elected up to 4 years period Education, qualification, management experience and impeccability of reputation will be assessed by the Bank of Lithuania
Each member will be required to provide: (i) questionnaire*, (ii) copy of ID document; (iii) noncriminal record certificate

CEO

Mandatory body
At the same time may be a Management Board member:
- Education, qualification, management experience and impeccability of reputation will be assessed by the Bank of Lithuania - CEO will be required to provide: (i) questionnaire*; (ii) copy of ID document; (iii) non-criminal record certificate

*NOTE: forms of the questionnaires are approved by the Bank of Lithuania and will be provided by TBA & Associates

Remember

At least one employee of EMI / PI should be Lithuanian.
It is advisable to nominate a local employee to the management level, i.e. CEO, Management Board or Deputy CEO (if any).
Local employee would be responsible for communication with the Bank of Lithuania and other local authorities.
5 Other mandatory positions

AML officer

Experience in ML/TF prevention required
Detailed CV to be submitted to the Bank of Lithuania
Lithuanian professional required

Internal control / compliance officer

Experience in internal control is required
Detailed CV to be submitted to the Bank of Lithuania Lithuanian professional required

Internal auditor

Internal audit related experience required
Detailed CV to be submitted to the Bank of Lithuania

Information security officer

Experience in IT required
Detailed CV to be submitted to the Bank of Lithuania

Execution of these functions could be outsourced subject to notification of the Bank of Lithuania.
6 Shareholding structure
Information and documents of the shareholders shall contain full disclosure up to natural persons directly or indirectly holding at least 10% in an EMI / PI or otherwise having a significant influence on the future EMI / PI
Each shareholder subject to the regulatory assessment will have to provide:

1) questionnaire*;
2) copy of ID document (for natural person) or copy of incorporation documents (for legal entities);
3) non-criminal record;
4) documents proving good financial standing:

For natural persons – income / tax declarations for the last 3 years, bank account statements, salary statements and other documents;
For legal entities – financial statements for the last 3 years)

If shareholder is a legal entity, its manager(s) will have to provide:

- questionnaire;
- copy of ID document;
- non-criminal record certificate

Qualification, education, impeccability of reputation and good financial standing of each shareholder will be assessed by the Bank of Lithuania

*NOTE: forms of the questionnaires are approved by the Bank of Lithuania and will be provided by Motieka & Audzevicius.
7 Incorporation of a private Limited Liability Company
A company seeking EMI/PI status may be incorporated prior to applying to the Bank of Lithuania or after obtaining the EMI / PI license.

Incorporation of the company requires the following:

Power of Attorney to be issued by the incorporator;
Incorporation documents (i.e. Act of Incorporation and Articles of Association) for a company to be incorporated;
Accumulative account needs to be opened with a local bank to pay the share capital;
Candidates to the management need to be selected;
Documents about the incorporator need to be collected;
Payment of the share capital shall be made

Incorporation of a private limited liability company may be performed without physical presence of the incorporator. Once the share capital is paid and the incorporation documents are signed and certified by a notary, the limited liability company may be registered with the Register of Legal Entities (notary and registration fees apply).
8 Licensing timeline
Submission of the notification to the Commission for Coordination of the Protection of Objects of Importance to Ensuring Nacional Security 4 weeks
Pre-licensing meeting with the Bank of Lithuania under the Newcomer Programme Optional
Drafting of the licensing documents Approx. 4 weeks *
Submission of the application for a license to the Bank of Lithuania 1 day
Assessment of the application for a license 3 months *
Adoption of the decision to issue a license by the Bank of Lithuania Incorporation of company that obtained a license Up to 5 business days
9 Joining SEPA-MMS

Approaching the Bank of Lithuania and expressing intention to join SEPA- MMS
Complying with ISO 9362:2010 (for BIC) and ISO 13616-1:2007 (for IBAN) standards
Opening an account with the Bank of Lithuania for keeping the financial collateral funds
Preparing of IT systems and testing with the Bank of Lithuania
Signing Adherence Agreement with the European Payments Council and system membership agreement with the Bank of Lithuania

Proposal for obtaining EMI license

Documents for Licensing as an Electronic Money Institution

- Articles of association;
- A program of operations;
- A business plan, including a forecast budget for the first three financial years which demonstrates that the electronic money institution is able to operate soundly and employs the appropriate internal control systems, procedures and resources;
- The evidence that the minimum size of the equity capital does not fall below the required amount;
- A description of the measures taken for safeguarding electronic money holders’ funds, and where payment services not relating to issuance of electronic money are to be provided, also a description of the measures taken (to be taken) for safeguarding payment service users’ funds;
- A description of the governance arrangements and internal control mechanisms applied, including administrative, risk management and accounting procedures;
- A description of the internal control mechanisms established in order to comply with obligations in relation to prevention of money laundering and terrorist financing;
- A description of the structural organization, including the intended use of branches, agents, natural or legal persons through which the electronic money institution intends to distribute or redeem electronic money or other entities to which activities will be outsourced, and a description of participation in payment systems;
- The data on the identity of persons holding qualifying holdings in the authorized capital and/or voting rights of the electronic money institution, the size of their holdings in the authorized capital and/or voting rights, also evidence of the suitability of these persons taking into account the need to ensure the sound and prudent management of an electronic money institution;
- The identity of directors, including the persons responsible for the management of the electronic money issuance activities of the electronic money institution as well as evidence that they are of good repute and meet the requirements set forth by the legislation;
- Data of an audit firm which performs audit or a certified auditor independently performing audits;
- The address of the registered office.
- Certain other documents, e.g. lease agreement of the premises, are also presented to the Bank of Lithuania when applying for a license. It should also be mentioned that the Directive 2015/2366 on payment services in the internal market (PSD2) (also applicable for e-money institutions) establishes additional requirements in relation to the documents and contents thereof. The requirements prescribed by PSD2 are yet to be transposed to Lithuanian legislation (the term of transposition into national legislation is 13 January 2018), nonetheless, the supervisory authority requires the documents submitted to be in compliance with the PSD2 and relevant guidelines.

Please note that most of the documents can be submitted in English language, thus, the translation costs are avoide

Scope of Services
Execution of incorporation of the Limited Liability Company
Procedures include following steps:

Verification whether the company‘s name or trademark is already not registered at the Register of Legal Entities or Patent Offices (in the Republic of Lithuania, European Union or World Intellectual Property Organisation);
Drafting of incorporation documents (Incorporation memorandum/deed/Power of Attorney, etc.) (in bilingual form LT-EN);
Assistance in choosing the company‘s registered office;
Opening the cumulative account of the company at the bank you prefer (to pay the contributions for the share capital of the company);
Preparation of the Articles of Association of the company (in bilingual form LT-EN)
Approving company documents by notary deed
Registration of company documents with Lithuanian Registrar
Preparation of documents for the securities accounts
Preparation of the employment contract with the general manager.

Process of Licensing of E-Money in Lithuania

The signed papers will be considered by the Central Bank of Lithuania no longer than 3 months from the filing date. The decision to issue a license for EMI will be made after consideration of the above documents within the same 3 months.

In case when there is to be identified any imperfections in the documents regarding the form of the document, as well as in their content, the controlling authority will request for the missing information, or corrected form according to regulatory requirements. In this case, considering period (3 months) is to be counted from the date when the last documents were filed.

The full-in process of licensing is taking the following activity into three stages.

Stage I

Signing and collecting the necessary documents;

Step № 1. Agreement signing for AEMI license

Step № 2. Information collection and conduct of KYC on beneficiary and directors:
    Certificate of incorporation
    Power of attorney
    Shareholder register
    Articles of association
    Details of Beneficial Owner(s)
    Technical documentation about the e-wallet
    Declaration of company’s income over the past few years
    UBO income statement for the last few years
    Information about directors
    CV
    AML certificates
    Current company wallet account procedures

Step № 3. Legal entity set-up (with Legal address registration, local phone number registration, rental of real estate for the directors and registration of local phone numbers for the directors);

Step № 4. Filling out preliminary forms:
    Regulatory Business Plan
    Organization structure chart
    IT control forms
    Financial forecast forms

    Note
     As per list of documents mentioned on item “Documents for Licensing as an EMI” above

Stage II
Registration of financial and reporting documentation

Step № 1. Application for VAT number & bank account opening;

Step № 2. Agreement signing with accounting firm;

Step № 3. Gap analysis and planning (it indicates the Company and its documents deep analysis);

Step № 4. Legal entity set-up with Banking account opening and the application preparation. It includes also:
Regulatory business plan review and sign off;
Risk management workshop;
Risk management and controls framework design and documentation;
Risk controls framework sign off meeting;

Step № 5. EMI / AEMI application pack completion and signing-off meeting.

Stage III
Applying for and obtaining an EMI license

Step № 1. Registration of the application for the license

Step № 2. Liaison and Decision of results from the National Bank.

Service fees

Execution of incorporation of the Limited Liability Company - EUR 2,250
Local Registered Office including exclusive local telephone number - EUR 1,800 annual
Licensing application services - EUR 28,500
E-money license fee payable to Central Bank of Lithuania - EUR 1,463

Atrium Practice

Our lawyers and financial services specialists at Atrium Legal Lab provide solutions to clients by combining the traditional legal fabric with new technologies.

Lithuania is undoubtedly and excellent option in the European Union, offering you extremely low tax advantages.

It provides all the advantages of all traditional financial centres and offers you the passporting rights to carry out all your payment services through whole European Union.

Atrium Legal Lab has a team of trained professionals to advise clients who wish to become a licensed Electronic Money Institution.

In particular, we welcome questions about the EMI Registration in Lithuania and are pleased to fully assist you.

We hope that this offer will meet your expectations. If you need any further information, please do not hesitate to contact us; we are more than glad to help.

Should you have an enquiry
You would like to discuss with us
You can either call or email us.

One of our Customer Representatives will be most pleased to help and assist you

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