EU Payment Institution and EMI Licensing 2026: Which Jurisdiction Should You Choose?

EU Payment Institution and EMI Licensing 2026: Which Jurisdiction?

Choosing where to apply for a European Payment Institution or Electronic Money Institution licence is one of the most important regulatory decisions a fintech will make. An authorisation obtained in one EU or EEA Member State can generally be passported into other Member States under the applicable European framework, but that does not mean every jurisdiction is interchangeable or that a business should simply apply wherever the licensing process appears cheapest or fastest.

Lithuania, Ireland, Malta, the Netherlands, Luxembourg, France and other European jurisdictions all operate within the common PSD2 and Electronic Money Directive framework in 2026, yet their supervisory approach, fintech ecosystems, expectations around local substance, application process and practical operating environment can differ materially. The appropriate home state depends on where the business will genuinely be managed, where key staff and decision-makers will sit, the products being offered, target customers, banking and safeguarding arrangements and the firm’s longer-term European strategy.

The regulatory framework is also about to change. Political agreement on PSD3 and the new Payment Services Regulation was reached in late 2025, technical work progressed through 2026 and formal adoption is expected later in 2026. The future framework will combine payment and e-money authorisation more closely and strengthen harmonisation across the EU, making it even less sensible to choose a jurisdiction solely because it has historically been perceived as an easier licensing location.

For most serious fintechs, the correct question is therefore not “which country gives the easiest EMI licence?” but “which jurisdiction provides the strongest regulatory and operating base for the business we actually intend to build?”

EU PI and EMI jurisdictions at a glance

Jurisdiction	Regulator	Often considered by	Key practical consideration
Lithuania	Bank of Lithuania	Fintechs, payments and e-money businesses seeking an established specialist ecosystem	Efficient formal process where applications are complete, but regulatory scrutiny and local substance expectations are significant
Ireland	Central Bank of Ireland	International groups, US-linked fintechs and businesses seeking a major English-speaking financial centre	Highly rigorous authorisation process with strong expectations around governance, substance and risk management
Malta	Malta Financial Services Authority	Payments, e-money and fintech groups seeking an English-speaking EU jurisdiction	Established financial-services regulator with local substance and ongoing supervisory expectations
Netherlands	De Nederlandsche Bank	Larger fintechs, sophisticated payments businesses and firms targeting Northern Europe	Strong prudential and governance focus with detailed application expectations
Luxembourg	CSSF	International financial groups, wealth-related fintechs and businesses with broader financial-services operations	Established cross-border financial centre with strong institutional infrastructure and supervisory expectations
France	ACPR	Firms targeting a major domestic EU market or building substantial French operations	Large market and sophisticated regulatory environment, with significant local operational and governance expectations
Spain and other EU states	Relevant national competent authority	Firms with genuine operational or commercial reasons to establish there	Appropriate where the home state aligns naturally with management, customers and commercial strategy

There is no universally “best” European EMI or PI jurisdiction. The strongest choice is normally the country where the firm can demonstrate credible central administration, senior management, operational substance and a genuine reason for establishing its regulated business, while also supporting the commercial infrastructure needed after authorisation.

What is an EU Payment Institution licence?

A Payment Institution is authorised to provide one or more regulated payment services under PSD2 and the national law implementing that framework. Depending on the permissions granted, these services can include operating payment accounts, executing credit transfers and Direct Debits, card-related payment services, merchant acquiring, money remittance and payment initiation.

A PI does not automatically have the right to issue electronic money. Where the business model involves receiving money in exchange for electronically stored monetary value that can remain available for future payments and is accepted by third parties, an Electronic Money Institution authorisation may instead be required.

The initial capital requirement depends on the payment services being provided. Under the current PSD2 framework, the applicable minimum can be €20,000 for money remittance, €50,000 for payment initiation or €125,000 for the broader payment services subject to the highest capital tier.

The permission analysis should therefore come before the jurisdiction decision. A founder should first determine whether the business requires PI or EMI authorisation and which activities need permission, then choose the home state that best fits the resulting regulated operating model.

What is an EU Electronic Money Institution licence?

An Electronic Money Institution can issue electronic money and provide payment services within the scope of its authorisation. This makes the EMI model particularly relevant to fintechs offering stored-value wallets, payment accounts funded by e-money, prepaid products, multi-currency accounts and cards linked to electronic money balances.

The current minimum initial capital requirement for a full EMI under the European framework is €350,000. The firm must also comply with ongoing own-funds requirements, safeguarding, governance, financial crime, operational resilience and other regulatory obligations applicable in its home Member State and across the wider EU framework.

An EMI authorisation should not be sought simply because the term sounds broader or more prestigious than a PI licence. If the business does not issue electronic money and only needs to provide defined payment services, a PI may provide the more appropriate and proportionate regulatory structure.

Conversely, a fintech planning to operate customer wallets or stored balances should not attempt to fit the business artificially into a PI model merely because the capital requirement appears lower. The permissions should follow the substance of the product and customer journey.

Can one EU licence cover the whole European market?

One of the principal advantages of EU PI and EMI authorisation is the ability to provide permitted services across the EEA through passporting. Once authorised in its home state, a firm can use the relevant notification procedures to provide services into other EEA jurisdictions under freedom to provide services or, where appropriate, freedom of establishment.

Passporting does not mean the firm receives 30 separate licences. The home regulator remains responsible for the core authorisation and prudential supervision, while host-state rules and supervisory responsibilities can still apply in defined areas.

This makes the selection of the home state strategically important because the relationship with that regulator continues long after the licence is granted. Regulatory reporting, governance changes, qualifying holdings, outsourcing, capital, safeguarding and material business changes remain subject to home-state supervision.

A fintech should therefore choose a regulator it is prepared to work with for the long term rather than viewing the jurisdiction merely as the place where the initial licence application is filed.

The European Banking Authority maintains the common framework for passporting and supervision of branches, while individual notifications are managed through the relevant home-state regulator.

You need genuine substance in the licensing jurisdiction

European payment licensing is not intended to support regulatory letterbox companies. PSD2 requires a Payment Institution to have its head office in the Member State where it is authorised and to conduct at least part of its payment services business there, while supervisors increasingly focus on whether central administration and meaningful decision-making genuinely occur in the home jurisdiction.

The EBA has previously identified differences between national authorities in their interpretation of local substance, but the direction of travel is towards stronger and more consistent expectations. Management, compliance, financial crime, risk and key decision-making should therefore be structured around a credible regulated establishment rather than nominal local appointments.

The required level of substance depends on the size and complexity of the firm. A startup with a focused remittance model may require a smaller local organisation than a multinational EMI providing wallets, cards and merchant services across the EEA, but both need enough people and control in the home state to demonstrate sound and prudent management.

This is one reason choosing a jurisdiction solely because an adviser claims to have a “fast-track licence” can be a serious mistake. The company must still operate there after authorisation, and an artificial structure can create continuing supervisory and governance problems.

Lithuania: still a major European fintech licensing jurisdiction

Lithuania became one of Europe’s most prominent payment and e-money licensing centres during the expansion of the fintech market, and it continues to have one of the largest specialist PI and EMI sectors in the EU. The Bank of Lithuania has developed dedicated authorisation guidance, fintech engagement arrangements and specialist supervisory resources for the sector.

For a complete PI application with no deficiencies, the Bank of Lithuania states that the licence can be issued within the statutory three-month assessment period. The regulator is also unusually transparent in acknowledging that applications are only exceptionally free from deficiencies and that requests for additional information extend the process, so founders should not interpret the three-month period as a guaranteed end-to-end authorisation timeline.

Lithuania can remain an attractive jurisdiction where the business genuinely intends to establish management and operations there and benefits from the local fintech ecosystem. The relatively concentrated payment sector means that professional expertise, compliance personnel and service providers with EMI and PI experience are widely available.

However, the old perception that Lithuania is simply the easiest route to an EU licence is outdated. The Bank of Lithuania has developed increasingly mature supervisory expectations around governance, safeguarding, AML, operational arrangements and senior management, and existing firms are subject to active ongoing supervision.

The regulator’s current Payment Institution authorisation guidance makes clear that applicants must be ready to comply with the regulatory framework at the point of authorisation and that the business plan must be credible relative to the founders’ ability to implement it.

When does Lithuania make commercial sense?

Lithuania can make sense for a fintech that is prepared to establish genuine operational capability there and wants a regulator with extensive experience authorising payment and e-money business models. It may be particularly relevant where the firm wants access to an established fintech labour market and where management is comfortable operating part of the business from the Baltic region.

The jurisdiction can also work well for businesses whose target market is broader Europe rather than one dominant domestic country. A firm can establish its regulated base in Lithuania and passport services across the EEA, provided its home-state substance is genuine and the passporting framework is followed correctly.

The business should nevertheless consider banking, safeguarding and management availability before choosing the country. A regulator granting a licence does not guarantee that banks, schemes or infrastructure providers will automatically support the business, so commercial infrastructure needs to be assessed alongside regulatory considerations.

Lithuania should therefore be selected because it fits the firm’s operating model, not because historical marketing material describes it as the quickest place in Europe to obtain an EMI licence.

Ireland: strong for international groups but a demanding authorisation process

Ireland has become an important European base for international fintech, technology and financial-services groups. Its position as an English-speaking EU Member State, established financial-services centre and location for major multinational businesses can make it particularly attractive to companies with international management teams or significant existing European operations.

The Central Bank of Ireland operates a structured and risk-based PI and EMI authorisation process and is explicit about the standard expected from applicants. Its published service standard for the formal assessment phase is 90 working days, but the assessment clock can be paused where the application does not address key areas adequately or where the applicant fails to respond comprehensively to regulatory feedback.

The regulator places significant emphasis on governance, safeguarding, outsourcing, operational and IT risk, financial crime and orderly wind-down. It also expects applicants to demonstrate that their AML framework is driven by the specific risks of the business rather than a generic tick-box assessment.

Ireland can therefore be an excellent jurisdiction for a well-funded business capable of establishing substantive senior management and control functions locally. It is less suitable for founders whose principal objective is to obtain an EU licence with the smallest possible local footprint or lowest regulatory preparation cost.

The Central Bank’s PI and EMI authorisation guidance should be reviewed early because its expectations affect the operating model as much as the application documentation.

When does Ireland make commercial sense?

Ireland is often a natural choice for US or other international groups that already have significant operations, management or technology functions in the country. An established corporate presence can make it easier to demonstrate why Ireland is the genuine home state of the regulated business rather than an arbitrarily selected licensing jurisdiction.

It can also suit firms that value operating from a globally recognised financial centre with access to international professional services, technology talent and broader financial-services infrastructure. For businesses expecting institutional counterparties, investors or major strategic partners to scrutinise the regulatory structure closely, that wider ecosystem can be commercially valuable.

The trade-off is that authorisation should be approached as a substantial regulatory project. Governance, staffing, risk management and local substance need to be credible from the beginning, and applicants should be prepared for detailed regulatory challenge throughout the assessment.

Ireland should therefore be selected for strategic fit rather than speed. A strong international firm with a genuine Irish operating base can be well suited to the jurisdiction, while a lightweight licensing vehicle is unlikely to fit the Central Bank’s expectations.

Malta: an established English-speaking financial-services jurisdiction

Malta has long operated as an international financial-services jurisdiction and authorises Payment Institutions and Electronic Money Institutions through the Malta Financial Services Authority. The legal framework sits within Malta’s implementation of the European payment and e-money regime, allowing authorised institutions to use the applicable EEA passporting arrangements.

The jurisdiction can appeal to businesses seeking an English-speaking EU base with an established regulatory and professional-services ecosystem. Malta also has experience across payments, e-money, investment services, insurance and digital financial services, which can be useful for groups whose activities extend beyond a single payments product.

Applicants should not interpret Malta’s size as meaning the regulatory process is informal or lightly supervised. The MFSA continues to issue detailed sector guidance and supervisory communications, including 2026 work concerning safeguarding and firms’ preparedness for PSD3.

The firm still needs credible local governance, appropriate senior personnel, capital, safeguarding, financial crime controls and an operating model that demonstrates why Malta is the genuine home state. The relevant MFSA financial institutions framework provides the starting point for understanding how PIs and EMIs are authorised and supervised.

When does Malta make commercial sense?

Malta can make sense where founders genuinely intend to establish and manage the regulated operation from the jurisdiction and value an English-speaking European environment. It can also be relevant to international groups already using Malta for other regulated or technology operations, because the payment institution can form part of a wider substantive group presence.

The jurisdiction’s smaller scale can support close access to specialised local advisers and financial-services professionals, but applicants still need to demonstrate that the management team is capable of overseeing the proposed business. Reliance on externally appointed local individuals without genuine authority or operational involvement creates the same regulatory concerns in Malta as it would elsewhere.

Banking and safeguarding arrangements should also be assessed before committing to the jurisdiction. The ability to obtain a licence and the ability to operate the intended payment business commercially are related but separate questions.

A Malta application should therefore be driven by a credible operational reason for being there rather than by generic claims that one EU regulator is more permissive than another.

The Netherlands: a sophisticated but demanding payments market

The Netherlands is home to a significant payments and fintech sector and offers access to one of Europe’s most developed digital economies. Payment Institutions are supervised by De Nederlandsche Bank, which also authorises Electronic Money Institutions under the Dutch Financial Supervision Act.

DNB’s approach places strong emphasis on complete and well-substantiated applications. Its authorisation guidance, updated again in March 2026, makes clear that the quality and completeness of the application largely determine how smoothly the assessment proceeds and that missing or inadequate documentation can lead to delay or rejection.

The Netherlands can be attractive for established fintechs that intend to build significant local management and operations and value proximity to Northern European markets, banks and payment infrastructure. The regulator’s prudential and governance expectations are substantial, so the jurisdiction is generally better suited to applicants prepared to invest properly in the regulated entity rather than create a minimal licensing subsidiary.

DNB also continues to develop its supervisory expectations after authorisation. In 2026 it specifically required payment and e-money institutions to review exit plans, reinforcing the broader European movement towards stronger governance, resilience and orderly wind-down arrangements.

When does the Netherlands make commercial sense?

The Netherlands is particularly relevant where the business already has founders, management, customers or technology operations in the country. Establishing a Dutch-regulated entity is easier to justify where the Netherlands is genuinely part of the firm’s strategic centre rather than a jurisdiction selected only for licensing.

The country can also fit businesses serving sophisticated B2B or technology-driven payment markets where access to the Dutch and neighbouring European ecosystem is commercially important. An international company with existing Benelux operations may find it more coherent to locate the regulated institution alongside those functions.

Applicants should nevertheless expect a detailed authorisation process and significant scrutiny of governance, financial resources, AML, safeguarding, outsourcing and operational resilience. The licence should be treated as the regulatory foundation of a real Dutch financial institution rather than an EU passport obtained through a local shell.

DNB’s current EMI authorisation guidance provides detailed information on its application expectations.

Luxembourg: strong financial-services infrastructure for the right model

Luxembourg is one of Europe’s largest cross-border financial centres and can be relevant to payment and e-money businesses connected with wider financial-services, investment, wealth or international corporate structures. The Commission de Surveillance du Secteur Financier authorises PIs and EMIs under Luxembourg’s payment-services legislation.

The jurisdiction offers deep financial-services infrastructure and a large ecosystem of banks, investment firms, fund businesses and international service providers. This can make Luxembourg commercially attractive where payments or e-money form part of a broader regulated financial proposition rather than a standalone consumer fintech app.

The same characteristics mean that Luxembourg should not be approached as a low-cost or low-substance licensing jurisdiction. Applicants need an appropriate Luxembourg legal entity, credible management and governance, adequate financial resources and a complete regulatory framework supporting the activities to be undertaken.

For the right international group, Luxembourg can provide a strong institutional base from which to passport payment or e-money services across Europe. For a very early-stage fintech whose only objective is obtaining an inexpensive EU authorisation, the level of infrastructure and substance required may make another genuine home jurisdiction more proportionate.

The CSSF publishes its PI and EMI authorisation procedure and the documentation expected from applicants.

France: attractive where the French market is strategically important

France is one of Europe’s largest consumer and financial-services markets and can be a strong jurisdiction for businesses intending to build substantial operations there. Payment Institutions and Electronic Money Institutions are authorised and supervised through the Autorité de contrôle prudentiel et de résolution, with the regulatory framework integrated closely into France’s broader banking and financial-services system.

For a fintech whose principal European customers, management or commercial partnerships are in France, obtaining authorisation there can create a coherent regulatory and operating structure. The business can establish genuine local substance, serve its home market directly and use passporting to expand into other EEA jurisdictions where appropriate.

The jurisdiction is less compelling where the founders have no operational connection with France and intend to manage the entire business elsewhere. Regulatory documentation, governance and ongoing supervision need to be integrated into a genuine French establishment rather than being created solely to access an EU passport.

France can also become particularly relevant where payment services interact with MiCA-regulated cryptoasset activities. The ACPR confirmed in 2026 that certain services involving e-money tokens can also constitute payment services, illustrating why firms building combined payments and digital-asset models need to consider overlapping regulatory permissions carefully.

Spain and other EU jurisdictions

Spain, Belgium, Sweden, Denmark, Estonia, Latvia, Cyprus and other EU or EEA jurisdictions can also authorise payment and e-money institutions under the harmonised European framework. The fact that Lithuania, Ireland or Malta are more frequently discussed in fintech licensing does not mean another Member State is unsuitable.

A Spanish fintech primarily serving Spanish customers with its founders, management and operations in Madrid may have a much stronger regulatory rationale for applying in Spain than establishing an artificial entity in Lithuania. The same principle applies to a Swedish payments business operating primarily from Stockholm or a Belgian fintech whose management and customer base are centred in Brussels.

The home state should reflect where the regulated institution will genuinely operate. Selecting a more fashionable fintech jurisdiction can create additional cost and complexity if the company then has to build a second management structure simply to satisfy local substance requirements.

The jurisdiction comparison should therefore begin with the actual operating footprint. Regulatory efficiency matters, but it should support rather than distort the business structure.

Is Lithuania still the fastest country for an EMI licence?

Lithuania’s formal framework remains comparatively transparent. The Bank of Lithuania states that where a complete application has no deficiencies, a PI or EMI licence can be assessed within the applicable three-month statutory period, and it provides direct guidance on the authorisation process.

That should not be translated into a promise that an EMI can routinely be obtained in three months from the day founders decide to apply. The Bank itself states that applications only exceptionally contain no deficiencies and that additional information requests extend the process.

The complete project also includes establishing the company, appointing management, preparing the regulatory framework, capitalising the institution and arranging appropriate operational infrastructure. The time required before formal submission can therefore be as important as the regulator’s statutory assessment period.

A company should choose Lithuania because the jurisdiction fits its operating strategy and the team can satisfy the Bank of Lithuania’s expectations, not because an adviser markets a guaranteed three-month licence.

Is Ireland better than Lithuania for an EMI licence?

Neither jurisdiction is inherently better for every applicant. They serve different business strategies and both apply serious regulatory scrutiny.

Lithuania has a highly developed specialist payments and e-money sector and a regulator with significant experience dealing with fintech authorisations. Ireland offers an English-speaking international financial centre with a large multinational corporate ecosystem and may be especially attractive to global groups that already maintain substantial operations there.

The cost and governance model can also differ. A business establishing substantive senior management in Dublin may have a different staffing and operational cost base from one building a team in Vilnius, while the availability of group personnel or existing operations can reverse that comparison for a company already based in Ireland.

The right decision therefore depends on management location, operating costs, customers, banking, group structure and the firm’s ability to create genuine local substance. Choosing between the two based solely on perceived authorisation speed is too simplistic.

Malta versus Lithuania for a PI or EMI

Malta and Lithuania are both established EU fintech jurisdictions, but the commercial context differs. Lithuania has developed a particularly large specialist payments and e-money ecosystem, while Malta operates within a wider international financial-services environment and offers an English-speaking regulatory and business setting.

The right choice again depends on where management and operations can genuinely sit. A founder already operating from Malta with local directors, staff and infrastructure may have a stronger licensing case there than creating an entirely separate Lithuanian structure, while the opposite may apply to a team already established in the Baltic fintech ecosystem.

Applicants should also compare long-term operating conditions rather than only application processes. Talent availability, salaries, banking, safeguarding, office requirements, professional services and management travel can materially affect the cost of maintaining the regulated institution after authorisation.

A licence is an ongoing regulatory relationship rather than a one-off certificate. The jurisdiction should remain commercially workable several years after the initial application has been approved.

Which jurisdiction has the easiest regulator?

Serious applicants should be cautious about advisers describing any EU regulator as “easy”. European authorities apply a common legal framework, EBA authorisation guidelines and increasingly harmonised supervisory standards, even though application processes and national practices still differ.

The EBA’s peer review of authorisation practices specifically examined inconsistencies between national authorities and highlighted areas such as local substance and the application of PSD2 requirements. One of the purposes of the continuing European reform programme is to reduce regulatory divergence and prevent firms from exploiting material differences between Member States.

A regulator that asks fewer questions at authorisation would not necessarily be commercially advantageous if the result is greater uncertainty during ongoing supervision. Conversely, a demanding application process can provide a more stable foundation where expectations are clear and the firm is properly prepared.

The objective should therefore be to find the most appropriate regulator for the proposed business, not the least demanding one. A high-quality fintech should be capable of satisfying robust regulatory standards wherever it chooses to establish.

Banking and safeguarding can be as important as the regulator

An EU licence is commercially useful only if the firm can build the infrastructure needed to operate it. Payment and e-money institutions require operational banking, and firms holding customer funds need appropriate safeguarding arrangements under the applicable national implementation of European requirements.

Banks perform their own risk assessments and are not obliged to onboard a firm simply because a regulator has granted authorisation. Some business models, jurisdictions, customer sectors or transaction corridors can make banking relationships more difficult even where the underlying licence is valid across Europe.

Applicants should therefore investigate banking and safeguarding options during the jurisdiction-selection process. A country with an efficient licensing process may be less attractive if the proposed business cannot secure appropriate banking infrastructure or if all critical relationships must ultimately be established elsewhere.

This does not mean that every banking relationship must be domestic. European institutions can use cross-border arrangements subject to the relevant regulatory requirements, but the complete operating structure should remain credible and manageable.

Cost should not be assessed using the application fee alone

National regulatory application fees vary considerably across Europe, but the regulator’s filing fee is normally a relatively small part of the total cost of establishing an authorised institution. Lithuania, for example, currently publishes a state levy of €898 for a standard PI licence, yet the real cost of establishing the business includes capital, management, compliance, local staff, professional advisers, technology, office infrastructure and banking arrangements.

A jurisdiction with a low regulatory application fee can therefore become more expensive overall if the firm needs to recruit a completely new management team there. Conversely, a jurisdiction with higher professional or operating costs may be commercially efficient where the company already has employees, infrastructure and senior management in that country.

The relevant comparison is the total cost of operating a compliant regulated institution over several years. Initial capital is broadly driven by the harmonised European framework, while the more substantial differences often arise from staffing, local substance, regulatory preparation and ongoing operations.

Founders should therefore prepare a jurisdiction-by-jurisdiction operating budget rather than comparing licence filing fees in isolation.

Initial capital is broadly harmonised across the EU

Under the current PSD2 framework, PI initial capital is generally €20,000 for money remittance, €50,000 for payment initiation services and €125,000 for the payment services subject to the highest capital tier. The initial capital requirement for a full EMI is €350,000.

These common European thresholds mean that choosing a different Member State does not usually allow a full-scale EMI to avoid the core €350,000 capital requirement. National implementation and ongoing prudential calculations still need to be considered, but the basic regulatory model is harmonised.

This is another reason regulatory arbitrage between EU states has limited value. The material differences are increasingly about supervisory approach, substance, process and operating environment rather than avoiding fundamental prudential standards.

Businesses seeking a substantially lower-capital structure should first determine whether their intended activities genuinely qualify for a smaller or exempt regime. The business model should not be artificially constrained merely to obtain a cheaper licence if the planned product requires full authorisation.

Management location should often determine the home state

One of the simplest tests when comparing jurisdictions is to ask where the people genuinely responsible for the regulated business will live and work. If the CEO, compliance leadership, finance team and principal operational functions are already concentrated in one EU Member State, that country may provide the most natural regulatory home.

Moving the licence elsewhere can create duplication. The group may need local directors, additional compliance staff, separate office infrastructure and complex governance processes to demonstrate that meaningful management occurs in the authorised jurisdiction.

For international founders without an existing European base, there is more flexibility because the operating structure can be designed around the selected jurisdiction. In that situation, talent availability, language, cost, access to banking and the regulator’s experience with the proposed model can all influence the decision.

The location should nevertheless be credible from the beginning. A regulator is likely to challenge a structure where all commercial and strategic decisions are clearly made in another country and the licensed entity exists primarily to hold permissions.

Customer market also matters

A firm does not necessarily need to be authorised in the country containing the largest number of its customers because passporting allows cross-border service provision. However, a dominant domestic customer market can still influence the most sensible home state.

A fintech expecting 80% of its customers to be in France, with French-language support and significant French partnerships, may find that a French regulatory base creates operational and commercial advantages. A company building a pan-European B2B product with no dominant national market may have greater flexibility to select a home state based on management and infrastructure.

Host-state requirements also need to be considered. Passporting provides access to the wider EEA market but does not eliminate every national consumer, AML, conduct or reporting consideration that can arise when operating cross-border.

The expansion plan should therefore be mapped before authorisation. A firm should know which markets it intends to enter, whether it will operate remotely or through branches or agents and how those arrangements will affect compliance.

What about the United Kingdom after Brexit?

A licence issued by an EU or EEA regulator does not passport into the United Kingdom. Brexit ended the automatic passporting rights that previously allowed EEA PIs and EMIs to provide regulated payment and e-money services in the UK under their home-state authorisation.

A European fintech wanting to carry on UK-regulated payment services therefore needs to assess whether separate FCA authorisation is required. Similarly, an FCA-authorised PI or EMI does not automatically obtain access to the EU market and generally needs an appropriately authorised EEA entity where it intends to provide regulated services there.

International businesses often operate parallel UK and EU regulatory structures as a result. The group may have an FCA-authorised entity for UK customers and a separately authorised PI or EMI in an EU Member State for EEA business.

The entities can share group technology and other resources where appropriately structured, but each regulated firm needs sufficient governance, financial resources and regulatory control to satisfy its own home regulator.

PSD3 will change the future licensing framework

The current licensing system remains based on PSD2 and the Electronic Money Directive, but PSD3 and the new Payment Services Regulation will materially reshape the framework over the coming years. Political agreement was reached in November 2025, technical work was substantially completed during 2026 and formal adoption is expected later in 2026.

One of the major structural changes is the integration of electronic money institutions into the broader payment institution framework. The separate Electronic Money Directive will ultimately be repealed, with payment and e-money authorisation brought together under the new PSD3 architecture.

The new framework is also designed to increase harmonisation between national regulators, strengthen fraud prevention and consumer protection and reduce inconsistencies in how rules are implemented across Member States. This should gradually narrow some of the historical differences that encouraged firms to view European licensing as a jurisdiction-shopping exercise.

Businesses applying in 2026 should still apply under the rules currently in force, but the future transition should influence strategic planning. A new institution should be designed with enough governance, systems and operational resilience to adapt to PSD3 rather than building only for the minimum requirements of the current regime.

Will an existing EMI licence survive PSD3?

Existing authorised institutions will not simply cease to be regulated when the new framework takes effect, but the move from PSD2 and the Electronic Money Directive into PSD3 will require a transition. The final legislation includes provisions dealing with existing authorisations and the process by which firms move into the new framework.

The exact implementation timetable depends on final formal adoption and publication, which remained pending as of July 2026. Firms should therefore avoid relying on speculative dates before the legislation is finalised and published in the Official Journal.

Existing EMIs should nevertheless expect the regulatory category to become more closely integrated with payment institutions. This could affect permission structures, authorisation records, regulatory documentation and the way future business changes are handled.

For a company applying for a new licence during 2026, the forthcoming framework is not a reason to delay a commercially necessary authorisation. It is a reason to build the institution to a standard that will make the future transition manageable.

Should you buy an existing EU PI or EMI instead?

Acquiring an existing authorised institution can be an alternative to a new licence application where a suitable target is available. The buyer acquires the regulated legal entity rather than simply purchasing a transferable licence, and the transaction will normally require regulatory assessment of the proposed new owners or qualifying shareholders.

The acquisition can be attractive where the target already has appropriate permissions, management infrastructure, banking and safeguarding arrangements. It can also become expensive or risky where the business carries historic compliance weaknesses, unsuitable permissions, regulatory remediation or commercial arrangements that will not survive the change in ownership.

A buyer should therefore conduct regulatory due diligence before committing to the transaction. Permissions, supervisory history, safeguarding, AML, capital, regulatory reporting and material third-party contracts all need to be assessed against the buyer’s intended future model.

Buckingham Capital Consulting supports both buyers and sellers of regulated PIs and EMIs, including target matching, regulatory due diligence, qualifying-holding or change-of-control applications and post-acquisition regulatory changes.

How should you choose between Lithuania, Ireland, Malta and the Netherlands?

The decision should begin with a weighted assessment of regulatory fit, operational substance and commercial infrastructure. Founders should identify where management can genuinely be located, whether experienced compliance and financial crime staff are available and whether the jurisdiction supports appropriate banking, safeguarding and technology relationships.

Lithuania can suit fintechs seeking a mature specialist payments ecosystem and transparent authorisation process, provided the company is willing to establish real local substance. Ireland can suit larger international groups and firms with an existing multinational footprint, while Malta can provide an English-speaking financial-services base for businesses with genuine operations there. The Netherlands can be attractive to sophisticated fintechs prepared for a rigorous supervisory environment and substantial local management.

No jurisdiction should be selected solely because a consultant claims the regulator is easier. The authorisation process may last months, but the regulated relationship can last for many years, making ongoing supervision and operational practicality much more important than saving several weeks during licensing.

The best jurisdiction is therefore the one where regulatory credibility and commercial logic point in the same direction.

A practical jurisdiction-selection process

The first stage should be regulatory perimeter analysis. The firm needs to determine whether it requires PI or EMI authorisation, which payment services are involved, whether e-money is issued and whether any related activities create additional regulatory requirements.

The second stage is to map the intended operating model across Europe. Management location, staffing, customer markets, technology, safeguarding, banking and group functions should be considered together so that the home state reflects how the business will actually operate.

A shortlist of two or three jurisdictions can then be compared using regulatory expectations, substance requirements, likely application process, operating costs and infrastructure availability. Early regulator engagement can also be useful where the business model is novel or the proposed structure is complex.

Only after this analysis should the company incorporate the regulated applicant and begin preparing the full application. Choosing the jurisdiction first and attempting to force the operating model around that decision often creates unnecessary cost and weakens the regulatory rationale.

How Buckingham Capital Consulting can help

Buckingham Capital Consulting has advised payment and electronic money businesses since 2013 and supports firms seeking PI and EMI authorisation in the UK and across Europe. Our work begins with the business model rather than a predetermined jurisdiction, allowing us to assess the permissions required, intended markets, management structure and operational needs before recommending an appropriate regulatory route.

For European licensing projects, we can compare potential jurisdictions and help determine where the firm can establish credible regulatory substance and operate efficiently over the long term. We then support the complete authorisation workstream, including the regulatory business plan, programme of operations, financial forecasts, governance, safeguarding, financial crime, risk management, outsourcing, wind-down planning and supporting policies and procedures.

We also support international groups establishing parallel UK and EU regulated structures and firms acquiring existing European PIs or EMIs. This can include regulatory due diligence, buyer and seller matching, qualifying-holding applications, ownership changes and post-acquisition regulatory restructuring.

The appropriate jurisdiction should be determined from the specific business rather than from generic rankings of the “easiest” European licence. To discuss an EU Payment Institution or Electronic Money Institution application and compare suitable jurisdictions for your business, contact Buckingham Capital Consulting.

Frequently asked questions

Which EU country is best for an EMI licence in 2026?

There is no single best country for every EMI. Lithuania, Ireland, Malta, the Netherlands, Luxembourg and other EU jurisdictions all operate within the common European regulatory framework but differ in supervisory approach, operating environment and practical expectations around local substance. The best jurisdiction is normally the one where the firm can establish genuine management and operations while supporting its banking, safeguarding, staffing and commercial strategy.

Is Lithuania still the easiest place to obtain an EMI licence?

Lithuania has a highly developed fintech licensing ecosystem and the Bank of Lithuania publishes a three-month statutory assessment period for complete applications without deficiencies. However, the regulator itself notes that applications only exceptionally contain no deficiencies and that additional information extends the process. Lithuania should therefore not be treated as an automatic or guaranteed fast-track jurisdiction, and applicants need genuine local substance and a regulatory framework capable of satisfying ongoing supervision.

Can an Irish EMI passport throughout Europe?

Yes. An EMI authorised in Ireland can use the applicable EEA passporting procedures to provide permitted services in other Member States, just as an EMI authorised in another EEA home state can passport its services subject to the relevant notification process. The Central Bank of Ireland remains the home regulator and expects substantial governance, risk management, safeguarding, AML and local substance from authorised firms.

How much capital is required for an EU EMI or Payment Institution?

A full EMI currently requires minimum initial capital of €350,000 under the European e-money framework. For a PI, the initial capital requirement is generally €20,000, €50,000 or €125,000 depending on the payment services provided. Ongoing own-funds requirements also apply and can exceed the initial minimum as the institution grows.

Can one European EMI licence cover all EU countries?

An EMI authorised in one EU or EEA Member State can generally passport its authorised services into other EEA countries through the applicable freedom-to-provide-services or freedom-of-establishment procedures. This does not eliminate all host-state requirements, and the firm must maintain genuine substance and supervision in its home Member State. Since Brexit, an EU EMI licence does not passport into the UK, so separate FCA authorisation may be required for UK-regulated business.