Best EU jurisdictions for EMI license

[dave0839511]

Hey.

We consider to bootstrap an EU EMI license, as we have the software and law expertise in house.

What do you guys recommend as the cheapest and most welcoming jurisdiction for licensing in 2025, Estonia Lithuania or some other?

Thanks in advance!!

 

[SCHLOSSFINANZ]

Liechtenstein

 

[dave0839511]

Liechtenstein

Expensive but maybe it has some advantages compared with eastern Europe?

 

[SCHLOSSFINANZ]

First class reputation, low taxes and fast licencing process. And you are entitled to a Swiss National Bank account

 

[Sols]

We consider to bootstrap an EU EMI license, as we have the software and law expertise in house.

What do you guys recommend as the cheapest and most welcoming jurisdiction for licensing in 2025, Estonia Lithuania or some other?

If you're not comfortable committing a few million: don't. Just partner with a Banking-as-a-Service provider like Modulr, OpenPayd, or Intergiro if all you want to do is build a good product.

The bare costs might just be a few hundred thousand in theory, but most regulators expect to see a capital commitment of a few million or they will be very hesitant to issue a license. Issuing a license is a lot of upfront and ongoing work for a regulator. You pose an economic, regulatory, and reputational risk. Regulators don't want to issue license to someone who's going to fail and cause a mess, or someone who knowingly or inadvertently becomes a laundromat for criminals.

If you have a few million, then look at jurisdictions less form a cost perspective and more from a suitability perspective. Who are your customers? What do they do? Why are you targeting them?

Liechtenstein

First class reputation, low taxes and fast licencing process. And you are entitled to a Swiss National Bank account

Liechtenstein is interesting, but I'm not sure it's really fair to look at such a vague description as above and call Liechtenstein the best.

The focus in the description we got here is on cost and openness. I don't think Liechtenstein satisfies those two particularly well. It's a high-cost jurisdiction and a regulator that doesn't exactly exude a welcoming aura. They're not hostile, but they have a long way to go compared to most of their peers.

It's a strong banking jurisdiction but for fintech, it's practically unheard of. IIRC, it has lost more EMI and PI licensees than it currently has active (four). And two of the current licensees subsidiaries/majority owned by Swiss banks (Cornèr and Hypothekarbank Lenzburg).

Headline tax is generally not a concern when people start financial institutions. If it were, there wouldn't be huge fintech sectors in countries like Germany, France, Netherlands, and Spain. But if headline tax rate truly mattered much, why would anyone form an EMI in Germany when they could go to Malta and simply passport the license? However, if headline tax rate is a major concern, you can get very similar or lower in for example Lithuania, Malta, Cyprus, and Ireland.

I'm not sure how one would even quantity speed of licensing Liechtenstein. If my memory is right, FMA has handled fewer than 10 total EMI and PI licenses in total. Compare that to the enormous numbers in Lithuania, Cyprus, Malta, Germany, France, Spain, Luxembourg, Netherlands. Yes, those places may have backlogs at times but at least the people there are experienced. You know what to expect. FMA might be fast — who knows? You're throwing yourself into the unknown.

I'm not saying Liechtenstein is bad. But I'd only pick Liechtenstein after carefully considering the business plan and how well it matches with FMA's expertise and experience. For a cookie cutter setup, I'd go with a place that has issued a couple of dozen licenses.

 

[dave0839511]

Thabk

If you're not comfortable committing a few million: don't. Just partner with a Banking-as-a-Service provider like Modulr, OpenPayd, or Intergiro if all you want to do is build a good product.

The bare costs might just be a few hundred thousand in theory, but most regulators expect to see a capital commitment of a few million or they will be very hesitant to issue a license. Issuing a license is a lot of upfront and ongoing work for a regulator. You pose an economic, regulatory, and reputational risk. Regulators don't want to issue license to someone who's going to fail and cause a mess, or someone who knowingly or inadvertently becomes a laundromat for criminals.

If you have a few million, then look at jurisdictions less form a cost perspective and more from a suitability perspective. Who are your customers? What do they do? Why are you targeting them?



Liechtenstein is interesting, but I'm not sure it's really fair to look at such a vague description as above and call Liechtenstein the best.

The focus in the description we got here is on cost and openness. I don't think Liechtenstein satisfies those two particularly well. It's a high-cost jurisdiction and a regulator that doesn't exactly exude a welcoming aura. They're not hostile, but they have a long way to go compared to most of their peers.

It's a strong banking jurisdiction but for fintech, it's practically unheard of. IIRC, it has lost more EMI and PI licensees than it currently has active (four). And two of the current licensees subsidiaries/majority owned by Swiss banks (Cornèr and Hypothekarbank Lenzburg).

Headline tax is generally not a concern when people start financial institutions. If it were, there wouldn't be huge fintech sectors in countries like Germany, France, Netherlands, and Spain. But if headline tax rate truly mattered much, why would anyone form an EMI in Germany when they could go to Malta and simply passport the license? However, if headline tax rate is a major concern, you can get very similar or lower in for example Lithuania, Malta, Cyprus, and Ireland.

I'm not sure how one would even quantity speed of licensing Liechtenstein. If my memory is right, FMA has handled fewer than 10 total EMI and PI licenses in total. Compare that to the enormous numbers in Lithuania, Cyprus, Malta, Germany, France, Spain, Luxembourg, Netherlands. Yes, those places may have backlogs at times but at least the people there are experienced. You know what to expect. FMA might be fast — who knows? You're throwing yourself into the unknown.

I'm not saying Liechtenstein is bad. But I'd only pick Liechtenstein after carefully considering the business plan and how well it matches with FMA's expertise and experience. For a cookie cutter setup, I'd go with a place that has issued a couple of dozen licenses.

Thank you for an indepth response. Our working plan was to hire two experienced staffers in Lithuania, one for AML/compliance, another for finance operations, set up a small local office in the country. Put up around 200k for expenses + 350k capital. Then handle the application procedure by our internal knowledge ( maybe copy some blueprint EMI records that are public), and use our own IT-wallet system which we have developed. But maybe this is native thinking?

 

[daniels27]

Thabk

Thank you for an indepth response. Our working plan was to hire two experienced staffers in Lithuania, one for AML/compliance, another for finance operations, set up a small local office in the country. Put up around 200k for expenses + 350k capital. Then handle the application procedure by our internal knowledge ( maybe copy some blueprint EMI records that are public), and use our own IT-wallet system which we have developed. But maybe this is native thinking?

There are two options. Either you are real good or you are completely naive. You can look at your code quality, you will most likely see within 1 minute which one is the case.

 

[dave0839511]

There are two options. Either you are real good or you are completely naive. You can look at your code quality, you will most likely see within 1 minute which one is the case.

I completely agree. I will share the results with you in 1 year, and then we'll see

 

[daniels27]

I completely agree. I will share the results with you in 1 year, and then we'll see

Yes, and of course we hope that you are real good! Please let us know when there is a beta available to try!

 

[Sols]

Thabk

Thank you for an indepth response. Our working plan was to hire two experienced staffers in Lithuania, one for AML/compliance, another for finance operations, set up a small local office in the country. Put up around 200k for expenses + 350k capital. Then handle the application procedure by our internal knowledge ( maybe copy some blueprint EMI records that are public), and use our own IT-wallet system which we have developed. But maybe this is native thinking?

You will not get a license with that budget.

Go speak with Modulr, OpenPayds, Intergiro, and other BaaS providers. Find someone who's aligned with you. Build a product. Get customers. Then once you have a couple of millions and some momentum, you'll be in a much better position to get a license.