EMI License in Lithuania

Electronic money is a digital stored value that is issued against receipt of funds, held electronically, and accepted as a means of payment by persons other than the issuer. In practical terms, this covers the balances held in e-wallets, prepaid accounts, and similar instruments that businesses use to move money on behalf of their customers.

The Bank of Lithuania supervises all licensed EMIs on a continuous basis. It assesses applications, monitors ongoing compliance, enforces capital and governance requirements, and has the authority to revoke authorisation. Lithuania’s regulatory framework is aligned with the rest of the EU, which means the licence carries the same legal weight as one issued in Germany, France, or any other EEA state.

It is worth noting that EMD2 is in transition. The EU reached provisional political agreement on PSD3 in November 2025; the final texts were agreed in April 2026 and are progressing through formal adoption, with publication in the Official Journal expected around mid-2026. PSD3 will repeal EMD2 and fold EMI regulation into a unified payments framework, with the new rules expected to apply from around 2027 after a transition period. Existing EMI authorisations remain valid for 24 months after PSD3 enters into force (extendable to 30 months at the regulator’s discretion), so a licence obtained today provides a clear runway under the new rules.

A licensed e-money license Lithuania holder may carry out the following activities:

• E-money issuance — issuing, distributing, and redeeming electronic money stored in accounts or payment instruments held on behalf of customers.
• Payment services — the full range of payment services covered by PSD2, including credit transfers, direct debits, payment initiation, and account information services.
• SEPA payments via CENTROlink — Lithuanian EMIs have direct access to the Bank of Lithuania’s CENTROlink infrastructure, which connects to the pan-European SEPA payment systems (STEP2 and TARGET Instant Payment Settlement). This lets EMIs settle euro transactions in their own name without routing through a correspondent bank.
• Card issuance — issuing payment cards (debit or prepaid) linked to e-money accounts, including scheme-branded cards under Visa or Mastercard programmes.
• MiCA EMT eligibility — under MiCA (Regulation 2023/1114), licensed EMIs are one of only two entity types — alongside credit institutions — authorised to issue e-money tokens (EMTs) in the EU. A Lithuanian EMI therefore has a direct route to regulated crypto activity without requiring a separate VASP or token-specific licence.

EMIs may also carry out ancillary commercial activities, provided these do not compromise the institution’s financial soundness or regulatory standing.

The Bank of Lithuania issues two types of EMI authorisation. The distinction matters because the two licences differ significantly in capital requirements, operational limits, and the ability to passport into other EU countries.

Capital is the largest single line item. An unrestricted EMI licence requires €350,000 in paid-up share capital before the Bank of Lithuania will accept your application. A restricted EMI has no statutory minimum, but the regulator expects capital proportionate to your projected volumes — in practice, most restricted applicants budget €50,000–€100,000 in initial capital to satisfy the Bank’s expectations. This capital stays in your company (it is not a fee), but it must be available on Day 1.

Staffing and recruitment determine the gap between the mid-tier and premium packages. The Bank of Lithuania requires at least four locally based employees — an MLRO, a risk manager, a head of IT, and an executive director. If your team already has qualified candidates who can relocate or are based in Lithuania, the standard package covers candidate sourcing and shortlisting. If you need us to run full recruitment, handle employment contracts, and manage onboarding for your first year, the premium package includes that end-to-end HR support.

The package you choose reflects how much work your team absorbs versus what we handle. The restricted EMI package covers the core licensing deliverables — incorporation, application dossier, AML/CFT policies, and registered office. The unrestricted EMI package adds Newcomer Programme coordination, own-funds calculation advisory, and staffing support. The premium tier layers on dedicated senior consultant allocation, technical infrastructure setup, auditor coordination, and EU passporting activation — essentially a turnkey launch for operators who want to focus on product rather than regulatory logistics.

An unrestricted EMI licence issued by the Bank of Lithuania EMI supervisory team carries automatic passporting rights under EMD2 (Directive 2009/110/EC). Once licensed, you can passport into all 30 EEA states — the 27 EU member states plus Iceland, Liechtenstein, and Norway — through either freedom of services (FOS) or a branch. Notification processing takes up to 1–3 months under the statutory timelines set by PSD2 Article 28: the home regulator has one month, the host state a further month.

Lithuania is also one of the first EU jurisdictions to build a clear MiCA compliance pathway for EMIs. Under MiCA (Regulation 2023/1114), EMIs are one of only two entity types — alongside credit institutions — permitted to issue e-money tokens (EMTs). A Lithuanian EMI therefore covers both traditional electronic money and regulated crypto-asset issuance under a single authorisation.

The Bank of Lithuania operates CENTROlink, its own SEPA-connected payment system. Licensed EMIs can connect directly to CENTROlink and send or receive SEPA Credit Transfers and SEPA Instant Credit Transfers without relying on a correspondent bank. This eliminates the account-opening bottleneck that affects EMIs in many other jurisdictions, where obtaining a settlement account at a local bank is the single longest delay in going live.

Direct central bank connectivity also removes a layer of counterparty risk and reduces per-transaction costs compared to routing through a commercial bank intermediary. For payment businesses processing high volumes, this is a measurable operational advantage, not a marketing point.

The Bank of Lithuania runs a formal Newcomer Programme specifically for fintech applicants. Through the programme, you can meet with supervisors before filing your application, get written feedback on your business model and compliance framework, and identify document gaps before they reset your statutory review clock. No equivalent programme exists at most EU regulators.

• English-language process — the Bank of Lithuania accepts applications in English. All regulatory guidance documents, the authorisation requirements page, and the Newcomer Programme are published in English. You do not need a Lithuanian-speaking compliance team to prepare the filing.
• Statutory review: 3 months for unrestricted EMI, 2 months for restricted EMI — among the shortest binding review periods in the EU. The 5-business-day completeness check at submission keeps the clock predictable: if documents are complete, the review timer starts immediately.
• DORA compliance — DORA (Regulation 2022/2554) has applied to Lithuanian EMIs since 17 January 2025. The Bank of Lithuania has published ICT risk guidance aligned with DORA requirements, so supervisory expectations are well-documented rather than left to interpretation.

Lithuania’s tax and cost structure makes it viable to build genuine operational substance — the 4 local employees and physical office the Bank of Lithuania requires — without the overheads of a Western European hub.

• 17% corporate income tax (CIT) — the standard rate from 1 January 2026, applying to companies with revenue above €300,000.
• 7% CIT for small companies — applies if revenue does not exceed €300,000 (the 10-employee cap was abolished in the 2026 reform).
• 0% CIT for the first two tax periods — new small companies with revenue under €300,000 pay no corporate income tax for their first two tax years. This window covers the period when most EMIs are still building their client base.
• 0% dividend withholding tax to EU parents — under the Parent-Subsidiary Directive, dividends to a qualifying EU parent holding ≥10% of voting shares for ≥12 continuous months carry zero Lithuanian withholding tax. Standard rate of 17% applies where the directive conditions are not met.
• VAT-exempt core services — the Bank of Lithuania has confirmed that core EMI payment services are exempt from Lithuanian VAT under the EU financial services exemption. Ancillary services such as IT or consulting to third parties are taxed at the standard 21% VAT rate.
• Growing fintech cluster — Vilnius hosts over 200 licensed fintech companies, giving access to an established talent pool of compliance officers, AML specialists, and payment technology engineers familiar with EMI operational requirements.

The restricted EMI licence works best as a product-market-fit test. If your projected monthly e-money float stays well below €900,000 during the first year — typical for a pre-revenue fintech, a niche B2B payments tool, or an MVP wallet — the restricted route lets you enter the Lithuanian market faster, at lower capital cost, and with a lighter compliance burden. You can run the business legitimately, validate your customer base, and begin generating revenue before committing the €350,000 initial capital that an unrestricted licence demands.

Choose the unrestricted EMI licence from day one if any of the following apply:

• EU passporting is a core requirement — you need to onboard clients or operate in Germany, the Netherlands, France, or other EEA markets from launch.
• Volume projections exceed the caps — your e-money float will realistically average above €900,000 within the first six months of operation.
• Investors or partners require full regulatory status — some institutional partners and banking correspondents only engage unrestricted EMIs.

If you start on a restricted licence and later breach either threshold, Lithuanian law requires you to apply for the unrestricted licence within 30 days after the breach comes to light — not before, and not at the end of a reporting period. The Bank of Lithuania expects that application to be substantially complete, so it is prudent to prepare unrestricted-licence documentation in parallel once your volumes approach 70–80 % of the cap. Treating the upgrade as a planned milestone — rather than a reactive scramble — keeps the regulator on side and minimises business disruption.

An unrestricted EMI licence requires €350,000 initial capital paid up before authorisation — the statutory floor set by EMD2 Article 4. This amount must be fully subscribed and available at the time of application; the Bank of Lithuania verifies the source of funds as part of its fit-and-proper review.

A restricted EMI licence (also called a small e-money institution) carries no statutory minimum initial capital. This is a deliberate legislative exemption under EMD2, not a discretionary waiver by the regulator. Applicants must still demonstrate that capital is sufficient for the intended business, but there is no fixed euro floor to clear before the application is accepted.

Once licensed, an unrestricted EMI must maintain own funds that shall not fall below the higher of two calculations, as stated in EMD2 Article 5(1):

• The Article 4 floor — €350,000 at all times, regardless of business volume.
• The Article 5 calculation — 2% of average outstanding e-money over the preceding six months.

In practice, the 2% figure overtakes the €350,000 floor once average outstanding e-money exceeds €17.5 million. Fast-growing issuers must therefore project their own-funds requirements against planned float volumes and maintain a capital buffer above the threshold at all reporting dates.

Safeguarding obligations sit alongside the own-funds rules. An EMI must segregate client funds — either by holding them in a separate account at a credit institution or by covering them with an insurance policy or bank guarantee. Safeguarded funds are not the same as own funds and cannot be counted towards the own-funds requirement.

Government fees in Lithuania are fixed by Resolution No 1458 and are among the lowest in the EU for an institution authorised at national level:

The state fee is a one-time, non-refundable charge paid at submission. It does not cover the Bank of Lithuania’s ongoing supervisory fees, which are assessed separately on an annual basis proportional to balance-sheet size. Professional fees — legal, compliance, and consulting — represent the larger share of total project cost and vary depending on the complexity of the business model and the completeness of documentation prepared before filing.

A registered, operational office in Lithuania is mandatory — not a virtual address or a mail-forwarding service. The Bank of Lithuania conducts on-site inspections and expects to find staff working from the premises. The office must be sized and equipped to support the number of employees declared in your application.

• Lease agreement — a signed, long-term lease for dedicated office space (not co-working-only arrangements)
• On-site inspection — supervisors may visit unannounced before or after authorisation
• Operational substance — day-to-day management decisions must originate from the Lithuanian office, not a foreign parent

The Bank of Lithuania requires a minimum of four local employees across core control functions. Three roles are mandatory; one is strongly recommended. All staff must be Lithuania-based and qualified for their function.

The governing body must demonstrate independence, competence, and genuine oversight capacity. The Bank of Lithuania scrutinises board composition as part of the fit-and-proper assessment.

• Minimum board size — at least 3 members plus a CEO (the CEO may sit on the board but does not count toward the 3-member minimum)
• Resident director — the Bank of Lithuania expects at least one Lithuania-resident director; two resident directors is the preferred structure. This is a supervisory expectation, not a statutory mandate — but failing to meet it in practice weakens the application significantly
• Fit-and-proper assessment — every board member and the CEO undergo background checks covering financial crime history, professional competence, and reputation
• No conflicted roles — board members cannot hold positions that create material conflicts of interest with the EMI’s activities

The resident director requirement reflects the regulator’s broader insistence that decision-making authority sits in Lithuania, not in a remote holding company. Applicants who appoint a full board overseas — with only a nominal local presence — typically fail the governance review.

Lithuania imposes no residency requirement on shareholders. Beneficial owners can be located anywhere in the world. What the Bank of Lithuania does require is full transparency: the complete ownership chain must be disclosed, documented, and verifiable.

• UBO disclosure — all ultimate beneficial owners holding 10% or more must be identified and undergo fit-and-proper screening
• Source of funds — shareholders must demonstrate the lawful origin of capital contributed to the EMI
• Ownership structure — complex multi-layer holding structures are permissible but must be fully mapped; unexplained layers trigger additional scrutiny
• No residency barrier — foreign nationals and non-EU shareholders may hold majority or full ownership without restriction

The absence of a shareholder residency rule makes Lithuania attractive to international founders. However, ownership transparency requirements are stringent — incomplete UBO documentation is a common cause of application delays even when the underlying ownership structure is entirely legitimate.

Five EU instruments directly govern Lithuanian EMIs.

EMD2 remains the primary licensing statute for now. If your EMI intends to issue a euro-denominated stablecoin or any token pegged to a single fiat currency, MiCA’s EMT chapter applies on top of EMD2. You do not need a separate crypto-asset service provider authorisation for that activity alone.

At the national level, the primary instrument is the Law No XI-1868 on Electronic Money and Electronic Money Institutions. This law transposes EMD2 into Lithuanian law and defines the Bank of Lithuania’s supervisory powers over EMIs, including:

• Authorisation criteria — fit-and-proper requirements for shareholders and management, minimum initial capital thresholds, and program of operations
• Ongoing supervision — quarterly and annual reporting obligations to the Bank of Lithuania, supervisory levies, and on-site inspection powers
• Safeguarding rules — segregation of client funds in designated accounts or through eligible insurance, mirroring EMD2 Article 7
• Passporting notifications — procedure for notifying the Bank of Lithuania when exercising cross-border rights into other EEA member states

The Bank of Lithuania publishes implementing regulations and guidelines under Law No XI-1868 that set out detailed expectations on internal controls, AML compliance programmes, and outsourcing arrangements.

PSD3 abolishes the standalone EMI authorisation category and folds EMIs into the payment-institution framework. Key dates:

• 27 November 2025 — European Parliament and Council reached provisional political agreement on PSD3
• April 2026 — Council published final compromise texts
• End Q2 2026 — formal adoption expected, with entry into force approximately 20 days after publication in the Official Journal
• ~Q1 2028 — transposition deadline (18 months after entry into force for PSD3; the companion Payment Services Regulation has a separate 21-month transition); provisions become applicable across all member states

For businesses applying for a Lithuanian EMI licence now, PSD3 does not affect the current authorisation process. Your EMD2-based licence will remain fully valid throughout the transition period. Fintech Simple monitors the legislative calendar and will guide your firm through the re-authorisation process when the deadline approaches.

You pay CIT on your Lithuanian-source and worldwide profits at the rate that matches your company's size. Three tiers apply from 2026:

The 2026 reform extended the 0% introductory period from one year to two full tax periods, giving newly licensed EMIs a meaningful runway to reach profitability. The previous 10-employee cap that accompanied the small-company rate was abolished in the same reform, so the €300,000 revenue threshold is now the sole qualifying criterion.

Lithuanian VAT treatment mirrors the EU VAT Directive's financial-services exemption. Your core payment and e-money services are VAT-exempt, which means you do not charge VAT to clients and cannot reclaim input VAT on costs directly attributable to those exempt supplies. Where you generate VAT-taxable revenue alongside exempt revenue, you apply partial deduction rules.

• Core EMI / payment services — VAT-exempt. Includes issuance of e-money, execution of payment transactions, and account management directly tied to payment services.
• Ancillary services — 21% standard VAT rate. Applies to consulting, software development, IT support, and similar services provided to clients separately from the core payment product.

If your revenue mix includes both categories, work with a Lithuanian tax adviser to establish a defensible pro-rata input VAT recovery methodology before you invoice your first client.

Repatriating profits to a parent company is a central concern for group structures. Lithuania applies a 17% standard withholding tax (WHT) on dividends paid to foreign recipients from 2026 — but EU group structures can reduce this to 0% under the EU Parent-Subsidiary Directive.

To qualify for the 0% WHT exemption your EU parent must hold at least 10% of the voting shares in the Lithuanian EMI for a continuous period of at least 12 months. Both conditions must be met at the time of the dividend payment. If you structure your group before incorporation specifically to meet these thresholds, you can eliminate dividend WHT entirely — making Lithuania an efficient holding point for Central and Eastern European operations.

Licensed EMIs submit annual reports to the Bank of Lithuania covering financial statements, prudential data, and activity volumes. Quarterly prudential reporting is also mandatory for unrestricted EMIs. Failure to file on time — even by a few days — triggers supervisory escalation; late reporting is one of the most common pitfalls operators encounter.

Supervisory fees are levied annually and scale with activity volume and risk classification. Market estimates place the annual supervisory fee at €15,000–€80,000; however, the Bank of Lithuania does not publish a fixed public tariff, so treat this as an indicative range only — your actual fee will depend on your institution’s size, product mix, and risk profile. Budget conservatively and confirm the applicable rate with the Bank of Lithuania directly or through your legal counsel ahead of each billing cycle.

Lithuania EMIs are subject to the EU’s full AML/CFT framework. Your Money Laundering Reporting Officer (MLRO) must be a qualified, senior employee physically present in Lithuania — outsourcing the MLRO role to an external provider is not permitted and is a frequent trigger for supervisory action. Ongoing obligations include:

• Customer due diligence (CDD/EDD) — risk-based screening, enhanced checks for higher-risk clients, and periodic review of existing customer files.
• Transaction monitoring — automated and manual monitoring of payment flows, with documented escalation procedures for suspicious activity reports (SARs).
• Record-keeping — all KYC records, transaction logs, and compliance decisions must be retained for a minimum of five years and made available to the Bank of Lithuania on request.
• Staff training — annual AML/CFT training for all relevant personnel, with records maintained.

Since 17 January 2025, the Digital Operational Resilience Act (DORA) applies to EMIs operating in the EU. DORA mandates an ICT risk management framework, incident classification and reporting, digital operational resilience testing, and oversight of third-party ICT providers. Restricted-licence EMIs may benefit from proportionality provisions under Articles 5–15, but the core reporting and incident-management obligations apply to all in-scope entities. Ignoring DORA is not an option — the Bank of Lithuania treats ICT risk as a supervisory priority.

All Lithuania EMIs must commission an annual external audit of their financial statements by a qualified, independent auditor. Market estimates for this service range from €8,000 to €20,000 per year depending on the auditor, the complexity of your operations, and the volume of transactions reviewed — treat this as an indicative range, not a guaranteed quote.

Safeguarding client funds is a parallel, non-negotiable obligation. Client money must be held in segregated accounts at licensed credit institutions entirely separate from the EMI’s own funds. In Lithuania, the most commonly used banking partners for safeguarding accounts are SEB, Swedbank, and Luminor. Onboarding at these institutions is not automatic — banks conduct their own due diligence on EMI clients, and the process typically takes two to six months. Start safeguarding account applications well before your licence is granted to avoid a gap between authorisation and go-live.

• Substance drift — one of the most cited enforcement triggers. If key management relocates, decision-making migrates abroad, or local staff are reduced, the Bank of Lithuania will treat this as a breach of substance requirements.
• Safeguarding failures — commingling client and operational funds, even temporarily, constitutes a serious breach. Maintain clear account segregation at all times and document the reconciliation process monthly.