Choosing the home regulator is one of the most consequential decisions in a European payments business. The authorisation passports across the European Economic Area (EEA), but the jurisdictions are not interchangeable: they share the PSD2 and Electronic Money Directive framework, yet differ in supervisory approach, local presence expected, fees, ecosystem and banking access.
The right home state is where the business will genuinely be managed, where its decision-makers sit and where it can build banking, safeguarding and staff for the long term. The question is which jurisdiction gives the strongest base for the business you intend to run.
| Jurisdiction | Regulator | Best suited to |
|---|---|---|
| Lithuania | Bank of Lithuania | Pan-European fintechs willing to build a Vilnius team; direct SEPA access through CENTROlink |
| Ireland | Central Bank of Ireland | International and US-linked groups wanting an English-speaking financial centre |
| Malta | Malta Financial Services Authority (MFSA) | Groups wanting an English-speaking base, often alongside other Maltese licences |
| Netherlands | De Nederlandsche Bank (DNB) | Larger fintechs and B2B payment models focused on northern Europe |
| Luxembourg | CSSF | Corporate, wealth and fund-adjacent payment models |
| France | ACPR | Firms whose main market and management are French |
| Germany | BaFin | Firms serving German-speaking consumers and merchants from a German team |
| Spain | Banco de España | Firms serving Spanish-speaking markets with management in Spain |
| Jurisdiction | Application fee | Published decision standard |
|---|---|---|
| Lithuania | EMI €1,463; PI €898 | 3 months from a complete file; completeness check in 5 business days |
| Ireland | None | 3 months from a complete file; 90% of assessments within 90 business days |
| Malta | €10,000; €15,000 for e-money with payment services | 3 months from receipt |
| Netherlands | €10,400 | 3 months from a complete file |
| Luxembourg | €30,000 | 3 months; 12 months at most |
| France | None | 3 months from a complete file |
| Germany | Charged by time spent | 3 months; 12 months at most |
| Spain | None | 3 months from a complete file |
No jurisdiction is best for every firm. The best one for you is where you can show credible central administration, senior management and a genuine reason to be there, and where you can operate commercially after authorisation.
Decide which licence the product needs before comparing countries. The permission analysis sets the capital, the safeguarding model and the regulator's line of questioning everywhere.
A payment institution is authorised under PSD2 (Directive (EU) 2015/2366) and national law for one or more payment services: payment accounts, credit transfers and direct debits, card issuing, merchant acquiring, money remittance, payment initiation and account information. Initial capital is €20,000 for money remittance, €50,000 for payment initiation and €125,000 for the core services. A payment institution cannot issue electronic money.
An EMI issues electronic money, meaning a stored monetary value issued on receipt of funds and accepted for payment, and may also provide payment services. It is authorised under the Second Electronic Money Directive (Directive 2009/110/EC). The EMI licence fits stored-value wallets, e-money funded accounts, prepaid products, multi-currency accounts and e-money linked cards. A full EMI needs €350,000 of initial capital and own funds of at least 2% of average outstanding e-money.
Let the product decide. A firm that only moves money from payer to payee does not need an EMI, and a payment institution is more proportionate. A firm whose customers hold a balance for later use needs an EMI, and should not reshape the product to fit a payment institution licence because the capital is lower. Our guide to the EU payment institution licence sets out the eight services and the capital rules in full.
Under the Markets in Crypto-Assets Regulation (MiCA, Regulation (EU) 2023/1114), only a credit institution or an EMI may issue an e-money token, meaning a stablecoin that references one official currency. A firm planning a euro or dollar stablecoin for the EU therefore needs an EMI licence, plus the MiCA notification and white paper, and should choose its jurisdiction with both regimes in mind.
Several Member States offer a restricted or small institution route for low volumes, valid in that country only. Lithuania's restricted EMI licence has no minimum capital where average outstanding e-money stays below €900,000, and a 2-month decision period; France offers a simplified EMI at €100,000 of capital. These routes cannot be passported, so they suit a domestic launch rather than a European business.
| Jurisdiction | Small or restricted route | Limit |
|---|---|---|
| Lithuania | Restricted EMI, no minimum capital, €1,235 levy | Average outstanding e-money up to €900,000 |
| Lithuania | Restricted payment institution, €682 levy | Up to €3 million a month |
| France | Simplified EMI at €100,000; simplified PI at €40,000 | Set by the Monetary and Financial Code |
| Netherlands | E-money exemption, registered not supervised | Outstanding e-money up to €5 million |
| Estonia | E-money exemption | Average outstanding e-money up to €500,000 |
| Germany, Luxembourg, Malta | No small regime | Full authorisation only |
Yes. An authorised payment institution or EMI can offer its services in the other 29 EEA countries through passporting, either cross-border under the freedom to provide services or through a branch, agents or (for EMIs) distributors under the freedom of establishment. The firm notifies its home regulator, which forwards the notification to the host regulator within one month.
Passporting does not create 30 licences. The home regulator remains responsible for authorisation and prudential supervision: capital, safeguarding, governance, qualifying holdings, outsourcing and material changes. Host regulators keep defined powers, mainly for conduct and anti-money laundering rules applying to branches and agents. Choose a home regulator you can work with for many years, because the relationship continues long after the licence is granted.
PSD2 Article 11 requires an authorised payment institution to have its head office in the Member State that licenses it and to carry out at least part of its payment business there. The same principle applies to EMIs. Regulators test whether central administration and decision-making actually happen in the home state.
The European Banking Authority's 2023 peer review of authorisation under PSD2 found that national regulators had interpreted substance differently and asked them to converge on a consistent, demanding standard. Since then, regulators have tested substance more closely.
In practice, regulators look for:
| Jurisdiction | Local presence the regulator expects |
|---|---|
| Lithuania | Registered office and head office in Lithuania, with senior management and operations there |
| Ireland | Board decisions, financial control, compliance and risk in Ireland; at least one independent non-executive director |
| Malta | Directed from Malta by at least two people; compliance officer and MLRO in post |
| Netherlands | At least two day-to-day managers working substantially from the Netherlands |
| Luxembourg | Central administration and registered office in Luxembourg |
| France | Two effective managers in France |
| Germany | Head office and at least two managing directors in Germany; AML officer at management level |
| Spain | Registered office, central administration and effective management in Spain |
The substance needed scales with size and complexity. A start-up payment institution may begin with a small local team, provided the people responsible for the regulated business are genuinely there and the plan shows how the team will grow.
Lithuania has one of the largest specialist payment and e-money sectors in the EU. The Bank of Lithuania publishes clear guidance, runs dedicated fintech engagement and has deep experience of payment and e-money models. Authorised institutions can join CENTROlink, the central bank's payment system, for direct access to SEPA euro payments.
The Bank of Lithuania checks an application for completeness within 5 business days and decides within 3 months of a complete file. Where it asks for more information, the 3 months run again from the date the information arrives. The state levy is €1,463 for an EMI licence, €1,235 for a restricted EMI licence and €898 for a payment institution licence. The registered office and head office must be in Lithuania.
The Bank of Lithuania states that the operating plan must match the founders' ability to deliver it and that the institution must be ready to provide services safely from the day of authorisation. It publishes its decisions, including refusals, which makes its standard transparent. See our Lithuania EMI licence page for the full requirements.
Lithuania's 3-month decision period is transparent, but it runs from a complete file. The end-to-end project also includes incorporation, appointments, the regulatory framework, capital and infrastructure. Choose Lithuania for its fit with the business; a well-prepared file there, as elsewhere, is planned at 6 to 8 months from submission to authorisation.
Ireland is a leading base for international fintech and financial groups: an English-speaking EU state with a large multinational presence. The Central Bank of Ireland runs a structured, risk-based process with explicit standards for applicants, and charges no application fee. Authorised firms pay an annual industry funding levy with a minimum of €5,000.
The Central Bank's service standard is to complete 90% of assessments within 90 business days of a complete application, and the clock pauses where key areas are not addressed. It focuses on governance, safeguarding, outsourcing, operational and IT risk, financial crime and orderly wind-down. It expects board decision-making, financial control, compliance and risk management in Ireland, at least one independent non-executive director, and compliance and risk functions that are not outsourced.
The process runs from a Pre-Application Key Facts Document and an initial meeting through a key information check, full assessment with interviews and a "minded to authorise" letter to the grant. Detail is on our Ireland EMI licence page.
Neither is better in general. Lithuania offers a specialist payments sector and a regulator focused on fintech models; Ireland offers an English-speaking financial centre attractive to global groups. A Dublin team and a Vilnius team carry different cost bases, and existing group staff in either country can reverse the comparison. Decide on management location, cost, customers, banking and group structure.
Malta is a long-established international financial centre. The MFSA authorises payment institutions and EMIs under the Financial Institutions Act and its rulebook, and works in English. Its experience spans payments, e-money, investment services, insurance and digital finance, which suits groups with several regulated products.
The application fee is €10,000 for one licence category and €15,000 where e-money and payment services are combined. Annual supervisory fees start at €25,000 for a payment institution and €35,000 for an EMI, plus a variable element. The MFSA grants an in-principle approval first, with pre-licensing conditions to be met within six months, and the safeguarding bank's engagement letter must be in place before the firm starts operating.
The company must be directed from Malta by at least two people, with a compliance officer and an MLRO in place at all times. See our Malta EMI licence page.
Both are established fintech jurisdictions. Lithuania has a larger specialist payments ecosystem; Malta a broader international financial services environment. A team already in Malta has the stronger case there, and a Baltic-based team favours Lithuania. Compare talent, salaries, banking, office costs and travel over the life of the licence, not only the authorisation.
The Netherlands has a sophisticated payments and fintech sector and a highly digital economy. DNB authorises payment institutions and EMIs under the Financial Supervision Act (Wft), and the Authority for the Financial Markets (AFM) supervises conduct. The application fee is €10,400.
DNB expects complete, well-evidenced applications and publishes the success factors it looks for. Day-to-day management must be carried out by at least two people working substantially from the Netherlands. Customer funds are typically safeguarded through a separate foundation (a stichting derdengelden), and the safeguarding account or bank commitment letter must be in place before the licence is granted. Anyone acquiring 10% or more needs a declaration of no objection, which DNB assesses in parallel.
Luxembourg is one of Europe's largest cross-border financial centres. The CSSF authorises payment institutions and EMIs under the Law of 10 November 2009 on payment services. The examination fee is €30,000 and the annual fee €30,000, rising to €40,000 for institutions above €1 billion of combined volume.
Central administration and the registered office must be in Luxembourg. The CSSF starts with an initial meeting at which the applicant presents the business plan with diagrams of fund and data flows, and decides within 3 months of a complete file and no later than 12 months.
Luxembourg suits international groups where payments or e-money sit within wider financial, investment, wealth or corporate structures, and that will benefit from the depth of its banking and fund sector.
France is one of Europe's largest consumer and financial services markets. The ACPR authorises payment institutions and EMIs under the Monetary and Financial Code, charges no application fee and works in French. Its Fintech Charter commits to a presentation meeting within two weeks of a request and to fixed response times during the assessment.
Two effective managers must be based in France. France also offers simplified authorisations without passporting: a payment institution at €40,000 of capital below €3 million a month, and an EMI at €100,000. France makes sense where the main customers, management or partnerships are French, with passporting to expand later.
BaFin authorises payment institutions and EMIs under the Payment Services Supervision Act (ZAG). Capital is €350,000 for an EMI and up to €125,000 for a payment institution, and BaFin generally applies own funds Method B. Fees are charged by time spent, with an annual cost allocation afterwards.
The head office must be in Germany, with at least two managing directors and an anti-money laundering officer at management level in Germany. BaFin decides within 3 months of a complete file, and an application not completed within 12 months is refused. Germany has no small payment institution regime. It suits firms whose main market is German-speaking consumers and merchants and that will build a full German team.
Every EU and EEA state authorises payment institutions and EMIs under the same framework, and a less discussed jurisdiction is often the right one.
A Spanish fintech serving Spanish customers from Madrid, or a Swedish business run from Stockholm, will usually be best licensed at home. Choosing a fashionable jurisdiction instead can mean building a second management structure the business does not need.
Every regulator works to the same statutory period: a decision within 3 months of a complete application. The clock stops while the regulator waits for answers, so the length of the project depends mainly on how complete the file is on the day it is submitted and how quickly questions are answered.
| Phase | What happens | Duration |
|---|---|---|
| Preparation | Incorporation, hires, business plan, policies, bank discussions | 4 to 8 weeks |
| Assessment | Completeness check, questions, interviews | 4 to 6 months |
| Conditions | Capital paid in, safeguarding live, systems tested | 1 to 2 months |
| Passporting | Notifications to host regulators | 1 to 3 months |
The firm plans payment institution and EMI authorisations at 6 to 8 months from submission in each of the jurisdictions above. Local-language jurisdictions add translation time before submission rather than after it. The Central Bank of Ireland treats a file left without a response for 60 business days as dormant, and Malta and Luxembourg treat silence at the end of the period as a refusal, so a fast, complete response to each question shortens every timeline.
An EU licence is only as useful as the operating infrastructure behind it: safeguarding accounts for customer funds, operating accounts, scheme access and payment rails. Banks carry out their own risk assessment and decide independently whether to onboard an authorised institution.
Some business models, sectors and payment corridors take longer to bank, even with a valid licence. Investigate safeguarding and operating banks during jurisdiction selection, because Malta, the Netherlands and others expect the safeguarding arrangement agreed before the licence is granted. Cross-border banking arrangements are possible, provided the overall structure remains credible and manageable for the home regulator.
Lithuania's CENTROlink and the growing number of national central banks that let payment institutions settle directly are worth weighing: direct access reduces dependence on a correspondent bank.
Filing fees are usually a small part of the total. The real cost of a compliant institution includes the initial capital, the directors and control functions, local staff, office, technology, advisers and banking, run for several years.
| Cost item | What drives it |
|---|---|
| Initial capital | Fixed by licence type: €350,000 for an EMI, up to €125,000 for a payment institution |
| Own funds above the minimum | Volumes, outstanding e-money and the method the regulator applies |
| Local team | Salary levels and how many directors and control functions must be resident |
| Annual supervisory fees | From a minimum of €5,000 in Ireland to €30,000 in Luxembourg and €35,000 for an EMI in Malta |
| Technology | Safeguarding reconciliation, transaction monitoring and DORA ICT controls |
| Language | Translation and local-language staff in France, Germany and Spain |
A low-fee jurisdiction can cost more overall if a new management team must be recruited there, and a higher-fee jurisdiction can be efficient where staff and infrastructure already exist. Build a jurisdiction-by-jurisdiction operating budget over three years before deciding.
| Licence | Initial capital | Ongoing own funds |
|---|---|---|
| EMI | €350,000 | At least 2% of average outstanding e-money (Method D), plus a payment services calculation where relevant |
| Payment institution, core services | €125,000 | Method A, B or C as the regulator directs |
| Payment initiation | €50,000 | Initial capital, plus professional indemnity insurance |
| Money remittance only | €20,000 | Method A, B or C with a 0.5 scaling factor |
| Account information only | None | Professional indemnity insurance |
Choosing another Member State does not reduce the €350,000 minimum for a full EMI. Regulators may vary the own funds requirement by up to 20% either way, and national practice differs on the method applied, but the real differences between jurisdictions lie in supervision, substance and process.
The simplest test is where the people responsible for the regulated business live and work. If the chief executive, compliance officer, finance lead and key functions are in one Member State, that is usually the natural home. Licensing elsewhere can mean duplicating directors, compliance staff, offices and governance.
International founders without a European base have more choice, and talent, language, cost, banking and the regulator's experience of the model then decide it.
The licence need not be in the country with most customers, because passporting allows cross-border service. A dominant domestic market still shapes the choice: a fintech with 80% of its customers in France, French-language support and French partnerships will often be better based in France. A pan-European B2B business has more freedom. Map the expansion plan before applying: which countries, served remotely or through branches or agents, and what host-state rules apply.
The licence is one part of launching a European fintech. Five decisions shape the application and should be settled first.
EU and EEA licences do not passport into the UK. Passporting between the UK and the EU ended on 31 December 2020, so a European fintech serving UK customers needs separate FCA authorisation, and an FCA-authorised payment institution or EMI needs an EU-authorised entity for EU business.
International groups often run parallel UK and EU entities. They can share technology and group resources under documented outsourcing, provided each entity has its own board, capital, MLRO, safeguarding and control.
Licensing in 2026 remains under PSD2 and the Electronic Money Directive. The third Payment Services Directive (PSD3) and the new Payment Services Regulation (PSR) will reshape it. The Council and Parliament reached a provisional agreement on 27 November 2025, and the Parliament's ECON committee approved the agreed texts on 5 May 2026. As at 17 October 2026, EUR-Lex lists both only as Commission proposals and the Parliament's Legislative Observatory shows them awaiting the Council's first reading position, with an indicative plenary date of 14 December 2026.
The central change for licensing is that the Electronic Money Directive is repealed and issuing e-money becomes a payment service, so EMIs become payment institutions. In the agreed text, initial capital becomes €250,000 for issuing e-money and €150,000 for the core payment services. The reform also aims to narrow differences between national regulators and strengthen fraud prevention.
Yes. The agreed text contains transitional arrangements that let existing EMIs and payment institutions continue, with a longer period for EMIs that used the small EMI waiver. The exact deadlines will run from entry into force, so they are fixed only once the texts are published in the Official Journal. Expect to update permissions, documentation and the safeguarding framework through the transition.
PSD3 is not a reason to delay a 2026 application. It is a reason to build governance, safeguarding and fraud controls to the agreed standard now. Our guide to PSD3 and the Payment Services Regulation sets out each change.
Acquiring an authorised company is an alternative where a suitable target exists. The buyer acquires the regulated legal entity, not a transferable licence, and the regulator must approve each new owner of 10% or more before completion.
An acquisition works where the target has the right permissions, management, banking and safeguarding already in place. It needs full regulatory due diligence: permissions, supervisory history, safeguarding, anti-money laundering, capital, reporting and third-party contracts. The firm's transactions and change of control practice supports buyers and sellers through target selection, due diligence and the qualifying holding application.
No EU regulator offers a lighter standard: all apply PSD2, the Electronic Money Directive and the EBA guidelines, and the EBA's peer review work is narrowing national differences further. Clear, demanding expectations give a firm a stable base for supervision after authorisation. Select the regulator that best fits the business, in three stages.
| Factor | What to test |
|---|---|
| Management location | Where the directors, compliance officer and MLRO will live and work |
| Customer market | Share of customers by country and the language they are served in |
| Banking and safeguarding | Which banks will open safeguarding and operating accounts for the model |
| Talent | Availability and cost of experienced compliance, risk and payments staff |
| Regulator experience | Whether the regulator has authorised similar models |
| Total cost | Three-year budget for team, office, fees and technology |
Only then incorporate the applicant and prepare the full application. Choosing the jurisdiction first and fitting the model around it adds cost and weakens the case for being there.
No single country is best. The right home state is where management, operations, banking, safeguarding and staff can genuinely sit; Lithuania and Ireland are the most common choices for pan-European models.
Lithuania applies the same EU standard as other regulators. It offers a clear process, a 3-month decision period from a complete file and a €1,463 state levy, with real local substance expected.
Yes. An Irish EMI can passport to the other 29 EEA countries by notification, while the Central Bank of Ireland remains its home regulator.
A full EMI needs €350,000 of initial capital. A payment institution needs €20,000, €50,000 or €125,000 depending on its services, and own funds can rise above the minimum as the firm grows.
Ireland, France and Spain charge no application fee. Lithuania charges €898 for a payment institution and €1,463 for an EMI; Luxembourg charges €30,000.
No. EU licences have not passported into the UK since 31 December 2020, so UK business needs separate FCA authorisation.
Yes, once adopted. The agreed text repeals the Electronic Money Directive and makes issuing e-money a payment service, with transitional arrangements for existing EMIs; as at 17 October 2026 it is not yet adopted.
Buckingham Capital Consulting has obtained payment and e-money licences in the UK and the EU since 2013, including a Central Bank of Ireland EMI licence for Own Solutions and FCA EMI licences for Dzing Finance, Hryze and HFS. The firm compares jurisdictions against the client's operating model, prepares the full application and arranges the safeguarding and operating accounts in the chosen Member State.
Speak to an expert: WhatsApp +44 7563 115980, Telegram @buckinghamcapital or info@buckinghamcapitalconsulting.co.uk.
This article is general information, reviewed against the regulator’s published requirements on the date shown. It is not legal advice; the regulator’s current publications take precedence.