A good idea, solid plan and innovative technologies can remain only that, if it’s not ‘blessed’ by the licence. Because e-money is pre-paid monetary value, the process of licensing it is more complicated than acquiring a regular banking licence. But it’s something that needs to be done – and done right. So, hiring professional services to do that will not only guarantee a smooth process but also will ensure that no unexpected licensing-related challenges will surface later on in the future.
Being the most important step of the strategy, we make sure that your plan is solid and covers all the key areas, targeting your business objectives and market expectations at the same time. The areas include marketing and communication strategy, funding and investments opportunities to competitors’ analysis and a detailed operational plan. Together with these significant factors, we also specialise in financial planning. It requires not only developing a strategy for the desired outcome but also preparing for the unexpected. In this way, we guarantee the plan execution success.
Acquiring a licence can be challenging – but we make it a seamless process and a pleasant experience.
Some things are better to be trusted in the hands of professionals and e-money licensing is one of those things. Leave it with TillForty professionals and we’ll take care of it all – from making sure that your business meets the criteria, to preparing the documentation, submitting application and supervising the entire process throughout and thereafter.
- Details of applicant
- Accompanying documents
- Shareholders & Capital
- Programme of operations
- Business plan
- Architecture scheme
- Onboarding procedures
- eKYC procedures
- Payment processors
- Banking platform
- IT data policy
- IT security policy
- Email policy
- Outsourcing policy
- Risk management methodology
- Internal control mechanisms
- Monitoring and tracking data
- IT system security
- Data breach incidents
- The collection of statistical data
Frequently asked questions
- Agreement signing for AEMI license
- 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
- AML certificates
- Current company wallet account procedures
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)
4. Filling out preliminary forms:
- Regulatory Business Plan
- Organization structure chart
- IT control forms
- Financial forecast forms
- Application for VAT number & bank account opening
- Agreement signing with accounting firm
- Gap analysis and planning (it indicates the Company and its documents deep analysis)
- 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;
5. EMI / AEMI application pack completion and signing-off meeting
- Registration of the application for the license
- Liaison and Decision of results from the National Bank.
To establish a favourable environment for Lithuanian and foreign startups, a special project for an EMI licence to engage in restricted activities has been implemented with the aim of facilitating access of new market participants to the Lithuanian market and later, after being granted a licence to engage in usual activities, to also the European Economic Area market. The basic difference between an EMI engaged in restricted activities and a traditional EMI is that the EMI engaged in restricted activities is not subject to the minimum initial capital requirement; however, a licence of an electronic money institution to engage in restricted activities is valid solely in the Republic of Lithuania. In order to be granted an EMI licence, it is necessary to hold a capital of EUR 350,000; however, this licence entitles to the provision of the electronic money issuance and redemption, distribution and payment services in other EU Member States as well after carrying out a notification procedure.
The approach of the Bank of Lithuania to the authorisation process for EMIs, as well as for other institutions, is, as far as possible, an open one and normally begins well before an application for an authorisation is submitted to it. We encourage all applicants who actively seek an EMI licence to contact us as early as possible so that we could discuss their planning process and help determine financial servisces that have to be licensed. This allows us to be clearer in explaining the authorisation process and its meaning, our requests, requirements, expectations and all other major aspects that may affect the authorisation process.
The following basic stages in the authorisation process can be singled out:
- submission of an application for an EMI licence to the Supervision Service of the Bank of Lithuania (hereinafter ‘Supervision Service’): the Supervision Service, within 5 business days, reviews whether all necessary documents have been submitted and, where no formal deficiencies are identified, accepts the application for consideration;
- assessment of an application for a licence of an EMI and attached documents: where the documents submitted have no deficiencies, the licence is issued within the shortest possible 3 month-term (for an EMI licence to engage in restricted activities – within a 2 month-term). Nevertheless, our experience shows that submitted documents in only exceptional cases do not contain deficiencies of some sort; therefore, the Supervision Service usually submits comments to the applicant for an EMI licence, asking to submit additional information or documents. In that case, the time limit for assessment is extended;
- issuance of a licence or refusal to issue a licence: after finishing assessment of submitted documents, the Board of the Bank of Lithuania analyses summary information submitted by the Supervision Service and takes a decision regarding the issuance of a licence or refusal to issue it.
The Bank of Lithuania, knowing that the legal acts regulating the authorisation process may not always be clear for both newcomers to the financial sector and experienced specialists, encourages applicants for a licence of an EMI to contact the Bank of Lithuania at an early stage. The Bank will provide more detailed information about the authorisation process and the requirements for prospective (existing) EMIs.
The representatives of firms who participated in pre-application meetings with representatives of the Bank of Lithuania more than once emphasised the benefits of such meetings, as they not only helped get the answers to the questions that arose, but also enter into a direct contact with specialists of the Bank of Lithuania. The aim of the initial meeting is to answer any questions that might have arisen in the pre-application stage and find out what licensed financial services the applicant is planning to provide or what type of licence it should seek. The attendees of such meetings typically include at least two specialists from the Supervision Service of the Bank of Lithuania (who typically answer questions about the authorisation process); however, any other, e.g. technical specialists may be required to attend as well.
During the pre-application meeting, the Bank of Lithuania aims at discussing the following:
- Who the applicant is and what kind of entity it will be?
- Who are the owners and/or major capital investors and what is their country of origin?
- How advanced or developed is the applicant’s proposition? In some cases it may be too early to have a meeting.
- Is the applicant part of a larger group?
- Who will be responsible for running the business?
- The applicant’s funding model.
- Details of the products/services, target markets, delivery channels, pricing policy, and the corresponding regulated activities that will be applied for.
- The EMI’s funding sources.
- Anticipated staffing levels.
- Key outsourcing arrangements.
It is our view that the process works well if the above information is provided to us in the form of a presentation ahead of the first meeting. We therefore urge prospective applicants to answer all the above questions before the anticipated meeting, i.e. to check whether all necessary information has been collected to be able to talk in detail in this regard and also to be prepared to be challenged on any aspects of their plans.
Prior to applying for an EMI licence it is necessary to pay into the account of the State Tax Inspectorate (STI) a state levy for the granting of the EMI licence, which currently is EUR 1,463 (the sizes of levies are established by Resolution No 1458 of the Government of the Republic of Lithuania of 15 December 20001). The EMI licence to engage in restricted activities is currently subject to a smaller levy (EUR 1,235). The procedure for the generation of online banking orders to the income collection accounts of the STI and the numbers of the income collection accounts are available on the STI website.
1 – Available only in Lithuanian.
Taking into account that, at the time of authorisation, the EMI being established or authorised must be prepared to comply with all requirements set for it, as an EMI in operation, the Bank of Lithuania requests that detailed data is submitted already at the time of application. Nevertheless, when assessing the critical aspects that may determine the authorisation of an EMI, the following basic elements can be singled out:
- fitness of submitted documents: the documents submitted must comply with the requirements of the legal acts regulating EMI activities and their supervision; all correct data established in legal acts or requested additionally must be submitted;
- compliance with the minimum capital requirement for EMIs: according to the provisions of the Republic of Lithuania Law on Electronic Money and Electronic Money Institutions, an EMI must possess a minimum initial capital of no less than EUR 350,000 and an EMI engaged in restricted activities is not subject to this requirement. The preceding 6 months’ average outstanding electronic money of the EMI to which a payment institution licence for restricted activities has been issued (where no activities are carried out, projected in a business plan) may not exceed EUR 900,000 per month, with the exception of the case specified in paragraph 7 of Article 12 of the Law. On exceeding this limit, the institution must, within 30 days of this fact coming to light, apply to the Bank of Lithuania for granting an EMI licence for unrestricted activities;
- fitness and propriety of the EMI and its shareholders or holders of voting rights: entities with a qualifying holding in the EMI’s authorised capital and/or voting rights must be able to ensure sound and prudent management of the EMI, have sufficiently high repute and be financially sound (the licence of an EMI to engage in restricted activities is not subject to the requirements for the fitness and propriety of shareholders or holders of voting rights);
- fitness and propriety of heads of an electronic money institution: the heads of an electronic money institution must be of good repute and possess the qualification and experience necessary to properly perform their duties.
- the operating plan must correspond to the possibilities of the EMI’s founders (shareholders or holders of voting rights) to implement it, while the prospective EMI must, at the time of authorisation, be prepared to provide financial services in a safe and sound manner.
It should be noted that, given the need to ensure sound and prudent management of the EMI, the EMI must have a detailed procedure for the management of electronic money issuance activity, adequate to the nature, scope and complexity of the EMI’s activities, including an organisational structure allowing to ensure the differentiation of functions and vertical as well as horizontal responsibilities with clearly defined, transparent and consistent limits of responsibility, a system for the identification, management, monitoring of risk which arose or may arise, a management information and internal control system, including reliable administrative measures and an accounting system.
All procedures, including documentation, legal and submission takes from 6 to 12 months.
What is EMI?
The Republic of Lithuania Law on Electronic Money Institutions (hereinafter ‘the Law’) lays down that ‘electronic money’ means a monetary value as represented by a claim on the issuer which is issued on receipt of monetary funds (hereinafter referred to as ‘funds’) by the electronic money issuer from a natural or legal person and has the following characteristics:
- stored electronically (incl. magnetically);
- is issued for the purpose of making payment transactions;
- is received by persons other than electronic money issuers.
Despite of many technical and legal advantages of Lithuania as jurisdiction, the main reason why so many new Fintech companies was established here is a huge transparency and proactivity of Lithuanian national bank.
National bank of Lithuania
As part of the Eurosystem, we cooperate with the European Central Bank and other euro area central banks to make decisions on euro area monetary policy and its implementation. To implement our vision, we set strategic directions that outline specific objectives and tasks to be achieved by the end of 2020. Our work, anchored by certain core values, not only benefits society but also contributes to enhancing the public’s trust in the national central bank and the domestic financial system.
“From the very beginning, my curious nature led me to dive deep into each stage of the process and try to figure it all out myself. After a while, I became really good at it – that’s when I’ve decided to share my knowledge and experience with others. This ability to be deeply involved with every aspect of the business – allowed me to become one of the bests in this field.”Sarunas StraseviciusCEO