COREDO > Obtaining a Financial Licence in Latvia

Obtaining a Financial Licence in Latvia

Latvia holds a strategic position among the Baltic member states of the European Union and is actively developing as one of the leading fintech hubs in the region. Since joining the EU in 2004 and adopting the euro in 2014, the country has consistently harmonised its financial legislation with European directives and regulations, making it an attractive jurisdiction for obtaining financial licences.

COREDO has been providing a full range of services to support the process of obtaining financial licences in Latvia since 2016, offering clients professional legal support at every stage — from preliminary analysis to obtaining the regulator’s approval.

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Cost of the service
from 50 000 EUR

Regulatory Framework

Latvia’s financial market is regulated by Latvijas Banka (Bank of Latvia), which since 1 January 2023 has combined the functions of the former Financial and Capital Market Commission (FKTK) and the central bank. Latvijas Banka carries out licensing, supervision and regulation of all financial market participants in the country.

The main regulatory acts governing financial licensing requirements in Latvia include the following European directives and regulations:

PSD2 (Directive (EU) 2015/2366) — regulates the activities of payment institutions (PI), establishes capital requirements and licensing procedures for payment service providers. Implemented in Latvia through the Law on Payment Services and Electronic Money (Maksājumu pakalpojumu un elektroniskās naudas likums).
EMD2 (Directive 2009/110/EC) — regulates the activities of electronic money institutions (EMI), defines minimum initial capital requirements and licence issuance conditions. Also implemented through the Law on Payment Services and Electronic Money.
MiFID II (Directive 2014/65/EU) — regulates investment activities, the work of brokers and securities dealers. Implemented in Latvia through the Law on the Financial Instruments Market (Finanšu instrumentu tirgus likums).
CRD IV (Directive 2013/36/EU) and CRR (Regulation (EU) 575/2013) — establish prudential requirements for credit institutions and investment firms, including own funds requirements and bank licensing.

In addition to European legislation, the national Law on the Prevention of Money Laundering, Terrorism Financing and Proliferation Financing (Latvia’s AML/CFT law) plays a significant role, imposing strict requirements on the internal compliance procedures of all licensed institutions.

Types of Financial Licences

Various types of financial licences are issued in Latvia depending on the planned activities. The table below presents a summary of the main categories:

Licence Type	Description	Min. Capital	Approximate Timeframe
EMI (Electronic Money Institution)	Issuance of electronic money and provision of payment services	EUR 350,000 (EMD2, Art. 4)	6–8 months
PI (Payment Institution) — full range	All types of payment services without electronic money issuance	EUR 125,000 (PSD2, Art. 7(c))	3–6 months
PI — money transfers	Money transfer services	EUR 20,000 (PSD2, Art. 7(a))	3–6 months
PI — payment initiation	Payment initiation services	EUR 50,000 (PSD2, Art. 7(b))	3–6 months
Investment firm (without client funds)	Investment and ancillary services	EUR 75,000 (MiFID II)	6–12 months
Investment firm (general)	Full range of investment services	EUR 150,000 (MiFID II)	6–12 months
Investment firm (dealing)	Dealing on own account	EUR 750,000 (MiFID II/CRR)	6–12 months
Credit institution (bank)	Full range of banking services	EUR 5,000,000 (CRD IV, Art. 12)	12+ months
Special credit institution	Limited range of banking operations	EUR 1,000,000	6–12 months

All licences issued in Latvia under European directives (EMI, PI, investment) grant the right to passporting — providing services across all countries of the European Economic Area (EEA) through a notification procedure.

Advantages of the Jurisdiction

Latvia offers a number of significant advantages for companies planning to obtain a financial licence:

Cooperative approach of the regulator.

Latvijas Banka offers free pre-licensing consultations, which can be conducted both in person and remotely. The ability to discuss a project with the regulator at an early stage significantly reduces the risk of refusal.

Competitive licensing timeframes.

Latvijas Banka aims to review licence applications within three months from the date of confirming the completeness of the document package, which is one of the shortest timeframes among EU countries.

Access to central bank infrastructure.

Non-bank payment service providers in Latvia can participate in the Electronic Clearing System (EKS), operated by Latvijas Banka, executing SEPA transfers directly through the central bank’s infrastructure without the intermediation of commercial banks.

Passporting across the EEA.

An EMI, PI or investment licence obtained in Latvia allows the provision of services in all 30 EEA countries through a notification procedure (passporting) in accordance with PSD2 (Art. 28), EMD2 (Art. 3) and MiFID II (Art. 34–35).

Low supervisory fees.

Latvia offers one of the most competitive supervisory fee models in the EU — no more than 0.6% of annual gross income for licensed companies.

Developed fintech ecosystem.

Approximately 130 fintech companies already operate in Latvia, creating a favourable environment for new market participants, including access to talent and well-developed technological infrastructure.

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General Requirements for Obtaining a Licence

Legal entity.

It is necessary to register a company in Latvia — typically in the form of an SIA (sabiedrība ar ierobežotu atbildību — limited liability company). Registration must be completed before submitting the licence application.

Share capital.

The minimum amount depends on the licence type (see table above). The availability of capital must be documented at the application stage.

Management and beneficiaries.

For EMI, at least two board members are required, one of whom must be a Latvian resident with confirmed experience in the financial or regulatory field. All beneficial owners and key persons must have an impeccable business reputation and relevant professional experience. Candidates for positions on the board, supervisory council and other critical roles are subject to prior approval by the regulator.

AML/CFT compliance.

The applicant must develop and submit internal policies and procedures for the prevention of money laundering and terrorist financing, including customer due diligence (CDD) procedures, transaction monitoring, identification of suspicious transactions and internal controls. A designated anti-money laundering reporting officer (MLRO) must be appointed.

Business plan.

A detailed three-year business plan including a description of planned services, financial projections, organisational structure, description of IT systems and risk management procedures.

IT infrastructure.

Information security policies and procedures, business continuity plan, description of the technological solutions used.

Professional liability insurance.

For applicants planning to provide payment initiation or account information services, a professional civil liability policy is required in accordance with Latvijas Banka Regulation No 269.

Cost of COREDO Services

COREDO offers full support for the process of obtaining a financial licence in Latvia. The cost of services depends on the licence type and project complexity:

Service	Cost
Financial licence in Latvia (PI/EMI)	from EUR 50,000 + VAT

The cost includes preparation of the complete document package, development of internal policies and procedures, interaction with the regulator and support until the licence is obtained. The exact cost is determined following an analysis of the specific project and depends on the licence type, business scale and additional requirements.

In addition to COREDO’s service fees, the applicant pays a regulatory fee of EUR 5,000 for document review by Latvijas Banka, as well as bearing the costs of forming the share capital in accordance with the requirements for the chosen licence type.

Payment Terms

Payment for COREDO’s services is made in three stages:

40%

upon signing the contract and commencement of work on the project;

40%

after preparation of the complete document package and submission of the application to Latvijas Banka;

20%

after receiving a positive decision from the regulator on licence issuance.

This payment structure protects the client’s interests and links payments to specific work milestones.

List of Documents

To submit an application for a financial licence in Latvia, the following document package must be prepared:

Incorporation documents of the company (articles of association, resolution on establishment, extract from the Latvian Register of Enterprises).

Confirmation of share capital availability (bank statement, auditor’s report).

Detailed three-year business plan with financial projections and description of planned services.

Description of the company’s organisational structure indicating the functions of employees.

CVs and confirmation of qualifications of board members, supervisory council members and key employees (at least three years of professional experience in the financial sector).

Detailed questionnaires of beneficial owners with information covering the last ten years, confirmation of source of funds.

AML/CFT policies and procedures (customer identification, transaction monitoring, suspicious transaction reporting).

Risk management and internal control policies.

Description of IT infrastructure and information security policy.

Business Continuity Plan.

Professional civil liability policy (for payment initiation and account information services).

Financial statements (for existing companies).

Criminal record certificates for all key persons.

Confirmation of payment of the regulatory fee (EUR 5,000).

Licence Acquisition Procedure

The process of obtaining a financial licence in Latvia consists of several sequential stages:

Preliminary analysis and consultations (2–4 weeks).

COREDO specialists analyse the client’s business model, determine the optimal licence type and create a project roadmap. At this stage, preliminary consultations with Latvijas Banka may be conducted.

01

Legal entity registration and capital formation (2–4 weeks).

Registration of a company in the form of an SIA in Latvia (if the company is not yet registered), opening a bank account and depositing the share capital.

02

Documentation preparation (6–10 weeks).

Development of the business plan, internal AML/CFT policies, risk management procedures, IT infrastructure description and the complete document package for the regulator.

03

Application submission and completeness review (15 business days).

After submission of the application, Latvijas Banka conducts a completeness review of the submitted documents within 15 business days. If necessary, the regulator requests additional materials.

04

Application review by the regulator (up to 3 months).

From the date of confirming the completeness of the document package, Latvijas Banka makes a decision on granting or refusing the licence within three months. The timeframe may be extended if the information provided is insufficient for a decision.

05

The overall duration of the process from the start of preparation to licence issuance is 4 to 8 months, depending on the licence type and the applicant’s readiness.

Our Experts

The process of obtaining a financial licence in Latvia requires a deep understanding of both European and national legislation. The following members of the COREDO team are responsible for this area:

Pavel Kos

Head of Legal. Has been working at COREDO since 2017, heading the legal team since 2020. Specialises in strategic planning of licensing projects, interaction with regulators and management of complex cross-border procedures.

Basang Ungunov

Lawyer. Holds a Master of Laws degree (LLM) in civil law. Has been working at COREDO since 2022, specialising in the preparation of legal documentation, legal analysis and support of licensing procedures.

Frequently Asked Questions

Which regulator issues financial licences in Latvia?

Since 1 January 2023, all functions related to licensing and supervision of the financial market in Latvia have been performed by Latvijas Banka (Bank of Latvia), which combined the functions of the former FKTK and the central bank. Latvijas Banka licenses credit institutions, payment institutions, electronic money institutions and investment firms.

How long does it take to obtain an EMI licence in Latvia?

The full process from the start of preparation to obtaining an EMI licence takes 6 to 8 months. Latvijas Banka conducts a document completeness review within 15 business days, after which a decision is made within three months. The preparatory stage (company registration, capital formation, documentation development) takes 2 to 4 months.

Is it possible to operate in other EU countries with a Latvian licence?

Yes. EMI, PI and investment licences obtained in Latvia allow the provision of services in all 30 countries of the European Economic Area through the passporting procedure. To do this, it is necessary to notify Latvijas Banka, which forwards the information to the regulator of the host country.

What is the minimum capital required for a payment institution licence?

The minimum capital depends on the type of services: EUR 20,000 for money transfer services, EUR 50,000 for payment initiation services and EUR 125,000 for a full range of payment services. For an EMI licence, the minimum capital is EUR 350,000.

Is it mandatory to register a company in Latvia?

Yes, to obtain a financial licence it is necessary to register a legal entity in Latvia — typically in the form of an SIA (limited liability company). Registration must be completed before submitting the licence application to Latvijas Banka.

What requirements are imposed on the management of a licensed company?

For EMI, at least two board members are required, one of whom must be a Latvian resident with professional experience in the financial sector. All board members and beneficial owners must have an impeccable business reputation, no criminal record and confirmed professional experience. Candidates for key positions are subject to approval by Latvijas Banka.

What is the regulatory fee for application review?

The regulatory fee for the review of documents and information submitted for obtaining a payment institution or electronic money institution licence is EUR 5,000. This fee is paid upon official submission of the application to Latvijas Banka.

What annual obligations does a licensed company have?

Licensed companies are required to maintain the established minimum capital, comply with AML/CFT requirements, conduct regular updates of internal policies (at least every 18 months), carry out internal risk assessments (at least every three years), undergo audits and submit reports to Latvijas Banka. Supervisory fees are limited to 0.6% of annual gross income.

Start the Licensing Process with COREDO

Obtaining a financial licence in Latvia is a responsible process that requires thorough preparation and deep knowledge of regulatory requirements. COREDO specialists have been helping clients successfully navigate licensing procedures in European jurisdictions since 2016, providing professional support at every stage.

For an individual consultation and assessment of your project, contact our team.