EMI licence in Cyprus: requirements, cost and timeline

Who the regulator is

The competent authority that authorises and supervises Electronic Money Institutions in Cyprus is the Central Bank of Cyprus (CBC), under the Electronic Money Laws of 2012 to 2018 (base Law 81(I)/2012, as amended), which transpose the EU's Second Electronic Money Directive, EMD2 (Directive 2009/110/EC). The payment-service side of an EMI's activity is governed by the Cyprus transposition of PSD2 (Directive (EU) 2015/2366). This is not a CySEC licence: CySEC regulates Cyprus investment firms and, under MiCA, crypto-asset service providers. Getting the authority wrong is the most common and most costly mistake at the outset.

What an EMI may do

Electronic money is electronically stored monetary value, representing a claim on the issuer, issued on receipt of funds to make payment transactions and accepted by persons other than the issuer. A licensed EMI may issue, distribute and redeem e-money (prepaid cards, digital wallets, virtual IBANs), provide the full range of PSD2 payment services, grant limited credit ancillary to payment services (never funded from the e-money float), and offer closely related operational services. An EMI is not a bank: it cannot take deposits or lend from safeguarded funds. It differs from a payment institution, which is also CBC-authorised under PSD2 but cannot issue e-money and needs only €20,000 to €125,000 of capital, and from a crypto-asset service provider, which is a CySEC/MiCA regime entirely.

Capital and own funds

The initial capital is €350,000, fully paid up at the time of authorisation, and the institution's own funds may never fall below that figure. On an ongoing basis own funds must be at least the higher of €350,000 or 2% of the average outstanding electronic money (Method D). Where the EMI also provides payment services not linked to e-money issuance, additional own funds are calculated under PSD2 Method A, B or C, and the CBC may adjust the requirement by up to 20% either way.

Safeguarding client funds

Funds received in exchange for e-money must be safeguarded immediately on receipt. The EMI either segregates them in a separate account at a credit institution or invests them in secure, liquid, low-risk assets, ring-fenced from the EMI's own funds and from its creditors, including on insolvency; or it covers the obligation with an insurance policy or comparable guarantee from an authorised insurer or credit institution. Safeguarding is tested closely at application and monitored through reporting and inspection thereafter.

Governance, substance and fit-and-proper

At least two persons must effectively direct the business (the "four-eyes" principle), with key function holders for compliance, risk and AML on the ground. The CBC expects mind and management genuinely in Cyprus — real premises and local substance, not a brass plate. All directors, managers and qualifying shareholders (holders of control) must satisfy the CBC's fit-and-proper, good-repute and suitability assessment, with source-of-funds and source-of-wealth evidence for significant shareholders.

The two-stage CBC process from 3 August 2026

Since 3 August 2026 the CBC runs a two-stage licensing process. In the pre-application exploratory stage, the applicant submits a prescribed form on business model, ownership and ultimate beneficial owners with a €5,000 non-refundable fee; the CBC gives a preliminary view within 30 working days, or 50 working days where an enhanced due diligence report is required. The formal application then follows through the CBC e-platform with the full dossier and a €10,000 fee (raised from the former €5,000). The CBC must decide within three months of a duly completed application, but questions and clarifications mean a realistic end-to-end timeline of 9 to 12 months, and it is prudent to budget up to 18. The dossier covers the programme of operations, a three-year business plan, governance and internal control, risk and AML/CFT policies, IT and operational-resilience arrangements, safeguarding, fit-and-proper documentation and evidence of the €350,000 capital.

Passporting across the EU/EEA

A single Cyprus authorisation passports across the EU and EEA, both as freedom to provide services cross-border and as freedom of establishment through branches or agents. Passporting is by notification to the CBC, which informs the host regulator; the process typically takes one to three months.

Ongoing AML/CFT and supervision

EMIs are obliged entities under the Prevention and Suppression of Money Laundering Laws (base Law 188(I)/2007, as amended), supervised for AML by the CBC, with suspicious transactions reported to the Cyprus FIU, MOKAS. Ongoing duties include customer due diligence and enhanced due diligence, transaction monitoring, sanctions screening, record-keeping for at least five years, strong customer authentication under PSD2, periodic regulatory returns, an annual independent audit, and notifying the CBC of material changes to the business, governance or shareholding.