How to Get an EMI Licence: A Practical Guide

How to get an EMI licence: where to apply, capital and governance requirements, the application process, timelines, and the pitfalls that delay approval.

Few decisions shape a payments business as profoundly as where, and how, it becomes regulated. Knowing how to get an EMI licence is the difference between a venture that can hold client funds, issue accounts and cards, and move money at scale, and one that is forever dependent on someone else's permissions.

An Electronic Money Institution licence authorises a firm to issue electronic money, hold customer funds in safeguarded accounts, and provide payment services such as accounts, transfers and card programmes. It is a serious regulatory undertaking, not a formality, and regulators across the EU and the UK have raised the bar considerably in recent years.

This guide explains what the licence covers, where founders typically apply, what regulators expect, and the practical realities that determine whether an application succeeds or stalls.

What an EMI Licence Actually Permits

An EMI licence sits a tier above a payment institution authorisation. Both allow regulated payment services, but only an EMI may issue electronic money, meaning stored monetary value that customers can hold in an account or on a card and spend later.

In practice this is what underpins modern neobanks, multi-currency wallets, card programmes and many embedded-finance products. The institution holds client funds, but those funds are not deposits in the banking sense. They must be safeguarded, typically by holding an equivalent amount in a segregated account at a credit institution or in low-risk liquid assets, so that customers are protected if the firm fails.

It is important to be precise about what an EMI is not. It is not a bank. It generally cannot lend out client money, pay interest funded by lending, or rely on deposit-insurance schemes. Founders who need genuine balance-sheet lending will eventually need a banking licence, which is a far heavier undertaking.

Where Founders Typically Apply

There is no single global EMI regime. The two most established gateways for ambitious payment businesses are the European Union and the United Kingdom.

Within the EU, the licence is harmonised under the Electronic Money Directive and the Payment Services Directive, which means an institution authorised in one member state can, through passporting, offer services across the bloc. This single-market reach is the principal attraction. Lithuania, Ireland, Malta, the Netherlands and Luxembourg are among the jurisdictions that have built reputations for processing EMI applications, each with its own supervisory style and appetite.

The United Kingdom retained an equivalent regime after leaving the EU, supervised by the Financial Conduct Authority, but UK authorisation no longer carries EU passporting. Firms that want both markets increasingly need authorisation on both sides.

Choosing a jurisdiction is not about finding the easiest regulator. It is about matching the supervisor's expectations, language, local-substance requirements and processing culture to your business model and your ability to staff a credible local operation. A licence obtained in a jurisdiction where you have no real presence tends to invite scrutiny rather than avoid it.

Capital, Safeguarding and Governance

Regulators assess three things above all: that the firm holds enough capital, protects client money, and is run by people who know what they are doing.

Initial capital for an EMI is set by regulation and is materially higher than for a small payment institution. Beyond the initial figure, an EMI must hold ongoing own funds calculated against the volume of electronic money in issue, so capital requirements scale as the business grows. Founders should budget not only for the regulatory minimum but for a comfortable buffer, because supervisors dislike firms that sit on the edge of their requirements.

Safeguarding is the heart of the regime. The firm must keep customer funds separate from its own, reconcile them daily, and demonstrate robust controls. Weak safeguarding arrangements are among the most common reasons applications are refused or licences are later restricted.

Governance receives intense attention. Regulators expect a board and senior managers with genuine payments and compliance experience, a resident or locally present management team in many jurisdictions, and clearly documented responsibility. The directors and significant shareholders undergo fit-and-proper assessment, and ultimate beneficial owners are scrutinised. A strong money-laundering reporting officer and a credible compliance function are non-negotiable.

The Application Process and Timeline

An EMI application is essentially a complete business in document form. At its centre is a regulatory business plan that sets out the model, target customers, financial projections, the flow of funds, and how risks are controlled.

Around that core, applicants must produce a programme of operations, detailed safeguarding arrangements, anti-money-laundering and counter-terrorist-financing policies, a governance and internal-controls framework, IT and security descriptions, outsourcing arrangements, capital evidence, and full documentation on directors and owners. The level of detail expected is often underestimated by first-time founders.

Timelines vary by jurisdiction and by the quality of the submission. Regulators typically have a defined period to assess a complete file, but the clock effectively pauses each time they raise questions, and they almost always do. As a realistic expectation, founders should plan for many months from first engagement to authorisation, and should treat any promise of a rapid licence with caution.

The single biggest determinant of speed is the quality of the initial filing. A thorough, internally consistent application that anticipates the regulator's concerns moves faster than a thin one that triggers repeated rounds of questions.

Banking, Substance and Operational Reality

A licence on paper is not a working business. Two practical hurdles defeat many newly authorised EMIs.

The first is banking and safeguarding access. An EMI needs a credit institution willing to hold its safeguarded client funds and, separately, banking for its own operations. Securing these relationships has become harder, and applicants increasingly need to demonstrate banking arrangements, or credible commitments, during the application itself.

The second is substance. Regulators expect the firm to be genuinely run from the jurisdiction of authorisation, with real staff, real systems and real decision-making there. Booking a registered office while running everything from elsewhere is a recognised red flag and can lead to enforcement.

Founders should also plan for ongoing obligations: regular regulatory reporting, audits, safeguarding reconciliations, and continuing fit-and-proper requirements. Authorisation is the start of a supervisory relationship, not the end of the work.

Buy, Partner or Build

Not every business needs to obtain its own EMI licence. Some launch under an agent or distributor arrangement with an existing institution, others use a banking-as-a-service partner, and some acquire an already-licensed entity. Each route trades control, cost and timeline differently. The right answer depends on volumes, margins, the importance of owning the regulatory permission, and how quickly you need to be live.

How HPT Helps

We help founders and investors decide whether an EMI licence is the right vehicle at all, select a jurisdiction that genuinely fits the business, and assemble a credible application: business plan, capital structure, safeguarding and governance, and the local substance regulators now expect. Where a partner or acquisition route is faster or more sensible, we map that too, and we coordinate the banking relationships that make the licence usable in practice.

If you are weighing how to get an EMI licence for your payments venture, speak with us before you commit to a jurisdiction.