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How to get an Electronic Money Institution (EMI) license in Europe?

In recent years, the European financial landscape has experienced a significant shift with the rapid growth of electronic money institutions (EMIs). This has been fueled by the increasing demand for innovative and convenient digital payment solutions, as evidenced by the success of companies like Revolut and TransferWise. As a result, many entrepreneurs and businesses are looking to enter this lucrative market by obtaining an Electronic Money Institution license in Europe. In this comprehensive guide, we will walk you through the essential steps to successfully acquire an EMI license, including understanding the European licensing requirements, choosing the right jurisdiction, preparing a solid business plan, navigating the regulatory framework, assembling a strong management team, ensuring robust compliance and risk management systems, submitting a successful application, and maintaining and expanding your EMI license in the European market. By following these steps, you will be well on your way to launching a successful electronic money institution in Europe.


1. Understanding the European EMI Licensing Requirements

When it comes to obtaining an Electronic Money Institution (EMI) license in Europe, it's crucial to have a thorough understanding of the regulatory framework and licensing requirements set forth by the European Central Bank (ECB) and national authorities. Familiarize yourself with the Payment Services Directive (PSD2), which governs the provision of payment services and electronic money issuance across the European Economic Area (EEA). Additionally, consider utilizing tip sheets and guidance documents provided by regulatory authorities to ensure compliance with all necessary requirements. Keep in mind that each EEA member state may have specific rules and procedures for obtaining an EMI license, so it's essential to research and understand the local regulations and application processes in your target jurisdiction.


2. Choosing the Right Jurisdiction for Your EMI License

One of the most crucial decisions you will make when obtaining an EMI license is selecting the appropriate jurisdiction. Each European country has its own regulatory framework, requirements, and benefits, so it's essential to carefully evaluate your options. Consider factors such as the ease of doing business, tax rates, and the reputation of the regulatory authority in your chosen jurisdiction. It's also a good idea to consult with legal and financial experts who are familiar with the specific regulations in each country. Tip sheets and comparison guides can be helpful resources for identifying the most suitable jurisdiction for your EMI license application. Remember, choosing the right jurisdiction can significantly impact the success and growth of your electronic money institution.


3. Preparing a Comprehensive Business Plan for EMI Approval

Developing a comprehensive business plan is a crucial step in obtaining an Electronic Money Institution (EMI) license in Europe. The business plan should outline your company's objectives, target market, and strategies for achieving success in the competitive fintech landscape. Additionally, it should include a detailed financial forecast, demonstrating the viability and sustainability of your EMI business. A well-prepared business plan not only increases the chances of approval but also serves as a roadmap for your company's growth and development.

One of the key components of a successful EMI business plan is a thorough risk assessment. This involves identifying potential risks and challenges your EMI may face, such as regulatory changes, market fluctuations, and cybersecurity threats. By addressing these risks and outlining mitigation strategies, you demonstrate to regulators that your company is prepared to handle potential obstacles and maintain compliance with relevant regulations. However, it is essential to strike a balance between being overly cautious and overly optimistic, as both can negatively impact the perception of your business plan.

Another critical aspect of your EMI business plan is the operational structure of your company. This includes outlining the management team, organizational structure, and key personnel responsible for overseeing the EMI's operations. Demonstrating a strong and experienced team can instill confidence in regulators and increase the likelihood of obtaining the EMI license. Additionally, your business plan should detail the technological infrastructure and systems that will support your EMI's operations, ensuring that you can meet the demands of your target market and maintain compliance with regulatory requirements.


4. Navigating the European Regulatory Framework for EMIs

Understanding the complexities of the European Regulatory Framework for Electronic Money Institutions (EMIs) is crucial for businesses seeking to obtain an EMI license. The framework, which is primarily governed by the Revised Electronic Money Directive (EMD2) and the Payment Services Directive (PSD2), aims to create a level playing field for payment service providers and promote innovation in the financial sector. However, navigating this intricate regulatory landscape can be challenging, as it requires a thorough understanding of the various directives, guidelines, and national laws. On the positive side, obtaining an EMI license in Europe offers numerous benefits, such as access to a vast market of potential customers and the ability to passport the license across the European Economic Area (EEA). Conversely, the stringent regulatory requirements and the need for continuous compliance can be seen as drawbacks, potentially increasing operational costs and time-to-market for new services.


5. Assembling a Strong Management Team and Corporate Structure

Building a solid management team is crucial for the success of any Electronic Money Institution (EMI) license application in Europe. The management team should consist of experienced professionals with a proven track record in the financial services industry, as well as a deep understanding of the regulatory environment. A strong management team not only ensures smooth operations but also instills confidence in regulators and potential investors. However, assembling such a team can be time-consuming and expensive, as top talent often demands high salaries and benefits.

Establishing an effective corporate structure is equally important for EMI license applicants. A well-designed corporate structure should clearly define the roles and responsibilities of each team member, ensuring that all regulatory requirements are met and risks are properly managed. Additionally, a robust corporate structure can help attract investment and facilitate future growth. On the downside, creating and maintaining a complex corporate structure may require significant resources and ongoing administrative efforts, which can be a challenge for smaller organizations or startups.


6. Ensuring Robust Compliance and Risk Management Systems

Implementing a strong compliance and risk management framework is crucial for obtaining an EMI license in Europe. This involves:

  1. Establishing clear policies and procedures that cover all aspects of the EMI's operations, including customer onboarding, transaction monitoring, and reporting.
  2. Developing a comprehensive risk assessment that identifies and evaluates potential risks associated with the EMI's activities, such as money laundering, terrorist financing, and fraud.
  3. Implementing effective internal controls to mitigate identified risks and ensure compliance with relevant regulations, including the European Union's Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) directives.
  4. Appointing a qualified compliance officer responsible for overseeing the EMI's compliance program and ensuring adherence to regulatory requirements.
  5. Providing regular training to employees on compliance and risk management topics, ensuring they are well-equipped to identify and address potential issues.
  6. Conducting ongoing monitoring and audits to assess the effectiveness of the EMI's compliance and risk management systems and identify areas for improvement.

By demonstrating a commitment to robust compliance and risk management practices, EMIs can increase their chances of obtaining a license and operating successfully within the European market.


7. Submitting a Successful EMI License Application in Europe

Ensuring a seamless and efficient application process for an Electronic Money Institution (EMI) license in Europe requires thorough preparation and attention to detail. Applicants must be well-versed in the regulatory requirements and provide comprehensive documentation that demonstrates their compliance with the European Banking Authority (EBA) guidelines. This includes presenting a robust business plan, a clear organizational structure, and evidence of adequate capital and risk management measures. Additionally, it is crucial to engage with experienced legal and financial advisors who can provide valuable insights and guidance throughout the application process, ultimately increasing the likelihood of obtaining the coveted EMI license.


8. Maintaining and Expanding Your EMI License in the European Market

Once you have successfully obtained your Electronic Money Institution (EMI) license, it is crucial to maintain compliance with the regulatory requirements and continuously expand your presence in the European market. Regular audits and reporting are essential to ensure that your EMI remains in good standing with the relevant authorities. Additionally, staying up-to-date with the latest industry trends and regulatory changes will help you adapt your business model and maintain a competitive edge in the market. A compliance checklist can be a valuable tool in this process, as it allows you to track your progress and ensure that all necessary steps are taken to maintain your license.

Expanding your EMI license to other European countries can significantly increase your market reach and potential customer base. To achieve this, it is important to understand the specific requirements and regulations of each country you wish to operate in. This may involve obtaining additional licenses or partnering with local financial institutions. Furthermore, investing in localized marketing strategies and tailoring your services to the needs of each target market will help you establish a strong presence in the European market and drive the growth of your EMI business.


Frequently Asked Questions (FAQ)

1. What are the key benefits of obtaining an EMI license in Europe?

Obtaining an EMI license in Europe allows your business to operate across the European Economic Area (EEA) under a single license, simplifying regulatory compliance and reducing operational costs. It also enhances your company's credibility and reputation, attracting more customers and partners. Additionally, it enables you to offer a wider range of financial services and products, increasing your market reach and revenue potential.

2. How long does it typically take to obtain an EMI license in Europe?

The time it takes to obtain an EMI license in Europe varies depending on the jurisdiction and the complexity of your business. Generally, the process can take anywhere from 6 to 12 months, including the preparation of the application, submission, and regulatory review. It is essential to work closely with legal and compliance experts to ensure a smooth and timely licensing process.

3. What are the estimated costs associated with obtaining and maintaining an EMI license in Europe?

The costs of obtaining and maintaining an EMI license in Europe vary depending on the jurisdiction and the specific requirements of your business. Some of the main costs include application fees, regulatory capital requirements, professional service fees (e.g., legal, compliance, and accounting), and ongoing operational expenses (e.g., staff, office space, and IT infrastructure). It is crucial to carefully assess and budget for these costs to ensure the long-term success of your EMI business. 

4. Can an EMI license obtained in one European country be used to operate in other European countries?

Yes, an EMI license obtained in one European country can be used to operate in other European countries through a process called "passporting." Passporting allows your EMI business to provide services across the European Economic Area (EEA) under a single license, simplifying regulatory compliance and reducing operational costs. However, it is essential to notify the relevant authorities in each country where you intend to operate and comply with any local requirements. 

5. What are the main challenges and risks associated with operating an EMI business in Europe?

Operating an EMI business in Europe comes with several challenges and risks, including regulatory compliance, competition, cybersecurity, and financial crime. It is crucial to have robust compliance and risk management systems in place to mitigate these risks and ensure the long-term success of your EMI business. Additionally, staying up-to-date with regulatory changes and market trends is essential to maintain a competitive edge and adapt to the evolving financial services landscape.


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Sergei Artimenia

Sergei Artimenia

Managing Director

Member since

16 Aug 2021



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