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How to Get an Electronic Money Licence in the EU (Latvia)?


Obtaining an Electronic Money Institution (EMI) licence in the European Union, particularly in Latvia, can be an attractive opportunity for entrepreneurs looking to offer digital financial services.


EMIs play a significant role in the financial landscape, providing alternatives to traditional banks and fostering innovation. In this article, we will explore the requirements and steps involved in obtaining an EMI licence in Latvia, an EU member state.


Requirements for an EMI Licence in Latvia:

Before delving into the application process, it's crucial to understand the specific requirements for obtaining an EMI licence in Latvia. These requirements ensure the integrity and stability of electronic money institutions operating within the country:

  • Shareholder Ownership: There is no minimum capital requirement, but shareholders owning 10% or more of the share capital or voting rights must meet the requirements of Section 21 of the Law on Payment Services and Electronic Money. This requirement ensures that significant stakeholders have a vested interest in the institution's success and adhere to regulatory standards.

  • Circulated Electronic Money: The average amount of electronic money circulated by the institution in the course of business activity should not exceed two million euros. This limitation is in place to manage risk and promote financial stability within the Latvian market.

  • Location and Jurisdiction: The institution's management committee and registered legal address (official seat) must be within the Republic of Latvia. It should conduct commercial activities exclusively within Latvia and not offer services outside Latvia or through international payment systems. This requirement ensures that EMIs operating in Latvia are subject to Latvian regulatory oversight and contribute to the domestic financial ecosystem.

  • Qualified Management: Members of the institution's board or council must have an impeccable reputation and possess the necessary education and expertise. This criterion helps ensure that individuals responsible for managing the institution are competent and trustworthy.


Steps to Obtain an EMI Licence in Latvia:


Getting an EMI licence in Latvia involves a structured process. Let's break down the steps:


1) Preparation for Application Submission:


  • Develop a comprehensive business plan that outlines your institution's objectives, target market, and financial projections. This plan serves as a roadmap for your EMI.

  • Provide a detailed description of your planned business activities, including the services you intend to offer and how they will benefit consumers.

  • Outline the structure of shareholders (participants) of the commercial company, including their roles and ownership percentages.

  • Prove the availability of initial capital by providing evidence of the required funds in a bank account within Latvia.

  • Present information about members on the management board and council, including their qualifications and experience.

  • Identify important shareholders who own significant stakes in the institution.

  • Specify the person directly responsible for managing the institution's operations.

  • Describe arrangements for the continuity of commercial activities, including disaster recovery and business continuity plans.

  • Ensure compliance with Anti-Money Laundering (AML) regulations by detailing your AML procedures and processes.


2) Application Submission:


  • Submit all necessary documents to the Financial and Capital Market Commission (FCMC). Ensure that your application is complete and accurate, as any gaps or deficiencies may delay the approval process.


3) Assessment of Application:


  • Within one month of receiving the application, the FCMC begins its review. During this phase, the commission evaluates the documentation and information provided to determine whether your institution meets all regulatory requirements.

  • If additional information is needed to make a determination, the FCMC may request additional documentation or clarification.


4) Receipt of Registration:


  • If the FCMC finds the application complete and satisfactory, you will receive a letter informing you that the assessment of the authorisation application is underway.

  • The FCMC will conduct a thorough assessment of your institution's suitability to operate as an EMI in Latvia. This assessment includes a review of your business plan, financial stability, compliance with regulatory requirements, and the qualifications of your management team.


Upon successful assessment, you will be granted an EMI license in Latvia, allowing you to operate within the country.


To conclude, obtaining an Electronic Money Institution licence in Latvia offers opportunities to enter the digital financial services market within the European Union. By meeting the specific requirements and following the structured application process outlined above, entrepreneurs can establish themselves as registered electronic money institutions in Latvia. This allows them to issue electronic money, provide payment instruments issuance, or offer money remittance services, contributing to the dynamic financial landscape of the EU.


However, it's crucial to stay compliant with Latvian and EU regulations to ensure the smooth operation of your EMI. Additionally, ongoing adherence to AML and other relevant regulations is essential for maintaining the trust and confidence of customers and regulators alike. As you navigate the process of obtaining an EMI license, thorough preparation and attention to detail will be key to your success in this growing sector of the financial industry.

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