EMI or payment institution licence in Latvia?
Two PSD2 licences, one regulator, one passport. Which one your model needs.
A payment institution executes payments. An e-money institution does that too, and may also hold your customers' money as stored value. The capital, the safeguarding and the passport all follow from that one difference.
Why Latvia, and why now
Latvia licenses both under the Law on Payment Services and Electronic Money, its transposition of PSD2 and the second E-Money Directive. One authority does everything: since 1 January 2023 Latvijas Banka licenses and supervises the sector. One file, one regulator, one decision.
In 2025 Latvijas Banka issued eight licences to companies in the fintech segment, and seven more by mid-May 2026.
- Direct SEPA. Since 17 October 2024 licensed payment and e-money institutions can participate directly in Latvijas Banka's Electronic Clearing System (EKS) for SEPA payments, including instant payments, without an intermediary bank. The first non-bank provider joined in April 2025.
- Free pre-licensing. Latvijas Banka offers free pre-licensing support to companies preparing an application, and decides within three months of a complete file.
The difference in practice
- Payment institution. Provides the payment services in Section 1(1) of the Law: cash placement and withdrawal, credit transfers, direct debits and card payments, issuing payment instruments and acquiring, money remittance, payment initiation and account information. It may hold customer funds only to execute a payment. A balance waiting for a future, unspecified payment is e-money or a deposit, not a payment service.
- E-money institution. Issues electronic money: stored value, a claim on the issuer, accepted by persons other than the issuer. Wallets, prepaid cards, multi-currency accounts with a standing balance and euro-pegged stablecoins are all e-money. An EMI may also provide every payment service, so its licence is a superset. The price is €350,000 of initial capital against €20,000 to €125,000.
Two rules apply to both. Neither may take deposits. Both may lend only in connection with a payment service, for no more than twelve months and never out of safeguarded funds. E-money is issued and redeemed at par and earns no interest. If your margin needs a loan book or a deposit base, you need a bank licence, which Latvia now offers from €1 million.
PI, EMI or registered: the comparison
| Payment institution | E-money institution | Registered (PI or EMI) | |
|---|---|---|---|
| Initial capital | €20,000 remittance; €50,000 payment initiation; €125,000 other services; none for account information only | €350,000 | None |
| Customer balances | Only to execute payments | Yes, as e-money, redeemable at par | Limited, small-scale activity |
| EEA passport | Yes | Yes | No, Latvia only |
| Direct SEPA via EKS | Yes | Yes | No |
| Decision | Completeness in 15 working days; decision within 3 months of a complete file | Same | Completeness in 15 working days |
| Application fee | €5,000 (€450 innovative-only) | €5,000 (€450 innovative-only) | €2,500 (€450 innovative-only) |
| Annual fee | €7,000 plus up to 1.4% of related gross income, capped at €100,000 | Set by Latvijas Banka | Set by Latvijas Banka |
Which licence does your model need?
The licence follows the money flow, not the pitch deck.
- Merchant acquiring and gateways. Payment institution at €125,000. Funds in transit to the merchant are safeguarded, not stored.
- Remittance. Money remittance alone is €20,000. Add payment accounts or cards and it moves to €125,000. Price the file on the services you will actually offer in year one.
- Wallets, prepaid cards, multi-currency accounts. If the customer keeps a balance and spends it where they like, you issue e-money: EMI at €350,000. This is the most common category error and the most expensive to correct after filing.
- Open banking. Payment initiation is €50,000. Account information only needs no initial capital, but professional indemnity insurance or a comparable guarantee.
- Crypto-asset businesses adding fiat. A MiCA licence does not run euro rails. To issue a euro-pegged stablecoin, an e-money token, the issuer must be an EMI or a credit institution (Article 48 of MiCA).
- Local and small. The registered route has no initial capital and a €2,500 fee, but no passport. It suits a pilot, not a roadmap.
If stored value is in the plan, consider filing for the EMI from the start rather than re-scoping later.
Requirements: capital, safeguarding, people, substance
- Capital and own funds. Section 12 of the Law sets initial capital, and own funds must be maintained afterwards. The file evidences where the capital came from and carries a business plan the reviewer will test.
- Safeguarding. Customer funds are segregated, typically in an account at a credit institution, or covered by an insurance policy or guarantee. The safeguarding bank is often the item that delays a file. Open that conversation early.
- People. Management with adequate education and experience, and good repute for the board and qualifying shareholders.
- Substance. Head office in Latvia. Outsourcing and agents are allowed, but a company that has contracted every function abroad will be asked where the institution actually is. The vehicle is usually a Latvian SIA.
- Policies. Programme of operations, safeguarding, internal control, AML/CFT and sanctions with a risk assessment, IT security, business continuity, complaints, outsourcing and agents. Write each to be operated, and match the AML risk assessment to the programme of operations.
The licensing process, step by step
- 01
Consultation
A free meeting with Latvijas Banka on the model and whether it is regulated at all.
- 02
Pre-licensing
Free and recommended. Latvijas Banka's experts guide you on the legal framework and the documents required. It will not draft them for you. This is where the file is built.
- 03
Formal application
The application and supporting documents, with the fee paid on filing. Completeness is checked within 15 working days.
- 04
Assessment
A decision within three months of a complete file. Expect written questions and a close reading of the AML risk assessment and safeguarding.
- 05
Decision and go-live
The licence is entered in Latvijas Banka's register. Direct SEPA through the EKS is a separate onboarding.
Timeline and costs
Latvijas Banka says a well-prepared application can be authorised within two to three months of a full submission. The variable is how long it takes to assemble a file that is complete on day one, so plan the preparation separately.
Regulator fees are modest: €5,000 to apply for a licence, €2,500 for registration, €450 for an innovative-only service. Consultation and pre-licensing are free. Budget instead for the capital, the safeguarding bank, insurance where required and the people.
After the licence
- Report and notify. Regular reporting to Latvijas Banka, and agents are approved before use: Latvijas Banka assesses the information within one month.
- Passport. Services, agents and branches in the EEA on notification to Latvijas Banka. The registered route has no passport.
- Direct SEPA. Licensed institutions can apply to join the EKS.
- Grow up. Lending from the balance sheet or paying interest on balances needs a specialised credit institution licence from €1 million.
Where applications go wrong
| What goes wrong | What it looks like |
|---|---|
| Wrong licence category | A payment institution file for a wallet, re-filed as an EMI |
| No safeguarding bank | "To be confirmed" where the segregated account should be |
| Plan that cannot carry its own funds | Own funds below the capital floor in the pessimistic case |
| Generic AML risk assessment | A country table that ignores the corridors you serve |
| Substance on paper | A board resident abroad and nobody in Riga |
| Everything outsourced | Core functions at a group company with no oversight or exit |
| Undocumented capital | Share capital paid in, source of funds not |
| Copied IT policies | Another company's name in the metadata |
A licensing file describes a company that already exists on paper. The reviewer notices when it was written by five people in five weeks.
How Nordant helps
We are based in Riga and work on payment, e-money and crypto-asset files before Latvijas Banka. The process is the same; the capital, the safeguarding and the product differ.
- Licensing & Authorisation. Settle the category in the first call, build the file through pre-licensing, answer the regulator to the decision.→
- Regulatory Advisory. PI, EMI or registered? Is your balance e-money?→
- Legal & Corporate Advisory. The SIA, shareholder agreement, group structure, outsourcing and agent contracts.→
- Outsourced Legal Counsel. Senior capacity for the months the build takes.→
- Outsourced Compliance & MLRO. An AML risk assessment that matches your corridors, and policies written to be operated.→
Our default answer is "yes, safely." On a payment licence that sometimes means telling you in the first call that you are describing an e-money institution, or a bank.
Common questions
- What is the difference between a payment institution and an e-money institution?
- A payment institution executes payments: transfers, card acquiring, remittance, payment initiation and account information. An e-money institution does all of that and may also issue electronic money that customers hold and spend later. In Latvia a payment institution needs €20,000 to €125,000 of initial capital and an EMI €350,000.
- How much capital does a payment institution need in Latvia?
- €20,000 for money remittance only, €50,000 for payment initiation and €125,000 for other payment services. Account information only needs no initial capital but requires professional indemnity insurance or a comparable guarantee.
- How much capital does an e-money institution need?
- €350,000 of initial capital.
- How long does it take?
- Completeness is checked within 15 working days and a decision is due within three months of a complete file. Preparation and pre-licensing come on top.
- What does it cost?
- €5,000 to apply for a licence, €2,500 for registration, €450 for an innovative-only service. A licensed payment institution pays €7,000 a year plus up to 1.4% of related gross income, capped at €100,000.
- Can a Latvian PI or EMI passport across the EEA?
- Yes, on notification to Latvijas Banka. A registered institution cannot and operates in Latvia only.
- Can a PI or EMI lend or take deposits?
- No deposits. Credit only ancillary to a payment service, for up to twelve months, not from safeguarded funds. Lending as a business needs a credit institution licence.
Figures reflect the position at publication. We confirm the current rules for your case in the scoping call.