EMI license in Cyprus

Located at the intersection of three continents – Europe, Africa, and Asia – the Republic of Cyprus (ROC) is referred to as Cyprus hereafter. It is the third largest and most populated island in the Eastern Mediterranean. The International Monetary Fund (IMF) categorizes Cyprus as an advanced economy and requires it to comply with all EU regulations as a member of the European Union (EU). Regulations and taxes are favorable.

In addition to USA Common Law, it is aligned with EU and international laws and regulations, as well as e-Justice, which is currently being implemented. A high tertiary education rate makes the Cypriot workforce one of the best educated in the EU. In addition to speaking English, over 75 percent of Cypriots do business in English.

Emi License In Cyprus

EMI license in Cyprus

A services-based economy, the country has over seven hundred registered accounting firms, among them the Big 4, 2,700 licensed lawyers, and 160 law firms. Financial services are booming in the country. A shipping registry based in Cyprus has the 11th largest merchant fleet in the world and the third largest fleet in the European Union. A third-party ship-management center located in Cyprus is the largest in the EU, and one of the largest in the world. The Cyprus government maintains fully-fledged offices and conducts international operations for a large number of ship-owning, ship management, chartering, and shipping related companies.

Further, Cyprus is establishing an advanced telecommunications network and infrastructure, including 5G, and is investing heavily in its digital transformation, both in the public and private sectors, as well as increasing its cybersecurity efforts. A long-term strategy and action plan are outlined for the period of 2035 that covers 242 initiatives covering various strategic objectives such as greener economy, world-class education system, diversification, and digitalization, among others.

Compared to the eurozone average, Cyprus experienced a milder recession due to Covid-19. The real GDP growth for 2021 is expected to be 5.7 percent, while growth in 2022 will be 4.1 percent.

There are many advantages to living and doing business in Cyprus, including the high standard of living, the low crime rate, the warm climate, the political stability within the region, and the friendly business environment.

Electronic Money Institutions (EMIs) can be set up in Cyprus for several reasons:

  1. All EU jurisdictions can be operated under one license under the passporting system.
  2. A licensed and regulated EMI can offer SEPA payment services if it is licensed and regulated by the Central Bank of Cyprus.
  3. As a crossroads between Europe, Asia, and Africa, Cyprus is an attractive location for companies with international customers.
  4. Cyprus has an incredibly business-friendly environment, thanks to its high level of development, low taxes, and highly skilled workforce.
  5. In addition to accessing the single market, Cyprus’ membership in the European Union provides companies with the freedom to move goods, services, and capital across the continent.
  6. Companies looking to keep overhead costs low will find Cyprus an attractive location because of its low operating costs.
  7. In areas such as finance, technology, and marketing, Cyprus has a large pool of highly educated and skilled talent.

What is an Electronic Money Institution?

Individuals and businesses can use prepaid cards, electronic wallets, and other types of electronic money issued by EMIs. Legal entities are responsible for disbursing e-money.

The electronic money issuer is responsible for issuing monetary claims against the issuer when funds are received in order to make a payment transaction, and a claim on the issuer is accepted by a natural or legal person other than the issuer.

This monetary value is stored electronically, including magnetically, and is issued upon receiving funds.

The concept of e-money refers to the storage of currency in bank computers that is backed by fiat currency. An electronic payment system is the electronic equivalent of cash.

The following activities can be performed by Electronic Money Institutions (EMIs):

  • For the purpose of placing electronic money into circulation, keep an electronic device readily available in which monetary value can be stored.
  • For the purpose of placing electronic money into circulation, maintain a readily accessible instrument for the distribution of electronic money,
  • Distribute electronic money for monetary value,
  • Electronic money should be distributed,
  • Incorporate electronic money into circulation,
  • E-money products to sell or resell,
  • Invest in electronic money products that already exist in the hands of electronic money holders,
  • Whenever they are not acting as payers to distribute electronic money to a person holding electronic money or purporting to hold it,
  • If an electronic money holder wants to redeem their electronic money, they can do so as follows:
  • Contact electronic money holders or potential holders as an employee or other representative of a third party.

What is an Electronic Money Institution License?

An electronic money institution (EMI) is a license that allows electronic money to be released. A company can use this method to deposit funds into forex accounts, top up electronic wallets, purchase virtual currency, and make payments to forex accounts.

You can also become an EMI institution with the license, which permits you to issue both individual and legal entities digital currency.

Without an electronic money institution, it would be impossible to create a virtual currency wallet, a third-party payment service, and other resources that use virtual currency.

Payment Institutions (PIs) cannot issue e-money. The primary difference between Electronic Money Institutions and Payment Institutions is that the former can issue electronic money while the latter cannot.

PIs and EMIs adopt different business models due to the differing legal treatment of payment accounts. Several jurisdictions will be able to grant EMI licenses in 2023, as discussed in this article.

Governments have implemented laws and regulations to protect consumers from potential risks associated with financial services. Financial services companies are required to meet specific standards set by the government of the region in which they wish to operate.

Different regulatory bodies issue EMI licenses in some jurisdictions. Businesses must research and comply with specific requirements before submitting their applications to regulatory authorities in their chosen jurisdiction.

EMI licenses must be applied for by companies wishing to issue electronic money. In other words, with an EMI license, a company can offer both licensed PI services and issue electronic money. An electronic money device or remote server consists of the digital equivalent of cash.

Prepaid goods and services and a limited network of goods/services under agreement with the issuer are not included in the definition of e-money. Companies can only apply for an EMI license if they are incorporated in Cyprus and provide at least part of their e-money and/or payment services in Cyprus.

Cyprus issues electronic money through the following institutions:

  • Financial institutions,
  • Other member state banks licensed by their designated authorities,
  • Financial cooperatives,
  • In accordance with relevant legislation, institutions that provide postal payment services and issue electronic money,
  • When not acting as monetary or other public authorities, the European Central Bank and the national central banks,
  • In their capacity as public authorities, member states, regional authorities, or local authorities,
  • Institutions that handle electronic money.

By the end of 2018, nearly 13 billion EUR had been reported by EMIs in the euro area. As of the beginning of 2011, this total was four times greater.

Regulatory requirements

EMI license in Cyprus It is the Electronic Money Laws of 2012 and 2018 (”the Law”) which regulate the provision of electronic money services in the Republic of Cyprus (the “Republic”). This law enacts the following directives from the European Parliament and Council into national law:

Electronic money institutions need to pursue their business and be prudently supervised under Directive 2009/110/EC of 16 September 2009.

The Second Payment Services Directive (also known as PSD2) was adopted by the European Union in 2015.

It is necessary to obtain an authorisation from the Central Bank of Cyprus (the “CBC”) or from any member state of the European Union (EU) before providing electronic money services in the Republic, based on the right to establish and free provision of services, as specified in the Law.

Electronic money institutions may only be authorized by the CBC if they are legal entities incorporated in the Republic where they are required to have their headquarters and registered office and if at least part of their business involves electronic money service and/or payment services that are not related to its electronic money issuance.

As a result of the Provision and Use of Payment Services and Access to Payment Systems Laws of 2018 to 2023, an application for authorization as an electronic money institution must be submitted to the CBC along with all the information referred to in subsections (3) to (8).

In accordance with section 4A of the Law, these subsections apply proportionately to electronic money institutions.  It is noted that the application must include a receipt of the payment of the relevant application fee which should be deposited in the account – “APPLICATION FEES” with IBAN CY65 0010 0001 0000 0000 0772 3042.

In order to obtain approval as an electronic money institution, the European Banking Authority issued guidelines (EBA/GL/2017/09), which are fully adopted by the CBC. These guidelines specify what information should be disclosed to the relevant authorities when submitting an application.


It is also known as the European Union Directive 2009/110/EC, or the “Electronic Money Directive.” It establishes a legal framework for the issuance and management of electronic money (e-money) in the European Union.Consumers who use e-money products and services are protected by this directive, which ensures a level playing field for all e-money issuers.

EMIs are required to meet the following requirements under the Directive:

  1. To ensure their financial stability, EMIs must maintain a minimum level of capital. A €350,000 capital requirement is currently in place for Cyprus.
  2. In order to operate, EMIs must obtain a license from their home country’s regulatory authority and comply with all applicable laws.
  3. Protection of consumer interests: E-money institutions must provide consumers with information about the products and services they offer.
  4. Customer data and transactions must be protected with appropriate security measures by EMIs.
  5. In order to prevent e-money from being used for illegal purposes, EMIs must comply with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.

E-money services in the EU are regulated by this Directive, regardless of their home country, and applies to all EMIs operating within the EU. Consumers using e-money products and services are protected while all e-money issuers are ensured of a level playing field.


“Payment Services Directive 2” (PSD2) is also known as EU Directive 2015/2366. New rules are set out for payment services under this European Union (EU) directive. As a result of PSD2, payment service providers are able to compete more effectively and consumers are protected better.

PSD2 consists of the following provisions:

  1. Authenticating customers: PSD2 imposes strong customer authentication (SCA) as a means of protecting consumers against fraud when making online payments.
  2. Providing new and innovative payment services is enabled by PSD2, which gives authorized third-party providers (TPPs) access to customer account information with their consent.
  3. Card interchange fees are limited under PSD2, which reduces the cost of cross-border payments.
  4. Enhanced consumer protection: PSD2 makes payment service providers responsible for informing consumers about their rights and obligations.
  5. To protect customer data and transactions, PSD2 requires that payment service providers implement appropriate security measures.

The PSD2 directive aims to create a level playing field for payment services in the EU, increase competition, and protect consumers. It has a significant impact on the payment services industry, since it applies to all providers of payment services in the EU.

How to get an EMI license in Cyprus

There are several steps involved in the process of applying for an Electronic Money Institution (EMI) license in Cyprus:

  1. The first step in preparing an application is to gather all the necessary information and documentation, including a business plan, financial projections, and due diligence reports.
  2. Application Submission: The Central Bank of Cyprus, which supervises and regulates EMIs in Cyprus, receives the completed application along with all supporting documents.
  3. In order to determine whether the applicant meets the eligibility criteria and regulatory requirements for an EMI license, the Central Bank of Cyprus will review the application and supporting documentation. It usually takes several months for this process to be completed.
  4. The Central Bank of Cyprus may inspect an applicant’s facility on-site if the application is approved, to verify that the company has the necessary systems, controls, and infrastructure for operating as an EMI.
  5. EMI licenses are issued by the Central Bank of Cyprus upon successful completion of on-site inspections and compliance with regulatory requirements.

EMI license applications in Cyprus are complex and require substantial resources, including expertise in electronic payments and regulatory compliance expertise.

Documents needed

  1. An operating program describing, among other things, how electronic money will be issued and the type of payment services that will be offered
  2. The business plan should include a forecast budget calculation for the first three years in order to demonstrate the applicant’s ability to operate effectively.
  3. At least EUR 350.000 in initial capital must be held by the legal entity seeking authorization
  4. An overview of the measures taken to protect users’ funds when using electronic money
  5. Describe the applicant’s governance arrangements, internal control mechanisms, including administrative, risk management, and accounting procedures, in order to demonstrate that these governance arrangements, control mechanisms, and procedures are adequate, sound, proportionate, and appropriate.
  6. An explanation of the internal control mechanisms established by the applicant to meet its obligations regarding the Information on the Payer accompanying transfers of funds under the Laws of 2007 and 2010 on Prevention and Suppression of Money Laundering Activities, as amended or replaced.
  7. It is essential that the applicant describes whether they plan to participate in a national or international payment system, whether they intend to outsource operational activities, whether they intend to use agents or branches for distribution or redemption, and if they intend to use natural or legal persons for distribution and redemption of electronic money.
  8. The identity of the persons directly or indirectly controlling the applicant, as well as the identities of the natural persons who hold shares or voting rights in one or more legal entities under the control of the applicant. As well as details regarding the size and suitability of those individuals, keeping in mind the need to ensure the sound and prudent management of an electronic money institution.
  9. The identity of directors and persons responsible for the management of the electronic money institution and, where relevant, persons responsible for the management of the issue of electronic money and the provision of payment services activities, as well as evidence that they are of good repute and possess appropriate knowledge and experience to issue electronic money and perform payment services, and in particular copy of clean criminal record report, no bankruptcy report, description of professional and academic qualifications, managerial or board positions held in other legal persons, previous employments and experience in the issue of electronic money and the provision of payment services Licensing and supervision of Electronic Money Institutions
  10. A statutory auditor’s identity
  11. A description of the applicant’s legal status and articles of incorporation
  12. Applicants’ headquarters address
  13. Drafts of contracts between electronic money issuers and holders, as well as drafts of framework contracts
  14. Sensitive payment data is monitored, tracked, and restricted
  15. Instances of security incidents and customer complaints related to security should be monitored, handled and followed up on in a timely manner
  16. The electronic money institution’s security policy should include a detailed risk assessment and a description of its IT systems.


As soon as the applicant submits the application package, the CBC examines it and may ask for additional details and clarifications. Responses are usually scheduled within a certain period of time. Conditional licenses are given to companies when the CBC approves their applications.

CBC must respond to the application within three months of the date of the application, according to the Law. Once the application is complete, the three-month period begins.

The timeframe will start counting only after the CBC is fully satisfied with the answers to any follow-up questions. Therefore, it is expected that the conditional license will take between 6 and 9 months to complete and will be subject to the approval of the ultimate beneficial owner.

Your business’s success can be determined by obtaining an EMI license. It’s not an easy task, so make sure you seek legal assistance from our team at Regulated United Europe who will be happy to help you incorporate a company and apply for an EMI license.

You will find that starting an EMI business in Cyprus is efficient, seamless, and transparent with experienced lawyers, business development professionals, and financial accountants by your side. Set the stage for long-lasting success by contacting us now for a personalized EMI license consultation.


“Are you contemplating the initiation of your business in Cyprus? This might be an ideal opportunity for you. Contact me today, and let’s engage in a thorough conversation regarding your project.”


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Due to its location at the intersection of three continents - Europe, Africa, and Asia - this text refers to Cyprus as the Republic of Cyprus (ROC). Eastern Mediterranean's third largest and most populous island. In its status as a member of the European Union (EU), Cyprus is considered a developed economy by the International Monetary Fund (IMF). The tax and regulation environment is favorable.

It also aligns with e-Justice, which is currently being implemented, as well as EU and international laws and regulations.Cypriots are among the best educated in the EU thanks to a high tertiary education rate. The majority of Cypriots not only speak English, but also conduct business in it.

Covid-19 caused Cyprus' recession to be milder than the eurozone average. According to forecasts, the real GDP will grow by 5.7 percent in 2021 and 4.1 percent in 2022. In addition to its high standard of living, low crime rate, warm climate, political stability within the region, and friendly business environment, Cyprus offers many advantages for those who want to live and do business there.

  • Passporting allows the operation of all EU jurisdictions under the same license.
  • SEPA payment services can be offered by licensed and regulated EMIs if they are licensed and regulated by the Cyprus Central Bank.
  • Cyprus is a convenient location for international companies due to its proximity to Europe, Asia, and Africa.
  • A highly skilled workforce, low taxes, and a high level of development make Cyprus a highly business-friendly country.
  • Cyprus' EU membership allows businesses to move goods, services, and capital across continents in addition to accessing the single market.
  • As a result of its low operating costs, Cyprus makes an attractive location for companies looking to reduce overhead.
  • There are a lot of highly skilled and educated individuals living in Cyprus, especially in the fields of finance, technology, and marketing.

Electronic money issued by EMIs is available to individuals and businesses. Disbursements of e-money are carried out by legal entities. When an individual or legal entity other than the issuer receives funds in order to make a payment transaction, the issuer is responsible for issuing a monetary claim against the issuer. In the case of receiving funds, this monetary value is stored electronically, including magnetically. Currency backed by fiat currency is stored on bank computers as e-money. Electronic payment systems are equivalent to cash in electronic form.

For example:

  • Keeping an electronic device with monetary value readily available in order to place electronic money into circulation.
  • Maintaining a readily accessible instrument for distributing electronic money for the purpose of putting it into circulation,
  • Providing monetary value to electronic money,
  • Selling or reselling e-money products.

  • Institutions of finance,
  • The designated authorities of other member states license their banks,
  • Cooperatives in finance,
  • Those institutions that issue electronic money and provide postal payment services must comply with relevant legislation.
  • European Central Banks and national central banks, when not acting as public authorities,
  • Authorities acting as public authorities, members of the EU, regional or local authorities,
  • Money-handling institutions.

A provision of electronic money services in the Republic requires authorization from the Central Bank of Cyprus (the "CBC") or any member state of the European Union (EU), based on the right to establish and the right to provide free services, according to the Law.

CBCs may only authorize electronic money institutions if they are legal entities incorporated in the Republic with a registered office and headquarters and if they provide electronic money services and/or payment services unrelated to the issuance of electronic money as part of their business.

  • A minimum level of capital is needed to ensure the financial stability of EMIs. Currently, Cyprus is required to have €350,000 in capital.
  • A license must be obtained from the regulatory authority of their home country for EMIs to operate.
  • Information about e-money products and services must be provided to consumers by e-money institutions.
  • EMIs should take appropriate security measures to protect customer data and transactions.
  • Anti-money laundering (AML) and counter-terrorism financing (CTF) regulations must be followed by EMIs in order to prevent e-money from being used illegally.

In addition to being known as PSD2, EU Directive 2015/2366 is also known as "Payment Services Directive 2". Payment services are subject to new rules under this European Union (EU) directive. PSD2 has improved consumer protection and increased competition for payment service providers.

By establishing a level playing field for payment services in the EU, increasing competition, and protecting consumers, PSD2 aims to achieve a level playing field for all. All EU providers of payment services are affected by it, which has a significant impact on the payments industry.

An application begins with gathering all the necessary evidence, including financial projections, business plans, and due diligence reports.

A legal entity seeking authorization must hold a minimum of EUR 350.000 in capital.

Yes. IT systems and a detailed risk assessment should be included in the electronic money institution's security policy.

E-money institutions (EMIs) are licensed to release electronic money. A company can use this method for depositing funds into forex accounts, topping up electronic wallets, purchasing virtual currency, and paying into forex accounts. The license also allows you to issue digital currencies for individuals and legal entities, so that you can become an EMI institution.

Virtual currency wallets, third-party payment services, and other resources that use virtual currency would not be possible without an electronic money institution.

The issue of e-money cannot be carried out by Payment Institutions (PIs). It is the ability of Electronic Money Institutions to issue electronic money that distinguishes them from Payment Institutions.

A difference in the legal treatment of payment accounts leads to different business models between PIs and EMIs. The article discusses the possibility of EMI licenses being granted by several jurisdictions in 2023.

CBC reviews the application package upon submission and may ask for further details and clarifications. It takes a certain amount of time for a response to be scheduled. The CBC approves applications for conditional licenses for companies.

The Law requires CBC to respond within three months of the date of the application. The three-month period begins as soon as the application is completed.

When all follow-up questions have been answered, the timeframe will start counting.It is therefore expected that the conditional license will take between 6 and 9 months to complete, and the ultimate beneficial owner will have to approve the application.

There is an immense amount of complexity in EMI license applications in Cyprus, as well as a substantial amount of expertise in electronic payments and regulatory compliance. If you need help incorporating a company and applying for an EMI license, contact Regulated United Europe for legal assistance.

When you have experienced lawyers, business development professionals, and financial accountants on your side, starting an EMI business in Cyprus is efficient, seamless, and transparent.

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