Electronic Money License in Europe 2025

European fintech companies disrupted the way people handle their finances, pioneering more convenient, safe, and secure electronic payment solutions for all people and businesses.

The e-money license is one of the most important facilitators in this regard, enables innovative technology across the spectrum of financial services, and ensures the integrity of the financial sector at large. Only with such a license will you be enabled to provide electronic money services to the vast and lucrative European market.

What is an Electronic Money License?

The e-money license, often referred to as an Electronic Money License or EMI license, is a regulatory license granted by the relevant financial authorities to each business that would want to issue electronic money, providing electronic money services defined under the E-Money Directive 2 (EMD2). Basically, electronic money is stored monetary value in electronic form issued on receipt of funds for making a payment transaction.

Licensees authorized to issue and administer electronic money are called Electronic Money Institutions, or in short, EMIs. Such a type of service provider will help their customers convert physical cash into electronic money, which one can safely keep in an e-wallet in order to make convenient payments. In case the balance in the e-wallet is low, then more and more cash can be converted into electronic money.

In general, there exist two kinds of EMI licenses—one is the Small Electronic Money Institution License, and another is the Electronic Money Institution License across various European jurisdictions. This would be relevant to cases of small businesses or fintech startups with limited operations to seek licensing in the form of a Small Electronic Money Institution License, while applicants whose scope of operation is wide should go for a regular Electronic Money Institution License.

Advantages of Owning a European E-Money License

Owning a European e-money license opens one to the following great amount of activities, including:

• Issue electronic money for the residents of European countries against different types of transactions.
• Hold customer funds in individual client IBAN accounts without time limit.
• Offer digital wallets or an electronic wallet.
• Arrange money transfers locally within the EEA and internationally.
• Access to electronic payment and direct debit. Currency exchange provided. Issues prepaid card for point-of-sale, online purchases, and ATM withdrawal. Offers P2P payments and transfers. Payment initiation. Account information service.
• In this respect, a European e-money license is indeed the cornerstone of the regional financial ecosystem in terms of driving innovation to extend financial inclusion to include access to the digital economy among those excluded by traditional banking services.

E-Money License vs. Payment Institution License

As noted, an e-money license allows the issuance of electronic money and also the electronic storage of customer funds that could be used to provide a wide range of payment services. In return, a Payment Institution (PI) License allows for providing similar kinds of payment services but does not allow the issuance of e-money or the storing of customer funds. Typically, getting a PI license involves lower capital requirements, whereas EMI licensees need to show higher capital and a possibility to secure electronic money and customer funds.

Trends in E-Money Market in Europe

In the period between 2023 and 2030, the growth of the global e-money market is going to be very high. The Fintech Industry of Europe is very well positioned both in terms of innovation and in terms of regulatory excellence. The funding was not as good as expected lately; however, there are some trends that went through those last years which will make the tough electronic money institutions prosper.

Trends in E-Money Market in Europe:

• The increasing use of mobile wallets and contactless payments is driven by consumers relying on their smartphones to make transactions.
• The demand for frictionless cross-border electronic money transfers keeps growing; thus, more innovative solutions to facilitate international transactions easily and at low cost.
• Inclusion of cryptocurrencies and stablecoins into the electronic money services as companies continue to explore these digital assets for payment solutions.
• Innovations in open banking initiatives further fuel the innovation in the e-money space by essentially sharing financial data and services between institutions.
• NEO-BANKS attract many with their user-friendly applications, lower fees, and truly digital-only experiences.
• Benefits of Getting an E-Money License in Europe

An Electronic Money License issued in Europe by a respectable regulator may bring manifold advantages, thus being useful for the growth of your business.

Key Benefits of a European EMI License:

• Access to SEPA: being the Single Euro Payments Area, this simplifies cross-border payments. It unites 36 European countries in a single market.
• The principle of passporting means an EMI license obtained in one member state of the EEA is valid in all the EEA countries – 27 EU countries, Iceland, Liechtenstein, and Norway – thus expanding your customer base.
• The grant of an EMI license from a reputable European regulator is a strong endorsement for compliance with a high degree of rigorous standards.
• Compliance is simplified and there are minimal legal uncertainties since the directives in the EU and also national regulations have clear legal frameworks set out.
• Cross-border payment services, in case of involvement in engaging with customers having international payment needs; access to and the possibility of using the SWIFT Network for secured, guaranteed, and standardized international money transfers.
• Access to the vibrant European fintech ecosystem, including partnerships with fintech companies, tech talent, and strategic alliances with financial institutions.

How Does European E-Money Regulation Work?

Licensing, compliance, and operation standards of the EMIs lie with the national financial authorities of the respective European countries. National measures may take different forms, but EU Directives bring clarity through harmonization in these fields to encourage innovation in electronic means of payment.

The EU’s Electronic Money Directive 2, commonly referred to as Directive 2009/110/EC, provides the legal framework in which e-money is issued within the EU. It provides, among other requirements, authorization, capital requirements, protection of funds, protection of customers, among others. In the light of evolving technological and regulatory developments, amendments have been done to EMD2.

The other very important regulation is the Payment Services Directive 2, PSD2—while, under Directive 2015/2366, it still deals basically with payment services but covers EMIs. PSD2 introduces strong customer authentication and allows access to the customer’s account information to third-party payment providers with the aim of fostering competition and further innovation in the area of payment services.

EMIs must also follow the requirement under the General Data Protection Regulation that the processing should be done on a legal basis and in a transparent manner, by principle of data minimization, and notification of an authority and concerned individuals in case of data breach, not being unduly late.

Being an EMI in Europe, you will have to also follow the regulations imposed by the 6th Anti-Money Laundering Directive. Thus, this directive, along with the previous directives, is a part of the fight against money laundering and maintaining the integrity of the European financial market. To this end, the directive provides that EMIs are obliged to record all transactions, ultimate beneficial ownership, and other essential information with complete accuracy and up to date, as well as maintain appropriate CDD and KYC measures.

Top European Jurisdictions for an E-Money License

In applying for a European EMI license, you need to identify the country from which you wish to get licensed and where you want to locate the base of your operation. Requirements and processes in respect of electronic payment licensing vary throughout the different European jurisdictions. Each case should be weighed in view of the national regulatory environment, market opportunities, your business model, your financial resources, and your operational structure. Some EU states create infinitely more favorable conditions given the EMI license duration and are worth your attention:

E-Money License in Lithuania

From the moment the UK left the EU, Lithuania has been the jurisdiction within the EU that gave the largest amount of licenses to payment and electronic money institutions, given that the Bank of Lithuania is quite progressive for a national regulator. The authority offers the possibility to submit documents in the framework of a simplified application procedure in the English language, which makes procedures more accessible to international applicants.

Following this direction, the Bank of Lithuania has opened a regulatory sandbox to fintech companies, given the name LB Fintech Sandbox, where they will be able to play freely with their innovative financial products under the wing and control of this authority. In any case, you will be able to reach more customers thanks to innovative features such as remote identification of customers by digital signature, electronic documents, and video communication. If that is not enough to convince, it may be sufficient to note that Lithuania is in 9th place in the International Tax Competitiveness Index of 2023. This acts as a pointer to the fact that compliance with national tax regulations will be easy, retain more profits, and focus on growth.

On the bright side, with an EMI license application in Lithuania, the good thing is that it does not require the residency of the company directors or board members in Lithuania or Europe, which attracts quite a few international entrepreneurs with brilliant ideas. For the citizens of non-EU or non-EEA countries willing to do business in Lithuania, it is possible to be offered a startup visa with a simplified application procedure for founders of the startups, employees, and their families. It gives a long-term residence in Lithuania and includes an opportunity for foreign entrepreneurs to be connected with a wide network of people and businesses all over the world.

Costs associated with the application for the e-money license in Lithuania:

• Initial capital – 350,000 EUR (no capital requirements exist if you are going to provide services in the Lithuanian market only)
• Application fee – 1,463 EUR

E-Money License in Cyprus

Cyprus also offers an attractive option for those companies willing to engage in EMI activities within Europe. Cyprus has a clear legal framework in response to relevant directives and regulations of the EU. The regulatory mechanism through which the Central Bank of Cyprus gives implementation to its function for overseeing EMIs in Cyprus is through. Considering the fact, Cyprus has a solid infrastructure of financial services: modern bank technologies, secure data centers, a stable banking system that would face no problem in granting licenses for the establishment of local banks and other financial institutions to partner with the so-called electronic money institutions. Its strategic location also allows easy access to markets in the Middle East, North Africa, and Europe, which can be considered an added advantage while pursuing international expansion.

Setting up an EMI license in Cyprus includes the setup of a firm under Cyprus law, a registered office, and management presence within the country. Although having no specific startup visa, there are several alternative residence permits possible, including a Category F Permit or joining the Cyprus Investment Program. In addition to physical presence and operational infrastructure, proper development of secure IT systems is needed for a fully licensed EMI opening in Cyprus, developing a proper risk management framework and proper customers onboarding tools. The actual licensing procedure is quite smooth and easy; of course, the preparation certainly requires some legal support, which we will be happy to provide to you.

Costs involved in the application for a Cypriot e-money license:

• Initial capital – 350,000 EUR
• Application fee – 5,000 EUR

E-Money License in the Netherlands

Cyprus also provides an exciting opportunity for those companies willing to perform EMI activities within Europe. This Cyprus has a non-ambiguous legal framework on the ground of the relevant directives and regulations of the EU: the regulatory mechanism through which the Central Bank of Cyprus develops its function for supervising EMIs in Cyprus confers it with implementation. In particular, there is quite solid infrastructure for financial services: modern banking technology, secure data centers, and a stable banking system which has no problem granting licenses for the establishment of local banks and other financial institutions that would partner with electronic money institutions. Its strategic location means access to the Middle East, North Africa, and Europe is easy—a further added advantage as you seek international expansion.

Setting up an EMI license in Cyprus also involves setting up a company under the law, including a registered office and a management presence in the country. While Cyprus has no specific startup visa, there exist a set of alternative residence permits: Category F Permit or through joining the Cyprus Investment Programme. Apart from physical presence and operational infrastructure, you would need to develop proper secure IT systems, a risk management framework, and customer onboarding tools for a fully licensed EMI to be opened in Cyprus. The very process of licensuring is quite smooth and straightforward; of course, the preparation requires some legal support definitely, which we will be happy to provide to you.

Costs associated with the application for a Cypriot e-money license:

• Initial capital – 350,000 EUR
• Application fee – 5,000 EUR

Malta E-Money License

During the years, Malta has actively promoted the establishment of fintech companies by maintaining an innovation-friendly climate and reducing bureaucratic barriers. It also grants certain incentives to local and foreign entrepreneurs. The MFSA is the only supervisory authority in Malta for financial services and has also introduced a robust and clear regulatory framework in relation to EMIs that can ensure certainty of regulation, effectiveness, and a genuine environment. You will also benefit from the Maltese regulatory sandbox, which allows you to market-test your innovative e-money service in a controlled environment without the immediate burden of full regulatory compliance.

On the other hand, setting up an EMI license in Malta requires a great number of preconditions, common for an EU country with a strong regulatory environment: this includes the setting up of a company under Maltese law and maintaining a physical presence within the country; implementation of effective internal AML/CFT procedures; being financially sound; and obtaining senior management approval who have residence and fit and proper criteria. Although the country does not have a startup visa system for entrepreneurs willing to establish fintech startups in this place, we can still assist you in applying for a Malta Individual Investor Program (MIIP), the Malta Residence and Visa Program (MRVP), or other sorts of permits.

Fees related to the submission of a Maltese e-money license application:

• Initial capital – 350,000 EUR
• Application fee – 3,500 EUR

E-Money License Requirements in Europe

You might have already guessed that most European countries will ask you to set up a local company under their national law and have a physical presence within their jurisdiction. It means that your organization will have to establish and observe proper compliance policies and procedures, arrange the protection of customer funds mechanisms, develop secure IT systems and data protection frameworks, have adequately educated and experienced senior management, and many other important criteria that would, as an end result, provide reliable operation with minimized risks.

The very same processes and requirements will need to be duly recorded and evidenced, so that the regulator of your chosen jurisdiction will be in a position to thoroughly review your company’s adherence to the established regulatory standards and provide assurance that the interests and security of your customers will continue to be well protected. While such countries as Lithuania allow the submitting of documents in the English language, elsewhere you will require certified translation services, which we can organize for you while you are attending to other pressing business needs.

Your EMI license application form will generally need to be accompanied by the following documents:

• Your company’s Articles of Association
• A business plan detailing your EMI’s proposed operations, target market, financial projections, risk management strategies, and other foundational information
• Documentation of AML/CFT policies and procedures
• Historical and projected financial statements, including balance sheets, income statements, and cash flow statements
• Reports from external auditors verifying your financial statements and compliance with regulatory requirements
• Proof of registered office in the jurisdiction where you’re seeking an EMI license
• Directors and other key personnel of the EMI: copies of their CVs showing their respective financial qualifications and relevant experience. Copies of directors’ and shareholders’ passports are also required. Evidence of no criminal record for all shareholders, directors, and other key personnel. Documentation on risk management policies and procedures that the EMI has put in place. Customer terms and conditions of your EMI.
• Proof that your EMI can satisfy the minimum capital requirement as stipulated by the regulatory authority
• Payment receipt of the application fee

Application Process for E-Money License

Although the step-by-step process for applying for an EMI license in Europe differs from one European country to another, there are some general steps that you will most likely have to go through in any jurisdiction of your choice. Also, consider that the times of processing applications themselves also vary and can take everything from three months up to almost a year, depending on such factors as how complete your application is and how many applications an authority may be dealing with.

Typical e-money authorization process would be:

• Preparatory work involving gathering all relevant information and documents required.
• Pay the filing fee prescribed by the regulatory authority of your desired jurisdiction. File, with the regulatory authority of your desired jurisdiction, an application form along with the prepared documents. The regulatory authority will then verify your application package for eligibility and may ask for additional information or supporting documentation.
• If your application is deemed complete, the vetting process will begin, and the authority may conduct an on-site inspection of the premises of your firm to check whether it has controls and infrastructure appropriate for it to operate as an EMI.
• If the on-site inspection is completed positively, and all the legal requirements are fulfilled, the authority will grant an EMI license for your company to start e-money operations.

Recommendations to Make Your Application Successful in Obtaining an E-Money License

If you want your application to progress as quickly as possible and succeed in obtaining an EMI license, there are certain aspects you should certainly take into consideration:

• Your application package should be complete and prepared in great detail in accordance with the relevant regulations, because no regulator can commence processing incomplete applications.
• Any information provided by you should be supported by strong evidence that could be verified by the regulator.
• Have a detailed check-list of national requirements of eligibility and make sure that you can tick such boxes as sufficient capital, segregation of customer funds, and physical presence.
• Let professional lawyers who have experience in the issuance of licenses for European fintech, like our team here at Regulated United Europe, secure an impeccable quality application package for your application.

If you wish to obtain an EMI license in Europe, our team here at Regulated United Europe will be delighted to support you in incorporating a company and applying for a license in a European jurisdiction that resonates with your business goals. Our dedicated specialists can also guide you through the acquisition of a ready-made company with an existing e-money institution license. With experienced lawyers, business development professionals, and financial accountants at your side, you will find the process of starting an electronic money business easy, seamless, and transparent. Contact us now to schedule a personalized e-money license consultation and set the stage for long-lasting success.

Also, lawyers from Regulated United Europe provide legal services for obtaining a Lithuania crypto license.