EMI (Electronic Money Institution) is a license to issue electronic money. EMIs are often viewed as competitors to traditional banking. However, obtaining an EMI license is a new tool that allows you to solve problems in the interests of banks and their customers, diversify risks, and reduce operating costs for both financial services customers and traditional banks.

In order to form a payment service company or register a company for electronic money, depending on the specific requirements for conducting business and the nature of the services, it is necessary to obtain an appropriate license. For example, if you need a license in Lithuania, you can contact  here https://www.fintecharbor.com/licenses-for-electronic-money-institutions-emi/ .

EMI licensing - obtaining permission for a legal entity to issue electronic money.

The license is issued in the country in which the company has its head office, meaning that there is at least one branch in the EU. Once licensed (e.g. Malta EMI license, Liechtenstein EMI license, Cyprus EMI license, UK EMI license), it can be passported throughout the EU, which means that all EU countries will be allowed to provide services to clients.

Obtaining a license for payment services takes from 6 to 24 months, depending on the country of the subsidiary. Some regulators do not grant certain types of licenses (obtaining an e-money license in Poland is not possible), while others are very thorough and recognized worldwide (like the FCA UK - i.e. the EMI license in the UK).

You can also get a small payment license or a small license for an electronic money institution.

Such small licenses have a simplified verification process, small transaction volume limits and cannot be passportized. Accordingly, small volume, small risks.

Of course, a license will be required if the services are to be provided to EU citizens who are in the EU, but there are many gray areas in this case.

Gray areas:

 - for example, if the client is a US citizen and he is served by a branch in the US, and the money is sent by a person in the EU, a license in the EU is not required.

 - for example, if the client is a US citizen working in the EU, an EU license and a US MSP license will be required.

 - for example, if the client is an EU citizen, but the service is not actively provided in the EU (no marketing or language of a particular country), a license may not be required.

The share of e-commerce in international transactions is constantly growing. One of the new forms of settlements used in international trade is electronic money settlements. In this regard, new players appeared in the financial sector - payment service providers (PSPs). One of the types of PSPs are companies that issue electronic money. In the EU, such organizations are legally called electronic money institutions (EMI). Let us consider the issues related to the procedure for registering such companies on the example of European regulation.

According to EU legislation, electronic money is money that is stored electronically on a magnetic medium, presented in the form of a claim against the issuer (clause 2, article 2 of the EMD). In other words, electronic money is the electronic equivalent of cash, a quasi-currency. Electronic money is divided into prepaid cards and prepaid accounts.

An electronic money institution is an organization that has been authorized to issue electronic money. (Clause 1, Art. 2 EMD). In some jurisdictions, EMIs are subdivided into Small EMIs and Authorized EMIs. The issue of Small EMI cannot exceed the amount determined by law (about 5,000,000 EUR). If the issue exceeds this limit, the company must go through the authorization procedure. The minimum amount of capital (capital requirement, not to be confused with the authorized capital) of an Authorized EMI should, as a rule, be at least 350,000 EUR.

The main services that are provided if you plan to obtain an EMI license are:

 - Emission of electronic money;

 - Provision of payment services with electronic money;

 - Lending related to payment services;

 - Payment initiation service (PIS);

 - Account information service (AIS).

The above services are also provided by Payment institutions (PI). The difference between EMI and PI is that PIs do not have the right to issue electronic money. EMIs can hold customer funds for longer periods. EMIs can also produce payment cards, e-wallets and other payment instruments that provide for the storage of customer funds.

An application for authorization is submitted to the competent authorities of the applicant's country.

Together with the application, the required list of documents is submitted, in particular, the business plan of the organization, evidence of the presence of authorized capital, security policy. The EMI authorization procedure may vary by country. Authorization times may also vary. For example, under Irish law, the total duration of the authorization procedure takes no more than 90 working days. At the same time, authorization in the country of domicile allows the company to carry out its activities on the territory of other participating countries through a representative office or agency, as well as directly if the organization provides its services free of charge.

The procedure for obtaining authorization, as a rule, is as follows:

 - The applicant holds a preliminary meeting with representatives of the competent authority, at which the applicant can clarify the details of registration and the rules for filling out forms;

 - The applicant submits a completed application with all necessary documents;

 - The competent authority accepts the application and checks it for compliance with the requirements;

 - After the verification is completed, the competent authority may clarify some questions with the applicant. The applicant in the prescribed form provides all the necessary clarifications;

 - The competent authority notifies its decision.