What Is Electronic Money Institution (EMI) and How to Obtain It


Electronic Money Institution (EMI) is one of the most sought-after licenses for people interested in starting and running their own financial services company. Obtaining the license is no easy task. It involves a lot of documentation, time. Read on to learn more about the process.

What is Electronic Money Institution (EMI)?

Electronic Money Institution (EMI) is basically a term for an entity that is registered in relation to the usage of electronic money. To put it into simpler terms, Electronic Money Institution accepts e-money from one person or business and gives out e-money to another individual or business. Now that we learned what EMI exactly is, let us see how to obtain it.

How is Electronic Money Institution (EMI) Obtained?

Some countries in the Baltic region of Europe require a license to operate an Electric Money Institution. To acquire an EMI license Lithuania, in particular, the applicant is obligated to abide by certain requirements (e.g. approved capital, legal entity) and to submit a collection of documents to the Bank of Lithuania.

Another crucial thing you need to do before applying is to verify that you fulfill the criteria of the regulator. For instance, you would need to guarantee that your administration and staff, such as directors, are situated in Lithuania. You will also need to show via your proposal that you have the necessary funds to manage your enterprise. This usually requires adequate monetary, administrative, personnel, and resources to manage your venture.

The Bank of Lithuania requires companies to meet a set of criteria before granting them access to provide supervised financial services. When an applicant entity sends an application for permission, the Bank of Lithuania checks their business strategies, risks, expenditure, capital, processes, regulations, and its staff.

Initial Capital Requirement to Obtain EMI

The amount of initial funding required is at minimum €350,000. You would need to show that you have such funding available or offer adequate proof that it will be available before  authorization. In this way, you would appear credible when obtaining your own EMI.

Documents, Regulations, Protocols for Obtaining an EMI

The following are required to be submitted during the evaluation process of obtaining an EMI. They include:

  • Initial capital
  • Program of operations
  • Safeguarding measures
  • Business plan
  • laundering controls
  • Ongoing capital
  • Governance arrangements, internal controls, risk management, and money
  • Qualifying holdings (shareholders)
  • Outsourcing arrangements
  • Structural organization

How Long Does it Take to Obtain AN EMI License?

Obtaining an EMI license takes time, especially in the Baltic region in Europe. The Bank of Lithuania should make the call within three months of receipt of an application, as it is normally done. In practice, it takes about four months to obtain a license for an EMI.

Pros of EMI

  • Electronic Money Institutions EMI, guarantee the safety of financial transactions, and they follow several government regulations.
  • EMIs are flexible. They offer different payment options.
  • EMIs are innovative which drives progress – this can only mean a good thing.

Cons of EMI

  • Restrictions in their number of transactions daily.
  • Commissions spent to complete transactions.

The Electronic Money Institution is one of the Financial bodies that helps in processing the transaction. They enhance ease of doing business online, and the swiftness of their transactions is an appeal. Although Electronic Money Institutions can’t necessarily move into the market for big companies, they seem to be a great option for smaller businesses that cater to people’s daily needs.