Electronic Money Institution License in Cyprus ”EMI” 

Cyprus, strategically nestled at the crossroads of Europe, Africa, and Asia, emerges as a pivotal hub for business and culture in the Eastern Mediterranean. This enchanting island, celebrated as the third largest and most populous in its region, stands as a testament to the blend of geographical beauty and economic vigor. Recognized by the International Monetary Fund (IMF) as possessing an advanced economy, Cyprus is not only a member of the European Union (EU) but also a beacon of regulatory compliance and fiscal attractiveness within the EU framework.

The legal landscape of Cyprus is particularly noteworthy, incorporating the principles of USA Common Law alongside a steadfast commitment to EU and international statutes. This harmonious integration facilitates a robust legal framework, further augmented by the progressive implementation of e-justice systems. Such advancements underscore Cyprus’s dedication to modernizing its judicial processes and enhancing legal accessibility.

At the heart of Cyprus’s economic resilience and innovation lies its highly educated workforce. Boasting a remarkable tertiary education completion rate, the island prides itself on having one of the most skilled labor forces within the EU. This educational achievement translates into a competitive advantage, particularly in the realms of technology, finance, and international business. Furthermore, the linguistic prowess of the Cypriot population, with over 75 percent proficient in English, ensures seamless business communications and positions Cyprus as an attractive destination for international investors and entrepreneurs.

In summary, Cyprus offers a unique blend of strategic geographical positioning, economic prosperity, advanced legal framework, and educational excellence. This potent combination not only enhances its appeal as a prime location for business ventures but also contributes to its vibrant cultural mosaic. Whether for investment opportunities, legal compliance, or access to a skilled, English-speaking workforce, Cyprus stands ready to welcome the world with open arms, making it a jewel in the Mediterranean’s crown.

Cyprus shines as a premier destination for Electronic Money Institutions (EMIs), thanks to its robust service-based economy and strategic position. With over 700 accounting firms, including the Big 4, and a plethora of legal expertise with 2,700 licensed lawyers and 160 law firms, the foundation for financial services is exceptionally strong. The nation boasts a significant global maritime presence, with its shipping registry ranking 11th worldwide and third in the EU, underscored by a leading third-party ship-management center.

The commitment of Cyprus to technological advancement is evident in its rapid development of a cutting-edge telecommunications network, inclusive of 5G, and significant investments in digital transformation across both public and private sectors. This is complemented by a concerted effort towards enhancing cybersecurity and a visionary 2035 action plan focusing on a greener economy, educational excellence, and digitalization among other strategic goals.

Economically resilient, Cyprus has navigated the Covid-19 pandemic with a relatively mild recession, forecasting promising GDP growth rates for the immediate future. The country offers a compelling mix of high living standards, low crime rates, a warm climate, regional political stability, and a congenial business environment, making it an attractive hub for EMIs and other businesses.

Key benefits for EMIs in Cyprus include:

  • Operation across all EU jurisdictions with a single license, thanks to the passporting system.
  • The ability to offer SEPA payment services when licensed by the Central Bank of Cyprus.
  • An advantageous location for servicing international customers at the crossroads of three continents.
  • A business-friendly climate characterized by low taxes, a skilled workforce, and low operational costs.
  • Unfettered access to the EU’s single market, enhancing the movement of goods, services, and capital.
  • A rich talent pool in finance, technology, and marketing due to the country’s high educational standards and development.

Cyprus presents a compelling proposition for EMIs looking to leverage the EU market, offering a strategic location, favorable business conditions, and a gateway to extensive maritime, technological, and financial opportunities.

An Electronic Money Institution (EMI) plays a pivotal role in the modern financial ecosystem, facilitating the issuance and management of electronic money (e-money). EMIs empower individuals and businesses with innovative payment solutions such as prepaid cards, electronic wallets, and other digital forms of money. These entities are legally authorized to disburse e-money, essentially representing a digital claim against the issuer that arises when funds are exchanged for making payment transactions.

At the core of e-money is the concept of electronically storing monetary value, including through magnetic means, which is initiated upon the receipt of funds. This digital currency mirrors the functionality of cash within an electronic payment system, with its value backed by traditional fiat currency stored within bank databases.

The operations of EMIs encompass a broad range of activities aimed at circulating electronic money within the financial system. These include:

  • Maintaining electronic devices or systems where monetary value can be stored for the purpose of issuing e-money.
  • Establishing instruments for the efficient distribution of e-money to facilitate its circulation.
  • Engaging in the direct distribution of electronic money against monetary value.
  • Introducing e-money into the market for use in electronic transactions.
  • Selling or reselling e-money products to enhance accessibility and usage.
  • Investing in existing e-money products held by consumers to support the e-money ecosystem.
  • Distributing e-money to holders or those perceived to hold it, except when functioning as payers in transactions.
  • Facilitating redemption processes for e-money holders seeking to convert their digital currency back into fiat currency, either directly or through authorized representatives.

EMIs thus serve as crucial intermediaries, enabling seamless, secure, and efficient digital transactions across the global financial landscape. Their role in advancing the digitalization of money contributes significantly to the broader adoption of cashless payment methods, marking a significant shift towards a more digitally inclusive economy.

Cyprus issues electronic money through the following institutions:

An Electronic Money Institution (EMI) license is a crucial regulatory authorization that enables entities to issue and manage electronic money (e-money). This license is essential for companies seeking to engage in activities such as depositing funds into forex accounts, topping up electronic wallets, purchasing virtual currency, and facilitating payments. With an EMI license, organizations are empowered to issue digital currency to both individuals and legal entities, marking a significant milestone in the digital financial landscape.

The absence of an EMI license would render the creation of virtual currency wallets, third-party payment services, and other virtual currency-utilizing resources unfeasible. This distinction sets EMIs apart from Payment Institutions (PIs), which, although integral to the financial ecosystem, do not have the authority to issue e-money. This fundamental difference underscores the unique business models and regulatory frameworks applicable to EMIs and PIs.

As of 2023, several jurisdictions are equipped to grant EMI licenses, reflecting a global recognition of the need for regulated electronic money services. Governments worldwide have instituted laws and regulations designed to shield consumers from the inherent risks associated with financial services, necessitating that companies meet stringent standards to operate within these regulatory environments.

The responsibility of issuing EMI licenses falls to various regulatory bodies across jurisdictions, demanding that businesses undertake comprehensive research and comply with the specific requirements of their chosen jurisdiction before application. An EMI license not only permits the issuance of electronic money but also allows companies to provide licensed Payment Institution services, showcasing the versatility and broad scope of this authorization.

Electronic money, as defined in the context of an EMI license, is the digital counterpart to cash, stored on electronic devices or remote servers but excluding prepaid goods and services within a limited network. In Cyprus, for instance, companies must be incorporated locally and offer e-money and/or payment services within the country to qualify for an EMI license.

In Cyprus, the issuance of electronic money is facilitated by various institutions including financial institutions, licensed banks from other member states, financial cooperatives, institutions providing postal payment services, the European Central Bank and national central banks (when not acting as monetary authorities), and public authorities at different governmental levels.

The significance of EMIs in the financial sector is highlighted by the rapid growth in the volume of e-money, with nearly 13 billion EUR reported by EMIs in the euro area by the end of 2018, a fourfold increase since the beginning of 2011. This exponential growth underscores the pivotal role of EMIs in fostering a secure, efficient, and innovative digital financial ecosystem.


In the Republic of Cyprus, the regulatory framework governing the issuance and management of electronic money (e-money) is defined by the Electronic Money Laws of 2012 and 2018. These laws incorporate key EU directives into Cypriot national legislation, setting the stage for a regulated e-money market within the country. Specifically, they bring into effect Directive 2009/110/EC, aimed at ensuring that electronic money institutions operate under prudent business practices and supervisory standards, and the Second Payment Services Directive (PSD2) of 2015, which focuses on enhancing payment services across the EU.

For businesses aiming to provide e-money services in Cyprus, obtaining authorization from the Central Bank of Cyprus (CBC) or from any European Union member state is mandatory. This authorization is predicated on the institution’s compliance with the right to establish and the free provision of services as outlined in the Law. Key to this compliance is the requirement for these institutions to be legal entities registered in Cyprus, with their headquarters and registered office within the Republic, and engaging in e-money and/or payment services at least in part.

The process for seeking authorization as an e-money institution is detailed in the Provision and Use of Payment Services and Access to Payment Systems Laws of 2018 to 2023. Applicants are required to submit a comprehensive application to the CBC, inclusive of all relevant information as specified in subsections (3) to (8) of the law. This includes a mandatory application fee, evidence of which must be included with the submission.

Furthermore, in line with section 4A of the Law, these requirements apply proportionately to all electronic money institutions, ensuring a level playing field. The European Banking Authority’s guidelines (EBA/GL/2017/09), fully adopted by the CBC, further delineate the specifics of what information must be disclosed during the application process. This meticulous regulatory framework underscores Cyprus’s commitment to maintaining a secure, transparent, and efficient e-money sector, fostering trust and stability within the financial services industry.


Under the European Union Directive 2009/110/EC, commonly referred to as the “Electronic Money Directive,” a comprehensive legal framework has been established to govern the issuance and operation of electronic money (e-money) within the EU. This directive is instrumental in safeguarding consumers utilizing e-money products and services, ensuring equitable treatment and competition among all e-money issuers.

Electronic Money Institutions (EMIs) are mandated to adhere to several critical requirements as stipulated by the Directive, designed to ensure their operational integrity, financial stability, and the security of consumer interests. These requirements include:

  • Capital Adequacy: EMIs are obligated to maintain a minimum capital threshold to guarantee their financial stability. For EMIs based in Cyprus, the capital requirement is set at €350,000, providing a financial buffer that supports the institution’s resilience.
  • Licensing and Compliance: To legally operate, EMIs must secure a license from the regulatory authority in their home country. This process involves demonstrating compliance with the Directive’s stipulations as well as local laws and regulations, ensuring that the institution is fit to offer e-money services.
  • Consumer Protection: The Directive emphasizes the importance of transparent communication with consumers. EMIs are required to provide clear, comprehensible information regarding the e-money products and services they offer, facilitating informed decision-making by consumers.
  • Data Security: Protecting customer data and transactions is paramount. EMIs must implement robust security measures to safeguard sensitive information, ensuring the confidentiality and integrity of consumer data.
  • Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF): EMIs are tasked with adhering to stringent AML and CTF regulations. These measures are crucial in preventing the misuse of e-money services for illicit activities, including money laundering and terrorism financing.

The Electronic Money Directive ensures that e-money services across the EU are regulated under a unified legal framework, regardless of the issuer’s home country. This approach not only protects consumers by enforcing standards for safety and transparency but also promotes fair competition among e-money issuers, contributing to a stable and trustworthy digital finance environment within the European Union.

PSD2 – EU Legislation for Electronic Money Institutions, Payment Institutions and Payment Service Providers

The “Payment Services Directive 2” (PSD2), officially known as EU Directive 2015/2366, marks a transformative step in the regulation of payment services within the European Union. By introducing new rules, PSD2 aims to foster a more competitive environment among payment service providers while significantly enhancing consumer protection. This directive is pivotal in shaping the future of financial transactions, making them safer, more accessible, and more innovative.

Key provisions of PSD2 include:

  • Strong Customer Authentication (SCA): To combat fraud in online payments, PSD2 mandates the implementation of SCA. This requirement ensures that electronic payments are performed with multi-factor authentication, offering a higher level of security and reducing the risk of unauthorized transactions.
  • Open Banking and Third-Party Providers (TPPs): PSD2 paves the way for open banking by allowing TPPs to access customers’ account information, with their explicit consent. This access enables the development of new and innovative financial services, such as financial management tools or streamlined payment methods, enhancing the overall user experience.
  • Limitation on Card Interchange Fees: The directive places a cap on card interchange fees, particularly for cross-border payments, aiming to lower the costs associated with these transactions. This move is expected to benefit consumers through reduced payment processing fees and encourage more cross-border trade within the EU.
  • Enhanced Consumer Rights: PSD2 places a strong emphasis on consumer rights, requiring payment service providers to thoroughly inform users about their rights and obligations. This transparency is crucial in empowering consumers, ensuring they are well-informed about the services they use.
  • Security Measures: Under PSD2, payment service providers are required to adopt robust security measures to safeguard customer data and transactions. This includes the use of secure communication channels and encryption, enhancing the integrity and confidentiality of financial data.

By establishing these provisions, PSD2 seeks to create a more equitable, competitive, and secure payment services landscape across the EU. The directive has far-reaching implications for the industry, applying to all entities providing payment services within the EU. It not only promotes innovation and competition but also places a strong emphasis on consumer protection, heralding a new era in the digital payment services sector.


Applying for an Electronic Money Institution (EMI) license in Cyprus involves a meticulous and comprehensive process, designed to ensure that applicants meet the high standards required for operating within the electronic payments sector. This process, overseen by the Central Bank of Cyprus, is structured to foster a secure, reliable, and efficient financial ecosystem. Here’s a breakdown of the essential steps involved:

  1. Preparation and Documentation: The initial phase requires applicants to compile a thorough package of documentation, which includes a detailed business plan, financial forecasts, and due diligence reports. This foundational step is critical, as it lays out the operational, financial, and compliance frameworks of the aspiring EMI.
  2. Application Submission: Once the preparatory work is complete, the comprehensive application, along with all requisite supporting documents, is submitted to the Central Bank of Cyprus. This body holds the authority to supervise and regulate EMIs within the jurisdiction, ensuring adherence to the highest standards of financial conduct and consumer protection.
  3. Review Process: Following submission, the Central Bank of Cyprus undertakes a rigorous review of the application and accompanying documentation. This evaluation is aimed at verifying the applicant’s compliance with eligibility criteria and regulatory mandates specific to EMI operations. The review duration can extend over several months, reflecting the thoroughness of the assessment.
  4. On-site Inspection: For applications that successfully pass the review stage, the Central Bank of Cyprus conducts an on-site inspection of the applicant’s facilities. This step is crucial for validating the operational readiness of the company, including the adequacy of its systems, controls, and infrastructural capabilities to function as an EMI.
  5. License Issuance: Upon satisfactory completion of the on-site inspection and confirmation of regulatory compliance, the Central Bank of Cyprus issues the EMI license. This formal authorization marks the culmination of the application process, enabling the institution to commence its electronic money services in Cyprus.

The journey to obtaining an EMI license in Cyprus is intricate and demands a significant investment of time, resources, and regulatory insight. Prospective EMIs must navigate this process with a deep understanding of the electronic payments landscape and a steadfast commitment to compliance and operational excellence.


Securing an Electronic Money Institution (EMI) license in Cyprus necessitates a comprehensive submission of documents to demonstrate the applicant’s operational readiness, financial stability, and adherence to regulatory standards. Here’s an overview of the essential documentation required:

  1. Operating Program: This should outline the operational framework for issuing electronic money and detail the types of payment services to be offered, ensuring a clear understanding of the institution’s operational model.
  2. Business Plan with Forecast Budget: A three-year forecast budget included in the business plan is critical for showcasing the applicant’s financial planning and operational sustainability.
  3. Initial Capital Evidence: Applicants must prove possession of at least EUR 350,000 in initial capital, underlining the financial robustness required for authorization.
  4. User Funds Protection Measures: A detailed description of how the institution plans to safeguard users’ funds, highlighting the security and trustworthiness of the EMI.
  5. Governance and Internal Controls: Comprehensive information on governance structures, internal controls, and administrative, risk management, and accounting procedures is essential to demonstrate sound and prudent management.
  6. AML and Funds Transfer Information Controls: An explanation of internal controls to comply with anti-money laundering (AML) regulations and information on payer requirements, ensuring the institution’s commitment to legal and regulatory compliance.
  7. Operational and Distribution Plans: Details on participation in payment systems, outsourcing plans, and the use of agents or branches for distribution or redemption of electronic money, outlining the operational scope and distribution strategy.
  8. Ownership and Control: Information on the identity of direct or indirect controllers, shareholding structures, and the suitability of these individuals to ensure proper management and oversight.
  9. Management and Directors: The identities and qualifications of directors and key management personnel, along with evidence of their good repute and experience in e-money and payment services, are crucial for demonstrating leadership competence.
  10. Statutory Auditor: The appointment of a statutory auditor ensures ongoing compliance with financial and regulatory standards.
  11. Legal and Incorporation Documents: A description of the legal status, articles of incorporation, and the headquarters address establishes the legal foundation and operational base of the institution.
  12. Contract Drafts: Drafts of contracts between the EMI and its users, plus framework contracts, set out the terms of service and user agreements.
  13. Security and Data Protection Measures: Documentation on the monitoring, handling, and restriction of sensitive payment data, alongside a detailed security policy, underscores the institution’s commitment to data security and customer protection.

This exhaustive documentation requirement underpins the rigorous process for EMI license application in Cyprus, ensuring that only institutions capable of upholding the highest standards of financial service, operational integrity, and customer protection are granted authorization to operate.


Upon the submission of an Electronic Money Institution (EMI) license application in Cyprus, the Central Bank of Cyprus (CBC) initiates a thorough review process. This crucial phase may involve the CBC requesting additional information or clarifications to ensure a comprehensive evaluation of the application’s adherence to regulatory standards. Applicants are typically given a specific timeframe to respond to these inquiries, emphasizing the importance of preparedness and responsiveness in this process.

Under the prevailing regulatory framework, the CBC is obligated to deliver its response to the application within three months from the date of a complete application submission. It’s important to note that this three-month period commences only once the application is deemed complete, including the satisfactory resolution of any follow-up queries by the CBC. Consequently, the timeline for obtaining a conditional license can span between six to nine months, contingent upon the swift and satisfactory provision of additional information requested by the CBC and the approval concerning the ultimate beneficial owner.

Securing an EMI license is a pivotal step that can significantly impact the success of your business venture. Given the complexity and rigor of the application process, it is advisable to engage professional legal support. Our team at Regulated United Europe specializes in assisting businesses with the incorporation and EMI license application process in Cyprus. Leveraging our expertise in legal, business development, and financial accounting services, we aim to make the journey toward starting an EMI business in Cyprus as efficient, seamless, and transparent as possible.

Embarking on this path with the support of experienced professionals not only facilitates a smoother application process but also sets the foundation for enduring business success. We invite you to contact us for a personalized consultation on obtaining your EMI license, marking the first step towards realizing your business aspirations in the vibrant financial landscape of Cyprus.


Navigating the process of obtaining an Electronic Money Institution (EMI) license in Cyprus presents a unique opportunity for businesses aiming to leverage the strategic geographic location and favorable economic climate of this Mediterranean island. Here are some frequently asked questions to demystify the application process and highlight Cyprus’s potential as a financial hub.

What makes Cyprus an economic standout?

Cyprus, positioned at the confluence of Europe, Africa, and Asia, is the Eastern Mediterranean’s third-largest and most populous island. As a member of the European Union (EU), it boasts a developed economy as classified by the International Monetary Fund (IMF), with a regulatory and tax environment that is conducive to business. The country’s commitment to e-Justice and compliance with EU and international laws, combined with a highly educated workforce proficient in English, further enhances its appeal as a business destination.

Why opt for an EMI establishment in Cyprus?

Cyprus offers several advantages for EMI operations, including:

  • The ability to operate across all EU jurisdictions with a single license, thanks to passporting.
  • Eligibility to offer SEPA payment services upon licensing by the Cyprus Central Bank.
  • A strategic location that serves as a gateway to three continents.
  • A conducive business environment characterized by low taxes, a highly skilled workforce, and a high level of development.
  • Access to the single market and the freedom to move goods, services, and capital across continents, courtesy of EU membership.
  • Attractive low operating costs for businesses aiming to optimize overhead.

What defines an EMI?

EMIs provide a platform for individuals and businesses to access electronic money through means such as prepaid cards and electronic wallets. These institutions issue e-money against received funds, creating a monetary claim on the issuer. This digital currency, backed by fiat currency and stored on bank computers, facilitates electronic transactions akin to cash.

What operations can an EMI undertake?

EMIs are involved in various activities, including:

  • Issuing and circulating electronic money through electronic devices.
  • Distributing e-money against monetary value.
  • Selling or reselling e-money products to facilitate digital transactions.

Which entities issue e-money in Cyprus?

E-money in Cyprus can be issued by a range of institutions, including financial institutions, licensed banks from other member states, financial cooperatives, and certain authorized public authorities, all under the watchful eye of relevant legislation.

Who regulates EMIs in Cyprus?

The Central Bank of Cyprus (CBC) is the primary authority responsible for authorizing and regulating EMIs in the Republic, ensuring compliance with the law and safeguarding the interests of both the institutions and their clients.

What are the prerequisites for EMI applicants?

Applicants must demonstrate financial stability with a minimum capital of €350,000, secure a license from their home country’s regulatory authority, and comply with consumer protection, data security, and anti-money laundering regulations.

Can you explain the PSD2 directive?

PSD2, or EU Directive 2015/2366, introduces new regulations for payment services within the EU, aimed at enhancing consumer protection and fostering competition among payment service providers by ensuring a level playing field.

What’s the initial step in applying for an EMI license?

The application process starts with gathering necessary documentation, including business plans, financial projections, and due diligence reports, to demonstrate the applicant’s preparedness and compliance with regulatory standards.

How much initial capital is required for license application?

Applicants must have a minimum of EUR 350,000 in capital to apply for an EMI license.

Is a detailed risk assessment necessary?

Yes, the security policy of the applying institution should encompass a detailed risk assessment of its IT systems to ensure robust data protection and operational integrity.

What is the expected timeframe for license issuance?

After submitting the application, the CBC’s review process, including any requests for additional information, typically takes between six to nine months, culminating in the issuance of a conditional license pending final approval.

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