Tuesday, August 9, 2022
UncategorizedOperational Features of EMI Licensing in Lithuanian Jurisdiction

Operational Features of EMI Licensing in Lithuanian Jurisdiction

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Lithuania is a state 2 years ago regulated process of getting EMI license. Entrepreneurs who have decided to operate in this area and want to receive a permission for payment system will now be able to remotely register accounts for their customers. Such permit in Lithuania may be issued within a few months (maximum six months), which is one of the advantages of jurisdiction. To deal with details of creating a firm in this area, use the services of competent specialists.

If you have, for example, an EMI license in UK, then the Lithuanian state authorities will issue you a license in an accelerated mode. This advantage is also given to executives who have already established organization in Lithuania and have a corporate account there. Non-residents of state must go through all stages of getting payment system license in Lithuania in accordance with the EU Directive. That is why the decision to choose a company with a ready-made license for sale is the most profitable and least difficult path for an entrepreneur.

Demands for Lithuania Have Become Tougher – Banks Are Afraid

Now banks do not open or close existing accounts for those non-residents whose commercial operations are not connected with territory of country. They close accounts for non-residents not only from third countries, but also for citizens of EU countries. Banks are afraid. The main argument of banks is that the profit they receive from non-residents does not cover the costs associated with controlling them. The passage of dubious money through Danske Pank in Estonia and the subsequent fine to the bank for lack of control, the incident with the ABLV bank in Latvia, which had its correspondent accounts closed in the USA, which led to its liquidation – all this scared the rest of the banks and they tightened their security measures.

The problem could be solved if regulators issued an order obliging banks to open accounts for companies with foreign owners, but now there is no such order and banks are free to do as they see fit.

Authorization for Digital Money and Conventional Payment Institutions

Today it is not at all necessary to open your own bank in order to start providing banking services: the rapid development of financial technologies has pushed European states to new types of permits – e-money license in particular. However, despite active digitalization of financial sector, one can still find misunderstanding and sometimes distrust of e-money establishments or, as people call it, electronic wallets. Representatives of the business environment and end consumers prefer classic banks, recklessly believing that payment services are less reliable. Although the presence of an EMI license in Europe is already a guarantee of security, unlike a standard payment facility.

EMI can provide services for both individuals and legal entities. You can open an account for your company not with a bank, but with a licensed company, which will be easier. Moreover, if your turnover is high, which allows you to think about your own license, and then this article is for you. Main difference for end users between a bank and an EMI lies in services proffered. Thus, main business of conventional banking establishments is lending, and payment services – opening current accounts, issuing debit cards and acquiring. Companies are prohibited from offering loans or EMI credit cards.

Another factor that distinguishes an EMI company from a bank is that EMIs can open accounts remotely for both individuals and companies, which means simplicity and speed. During COVID-19, this option is especially useful.

Lithuanian Legal Frame Advantages

1. Favorable taxes and fees.

Turnover taxes, licensing fees, and annual license fees for Fintech structures are among the lowest in the EU region. In addition, unlike many other cities in the EU, Vilnius does not apply a council tax on newly created fintech companies.

2. EMI permissions, passportization and visas.

A very simple EMI license getting process and certification for other EU states, which takes from 1 to 3 months and does not require any investments. There are also visas for non-EU/EEA start-ups intending to carry out innovative business in Lithuania.

3. Participation in SEPA.

Since 2016, Lithuania has joined Single Euro Payments Area, which unites 34 countries of the world. With a single SEPA account, a member state can become a payer or recipient of funds to/from any SEPA country.

4. KYC.

Payment special permission in Lithuania allows for remote clients verification: provision of innovative KYC processes (customer identification rules) for remote verification of customers, such as: electronic signature, video identification, provision of documents scanned copies, first transaction with a credit authority.

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