COREDO > Financial Licensing in the European Union

Financial Licensing in the European Union

The European Union offers one of the world’s largest financial markets, enabling licensed companies to operate throughout the EEA under the passporting regime. EU financial licences provide access to payment, investment, banking, and other regulated financial services within a unified European regulatory framework.

Since 2016, COREDO has been assisting clients with obtaining financial licences across EU countries, providing full support — from selecting the appropriate jurisdiction and preparing documentation to liaising with regulators and securing the licence.

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Cost of the service
from 8 500 EUR

EU Unified Financial Services Market

The EU’s unified regulatory space for financial services is built on the principle of “passporting”. A financial institution that has obtained a licence in one EU country (home state) is entitled to provide services across all other member states and EEA countries without the need to undergo separate licensing procedures in each jurisdiction. The notification process is conducted through regulators — from the “home” to the “host” authority.

This mechanism is established in key directives:

PSD2

(Directive 2015/2366/EU on Payment Services) — for payment institutions and EMI

EMD2

(Directive 2009/110/EU on Electronic Money Institutions) — for electronic money issuers

MiFID II

(Directive 2014/65/EU on Markets in Financial Instruments) — for investment companies

CRD IV

(Directive 2013/36/EU on Capital Requirements) — for credit institutions and banks

MiCA

(EU Regulation 2023/1114 on Markets in Crypto-assets) — for crypto-asset service providers (CASP)

Passporting allows financial companies with a single licence from one EU country to serve the entire EEA market, making obtaining an EU licence a strategically advantageous decision for international business.

Types of Financial Licences in the EU

The European Union offers several main categories of financial licences. The choice of a specific licence type is determined by the planned activities, transaction volume, and strategic objectives of the company.

Licence Type	Regulatory Basis	Min. Share Capital	Key Activity
EMI (Electronic Money Institution)	EMD2 (2009/110/EC), Art. 4	EUR 350,000	Issuance of electronic money, payment services
PSP / PI — Money Transfers	PSD2 (2015/2366), Art. 7(a)	EUR 20,000	Money transfer services
PSP / PI — Payment Initiation	PSD2 (2015/2366), Art. 7(b)	EUR 50,000	Payment initiation services
PSP / PI — Full Range of Services	PSD2 (2015/2366), Art. 7(c)	EUR 125,000	All payment services under Annex I of PSD2
Investment Company (MiFID II)	MiFID II (2014/65/EU)	EUR 50,000 – EUR 730,000	Brokerage, dealing, management services
Bank (Credit Institution)	CRD IV (2013/36/EU), Art. 12	EUR 5,000,000	Deposit acceptance, lending
CASP (Crypto-asset Service Provider)	MiCA (2023/1114), Art. 62	EUR 50,000 – EUR 150,000	Storage, exchange, trading of crypto-assets

The amounts listed are minimum regulatory capital requirements established by European legislation. They do not include the cost of COREDO’s licensing advisory services.

Electronic Money Institution (EMI)

EMI is the most sought-after type of financial licence in the EU for fintech companies. An EMI licence allows the issuance of electronic money, opening client payment accounts, executing transfers, issuing cards, and conducting a wide range of payment operations.

Legal basis: Directive 2009/110/EC (EMD2), implemented in all EU member states. In 2025, a provisional agreement was reached on PSD3, which is intended to merge the EMD2 regime with a broader directive on payment services. Existing EMI licences remain valid for 24 months from the date PSD3 enters into force.

Advantages of an EMI licence:

Passporting throughout the EEA (30 countries) based on a single licence through a notification procedure;
Ability to provide a comprehensive range of payment services from Annex I to PSD2;
Right to issue electronic money and manage client funds through segregated accounts.

The regulatory minimum capital for EMI is EUR 350,000 in accordance with Art. 4 of EMD2.

Payment Institution (PSP / PI)

Payment institutions, licensed under PSD2, occupy a niche between EMI and banks. Unlike EMI, they cannot issue electronic money; however, they can provide most payment services: transfers, payment initiation, acquiring.

Capital requirements depend on the type of activity:

EUR 20,000 — money transfers only (Art. 7(a) of PSD2);

EUR 50,000 — payment initiation services (Art. 7(b) of PSD2);

EUR 125,000 — full range of payment services (Art. 7(c) of PSD2).

Payment institutions also enjoy the right of passporting throughout the EEA in accordance with Art. 28 of PSD2, which makes them an attractive option for companies with limited startup capital.

Investment Services Licence (MiFID II)

Companies intending to provide investment services — brokerage, dealing, asset management, investment consulting, underwriting — must obtain authorization in accordance with MiFID II (Directive 2014/65/EU). ESMA (European Securities and Markets Authority) is responsible for oversight and implementation of MiFID II at the EU level.

Capital requirements for investment companies vary depending on the type of services provided and the category of firm — from EUR 50,000 to EUR 730,000 (for dealers operating with own capital). Investment companies also enjoy the right of passporting throughout the EEA in accordance with Art. 34-35 of MiFID II.

Banking Licence (CRD IV)

A banking licence (authorization of a credit institution) is the most complex and capital-intensive type of financial licence in the EU. It is regulated by Directive CRD IV (2013/36/EU) in conjunction with Regulation CRR (EU) 575/2013. The minimum share capital for a bank in the EU is EUR 5,000,000 (Art. 12 CRD IV). In special cases provided for under national legislation, the threshold may be lowered to EUR 1,000,000.

Banking authorization is granted by national competent authorities (in the eurozone, with the participation of the ECB within the Single Supervisory Mechanism — SSM). Banks enjoy extended passporting rights throughout the EEA (Art. 17-28 CRD IV), including the opening of branches and remote service provision.

Crypto-Asset Service Provider Licence (CASP / MiCA)

Effective December 30, 2024, throughout the EU, Regulation MiCA (EU) 2023/1114 entered into force — the world’s first comprehensive regulatory regime for crypto-assets. Companies providing crypto-asset services (storage, exchange, trading platform, crypto-asset consulting, etc.) are required to obtain CASP authorization from the competent authority of one of the EU countries.

Capital requirements under MiCA:

EUR 50,000 — for advisory and related services;

EUR 125,000 — for crypto-asset storage and exchange;

EUR 150,000 — for crypto-asset trading platform operators.

An authorized CASP is entitled to provide services throughout the EEA on the basis of passporting, having notified this to host competent authorities through its home regulator. The transition period for CASP operating before December 30, 2024, has been extended until July 1, 2026.

Advantages of a Financial Licence in the EU

Obtaining a financial licence in the EU opens a range of strategic advantages for business:

Access to the Unified Market.

One licence — 30 EEA markets. Passporting under PSD2, EMD2, MiFID II, and CRD IV allows operation throughout Europe’s economic space without re-licensing.

Client and Partner Trust.

Regulatory oversight in the EU is among the most stringent in the world. A European financial licence demonstrates a high standard of corporate governance and compliance, significantly easing the attraction of correspondent banks and institutional partners.

Legal Predictability.

EU financial legislation is harmonized and implemented through directives and regulations applied uniformly. This reduces regulatory risk compared to offshore and less mature jurisdictions.

Scalability.

Starting in one member state, a company can expand its business to other EEA markets without re-authorization — merely by notifying regulators.

Diverse Jurisdictions.

The EU offers a variety of regulatory environments: from the most flexible (Estonia, Lithuania, Czech Republic) to more conservative (Germany, France). This allows selection of an optimal jurisdiction for a specific business model.

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Requirements for the Applicant Company

Despite differences in national implementations of European directives, EU regulators impose similar basic requirements on applicants for a financial licence.

Corporate Requirements.

A company must typically be registered in the country of licensing. Requirements for organizational form (LLC, JSC, etc.) vary by jurisdiction. In most cases, the presence of a real office (registered address or physical presence) in the licensing country is required.

Share Capital Requirements.

Minimum share capital corresponds to regulatory thresholds established by the relevant EU directive (see the table above). Additionally, the company must maintain the required level of own funds on an ongoing basis.

Fit & Proper — Governance Check.

Members of governance bodies (directors, board members, persons exercising key functions) undergo a fit & proper assessment to verify their compliance with business reputation and professional qualification requirements. Convictions for financial crimes are grounds for licence refusal.

Business Plan and Organizational Structure.

The applicant must present a detailed 3-5 year business plan, description of planned services and client segments, corporate structure chart, risk management procedures, AML/CFT policy, and IT infrastructure description.

AML/CFT Compliance.

Requirements for anti-money laundering and counter-terrorist financing (AML/CFT) programs are defined in AMLD5 (Directive 2018/843) and AMLD6 (Directive 2018/1673). It is necessary to appoint a responsible officer (MLRO) and implement appropriate KYC/KYB procedures.

Document Requirements

The document package for obtaining a financial licence in the EU includes:

Notarized copies of passports of directors, shareholders, and beneficial owners;

Proof of residence (utility bill or similar document not older than three months);

Certificates of absence of convictions for directors and beneficial owners;

Documents of education and professional experience of management;

Documents confirming the source of origin of the share capital;

Incorporation documents of the company (articles of association, certificate of registration);

Detailed business plan with financial projections;

Description of planned financial services and mechanisms for their provision;

Internal policies and procedures (AML/CFT, risk management, data protection);

Description of IT platform and technical infrastructure.

The specific composition of the document package depends on the licensing country and the type of licence requested.

Cost of COREDO Services for Financial Licensing in the EU

Jurisdiction	Licence Type	COREDO Service Cost
EU (minimum portfolio threshold)	Financial Licensing	from EUR 40,000 + VAT
Estonia	EMI Licence	from EUR 40,000 + VAT
Estonia	PI / Securities Dealer	from EUR 25,000 + VAT
Lithuania	PI/EMI Licence	from EUR 60,000 + VAT
Poland	NPI/EMI Licence	from EUR 180,000 + VAT
Poland	SPI	from EUR 60,000 + VAT
Czech Republic	PSP/EMI (4 types)	from EUR 40,000 + VAT
Czech Republic	ZISIF §15 (alternative investment fund)	from EUR 8,500 + VAT
Cyprus	CIF Licence	from EUR 75,000 + VAT
Spain	AEMI Licence	from EUR 80,000 + VAT
Portugal	AEMI Licence	from EUR 60,000 + VAT
Switzerland	SRO Licence	from EUR 56,000 + VAT
Canada	MSB Licence	from EUR 25,000 + VAT
Singapore	SPI Licence	from EUR 55,000 + VAT
United Kingdom	AEMI Licence	from EUR 100,000 + VAT

COREDO service costs do not include government fees and regulator charges, which are paid separately in accordance with the tariffs of each jurisdiction.

Payment Terms

COREDO applies a phased payment system tied to key project milestones. This allows clients to manage budget and minimize financial risks:

First payment — upon contract signing and project commencement;

Second payment — after preparation and agreement of the complete document package;

Third payment — after submission of the application to the regulator;

Final payment — upon receipt of the licence.

Specific payment conditions and distribution are determined individually depending on the jurisdiction and project complexity.

Financial Licensing Procedure in the EU

The licensing process in EU countries includes several standard stages, although specific requirements and timelines vary by jurisdiction.

Jurisdiction and Licence Type Selection.

At this stage, the optimal licensing country is determined based on the planned business model, target markets, capital requirements, and time expectations. COREDO conducts detailed analysis and prepares recommendations.

01

Legal Entity Registration.

In most EU countries, only a company registered in that jurisdiction can obtain a licence. COREDO provides services for company registration in all EU member states.

02

Documentation Preparation.

Formation of a complete document package: business plan, internal policies, organizational chart, capital and source of funds documents. This is the most labor-intensive stage, and its quality largely determines the outcome of the regulator’s review.

03

Application Filing.

The application with the complete document package is submitted to the competent regulatory authority of the selected country. Some regulators practice preliminary meetings with applicants to discuss the project before official submission.

04

Regulator Review of the Application.

The regulator analyzes the documents and may request additional information or clarification. Review timelines vary from 3 to 12 months depending on the jurisdiction and licence type.

05

Licence Receipt.

Upon approval of the application, the company receives official authorization to conduct financial activities. To expand operations to other EEA countries, the passporting procedure is initiated through the home regulator.

06

The overall process duration is 6 to 18 months, depending on the jurisdiction and completeness of documentation.

Selecting a Jurisdiction for a Financial Licence in the EU

Each EU member state implements European directives differently, creating variations in licensing conditions, regulator requirements, and application review timelines. COREDO supports clients in more than 15 European jurisdictions:

Estonia (EFSA / Finantsinspektsioon) — traditionally an attractive jurisdiction for fintech companies. Digital infrastructure, e-residency, and relatively tight review timelines make Estonia a popular choice for startups. Learn more about Estonian licensing →

Lithuania (Lietuvos Bankas) — one of the most actively developing fintech hubs in the EU. The Bank of Lithuania actively attracts financial companies, providing clear guidance and predictable authorization processes. Learn more about Lithuanian licensing →

Czech Republic (ČNB) — wide choice of licence types, including PSP, EMI, investment funds (ZISIF), forex, trust, and banking licences. Stable regulatory environment and central location in Europe. Learn more about Czech licensing →

Poland (KNF) — access to the largest Central European market. The Polish Financial Supervision Authority (KNF) authorizes both Small Payment Institutions (SPI) and National Payment Institutions (NPI) with full passporting rights. Learn more about Polish licensing →

Cyprus (CySEC) — a popular jurisdiction for investment companies (CIF). CySEC offers a well-developed licensing process and various tax advantages for international companies. Learn more about Cypriot licensing →

Germany (BaFin) — access to Europe’s largest economy. BaFin is distinguished by high supervisory standards, which provide licensed companies with high reputational status. Learn more about German licensing →

Latvia (FKTK / Latvijas Banka), Spain (Banco de España), Portugal (Banco de Portugal), Greece (Bank of Greece), Italy (Banca d’Italia), France (ACPR) — COREDO supports licensing in each of these jurisdictions.

COREDO Experts in EU Financial Licensing

Financial licensing projects at COREDO are led by experienced lawyers with practical experience in European financial law and regulatory compliance. The COREDO team has supported hundreds of financial licensing projects in EU countries and beyond since 2016, accumulating extensive expertise in working with regulators across various jurisdictions.

Pavel Kos

Head of Legal at COREDO. Has been with the company since 2017, leading the legal team since 2020. Specializes in financial licensing, corporate law, and strategic planning.

Basang Ungunov

Lawyer at COREDO. Has been with the company since 2022, specializing in financial licensing and legal services for international business.

Frequently Asked Questions

Which licence is suitable for a company planning to provide payment services throughout Europe?

For payment services with passporting throughout the EEA, the most common options are an EMI licence (minimum capital EUR 350,000, broad range of payment functions including electronic money issuance) or a payment institution licence (PSP/PI, from EUR 20,000 to EUR 125,000 depending on the type of activity). The choice depends on planned services, business model, and budget.

Can I operate in all EU countries based on a single licence?

Yes. The passporting mechanism, established in PSD2, EMD2, MiFID II, and CRD IV, allows a financial institution authorized in one EU country to provide relevant services throughout all EEA states (27 EU countries + Norway, Iceland, Liechtenstein) through notification between regulators.

How long does it take to obtain a financial licence in the EU?

Timelines vary depending on the jurisdiction and licence type. On average, the complete cycle — from beginning document preparation to licence receipt — takes 6 to 18 months. Jurisdictions such as Estonia and Lithuania historically offer tighter review timelines.

Do I need to be physically present in the licensing country?

In most cases, yes: regulators require the presence of a real office and key personnel (at least a director or MLRO) in the licensing country. Specific requirements are determined by national legislation and the regulator.

What is a fit & proper check and who must pass it?

Fit & proper (assessment of business reputation and professional qualification) is a mandatory procedure for members of the governance bodies of the applicant company. The regulator checks business reputation, education, experience, and absence of convictions for financial and other serious crimes. This procedure applies to all directors, board members, and persons exercising key functions.

What are the AML requirements for obtaining a financial licence in the EU?

All licensed financial institutions in the EU must comply with AMLD5 and AMLD6 requirements. It is necessary to develop and implement an AML/CFT program, appoint a responsible officer (MLRO), establish KYC/KYB procedures and transaction monitoring. COREDO provides services for developing AML documentation and outsourced MLRO services.

Which jurisdiction should I select for obtaining a financial licence in the EU?

The choice depends on several factors: the type of planned services, budget (share capital and service costs), target markets, operational requirements, and timelines. COREDO analyzes these parameters and provides a justified recommendation on jurisdiction selection.

Is it mandatory to register a company in the licensing country?

As a rule, yes. Most EU regulators require the applicant to be a legal entity registered in that jurisdiction. COREDO provides a comprehensive range of services for company registration in all EU member states.

Submit an Application for Consultation

Get a free preliminary consultation on selecting a jurisdiction and type of financial licence in the EU. COREDO specialists will analyze your business model and suggest an optimal solution.