Getting an EMI license in Europe

The fintech industry keeps coming up with new technologies designed to simplify our lives. The advancements in technology brought to life yet another payment instrument – electronic money.

In this article we will overview the EMI license, highlighting its advantages and giving detailed information on how to obtain it in the EU.

EMI: what is it?

Electronic Money Institution (EMI) is any entity authorized to issue electronic money and quasi-money and make payments using those assets.

The process of getting the EMI license may take up to 6 months because institutions are subject to thorough due diligence by the regulator before acquiring this status.

Why is the EMI license necessary?

Companies holding the EMI license enjoy the same rights as traditional payment service providers. They can conduct online and offline payment transactions. These institutions set up accounts for clients their within their banking account, and are capable of creating e-wallets.

Customers exchange their cash for electronic money issued by the company and store the same in their e-wallets. Having those, customers can pay for goods and services with electronic money and make other payment transactions.

A company with the EMI license has larger opportunities to do business in Europe and beyond. Another advantage is the possibility to use the EMI license passporting service in the Eurozone.

Besides, there is a simplified option – a small EMI license, but it does not apply to all EU countries. Our experts are there to help choose a jurisdiction most suitable for your business.

How does one get the EMI license in the EU?

The main requirement for the EMI license is €350,000 of authorized start-up capital.

The above amount must be available in the company’s bank account throughout the authorization process. And the account must be set up in the same jurisdiction where one applies for the EMI license.

Prior to proceeding with the EMI license issue process, one needs to review carefully all the requirements of the regulatory authorities to avoid potential problems.

SBSB International Firm has an extensive portfolio of EMI license issue in various jurisdictions. Our lawyers will be happy to advise you on any matters related to obtaining the EMI license.

Peculiarities of getting the EMI license in the EU

In many EU countries the regulator conducts a due diligence of the applying company’s top management. The requirements include:

• at least two entity managers being residents of the EU
• confirmation of the management’s professional qualifications

Each jurisdiction may impose its own rules in addition to the commonly adopted and mandatory PSD2 Directive:

• availability of the relevant software
• risk management process
• AML policy
• safe customer identification procedures
• technological expertise
• separate customer account
• accounting and external audit obligations
• clear shareholder requirements
• operations risk management

SBSB lawyers have been obtaining the EMI license in the EU for over 6 years now. We offer comprehensive fintech project services on a turnkey basis. Those range from jurisdiction selection for company incorporation, legal support and software design for payment systems to the ultimate project implementation. Join our Telegram chat to get a free online consultation.