What Brexit actually changed
Before 2021 a firm authorised in one EEA state could serve customers across the rest of it. That is what passporting meant, and it is why so many fintechs were built on a single authorisation.
It no longer applies between the UK and the EU in either direction. A UK electronic money institution serving customers in Lithuania, Poland or Germany needs an EU-established, EU-authorised entity to do it. An EU institution serving UK customers needs UK permission. Most firms that operate on both sides now hold two authorisations, and the structuring question is which entity does what.
Where are your customers?
EU customers, UK-based business
You need an EU entity
- An EU-established subsidiary, authorised locally
- Lithuania is the usual answer, for good reasons
- Substance requirements: real people, real presence
- Group structure and intra-group agreements matter
UK customers, EU-based business
You need UK permission
- FCA authorisation or registration, depending on activity
- A UK entity in most cases
- Separate AML registration for crypto activity
- The two regimes have diverged and continue to
Which licence
The two are routinely confused, and applying for the wrong one costs months.
Electronic money institution
- Issues e-money: stored value redeemable at par
- Wallets, prepaid cards, stored balances
- Higher initial capital requirement
- May also provide payment services
- Safeguarding obligations over customer funds
Payment institution
- Executes payments without issuing stored value
- Transfers, acquiring, initiation, account information
- Lower capital, scaled to the services provided
- Cannot issue e-money
- Safeguarding still applies to relevant funds
Crypto
Crypto stopped being a regulatory grey area and became a licensing question. In the EU, crypto-asset service providers operate under a single harmonised regime with authorisation obtained in one member state and passportable across the bloc. In the UK, cryptoasset businesses are subject to a separate registration regime aimed principally at money laundering, and the UK's approach has diverged from the EU's rather than tracked it.
The practical consequence for a business operating in both is the same as everywhere else on this page: two regimes, two sets of obligations, and a structuring decision about which entity does what. What is no longer available is operating in neither.
What I handle
- Licensing strategy: which permission you actually need, and in which jurisdiction.
- EMI and payment institution applications to the Bank of Lithuania, including the business plan and governance package.
- AML and KYC frameworks that are specific to the business rather than downloaded, including the policies a regulator will actually read.
- Crypto-asset authorisation and registration across the EU and UK regimes.
- Data protection, which for a financial services business is a licensing matter as much as a compliance one.
- Terms of service, customer agreements and intra-group arrangements for regulated entities.
How a licensing project runs
- 01Weeks 1–2
Decide what you are, in regulatory terms
Most of the value is here. The same product can be an e-money business, a payment business or neither, depending on how the flow of funds is arranged, and that is often still changeable at this stage.
- 02The long part
Build the substance
Governance, key function holders, capital, safeguarding arrangements and an AML framework written for this business. Regulators assess whether the firm exists, not whether the paperwork does.
- 03Months
Apply, and answer
Submission is the beginning of a conversation rather than the end of one. Expect rounds of questions, and expect them to be about the business model rather than the forms.
- 04Afterwards
Operate under the permission
Reporting, ongoing AML obligations, changes in control and material change notifications. A licence is a continuing relationship with a regulator, not a certificate.
What it costs
Licensing work is quoted by stage, with a written estimate before each one begins, because the length of a regulatory process depends heavily on how far the business model has been thought through before it starts. Discrete pieces such as an AML policy framework or a set of customer terms can usually be fixed-fee. Regulator fees and any required audits are disbursements.
Common questions
Why do fintechs license in Lithuania?
Because the Bank of Lithuania has run an accessible and well-understood process for electronic money and payment institutions for over a decade, and because a Lithuanian licence is an EU licence. For a firm that needs to serve EU customers, that combination is difficult to beat within the bloc.
Can my UK firm still serve EU customers after Brexit?
Not on the strength of its UK authorisation. Passporting between the UK and the EU ended, in both directions. Serving EU customers requires an EU-established entity holding an EU authorisation, which is why most firms operating on both sides now hold two.
What is the difference between an EMI and a payment institution licence?
An electronic money institution issues e-money, meaning stored value redeemable at par, which is what sits behind a wallet or a prepaid card. A payment institution executes payments without issuing stored value. The EMI permission carries a higher capital requirement and generally allows payment services too.
How long does an EMI application take?
Realistically several months from a properly prepared submission, and considerably longer where the business model changes during the process. The determining factor is almost always how complete and coherent the application is when it goes in, not the regulator's speed.
Do I need a licence to run a crypto business?
In the EU, crypto-asset service providers require authorisation under the harmonised regime, obtainable in one member state and passportable across the bloc. In the UK a separate registration regime applies, focused principally on money laundering. Which applies to you depends on the activity and on where your customers are, and the two regimes have diverged.
Can you help with the AML framework rather than the whole application?
Yes, and it is a common instruction. An AML and KYC framework that is written for the actual business, rather than adapted from a template, is one of the things most likely to determine whether an application succeeds.
This page states the law of England & Wales and Lithuania as at 18 August 2026. It is general information, not advice on your matter, and reading it does not create a solicitor-client relationship.