Latvia EMI, PI & Specialised Banking License 2026 — Latvijas Banka Authorization Guide

Latvia — The Overlooked Baltic Fintech Jurisdiction

Latvia is the Baltic fintech jurisdiction that most founders overlook — and that is precisely why it offers strategic value in 2026. While Lithuania processes more EMI applications and has a larger fintech ecosystem, Latvia offers the same EU passporting, the same capital requirements, and the same PSD2/EMD2 framework under a single regulator: Latvijas Banka, the Bank of Latvia, which absorbed the former Financial and Capital Market Commission (FKTK) functions on 1 January 2023. The consolidation of financial supervision under a single authority has made Latvia's regulatory environment more coherent and predictable.

Latvia operates a three-month statutory review clock. English is accepted for the substantive application file (some statutory forms remain in Latvian). Capital is €350,000 for a full EMI and €20,000–€125,000 for a PI. The real-world timeline runs from 5–8 months (PI) to 7–10 months (EMI). Latvia's corporate income tax operates on an Estonian-inspired model — 0% on undistributed profits, 20% applied only on profit distribution — creating a genuine tax deferral advantage for reinvestment-focused fintechs. A Latvian EMI or PI provides full EU passporting across 30 EEA member states and positions the operator in the Baltic corridor bridging Scandinavia, the Baltics, Poland, and the wider EU.

Latvia in 2026 — Licensing Activity and Pipeline

The data from Latvijas Banka confirms Latvia's accelerating position as a serious EU fintech licensing hub. In 2025, Latvijas Banka issued 8 licences to fintech companies. As of May 2026, 7 further licences have already been issued in 2026 — across payment institutions, electronic money institutions, and crypto-asset service providers. Currently, 15 companies are in the active licensing stage and 29 companies are in the pre-licensing consultation stage simultaneously — over 44 live projects in the Latvijas Banka pipeline as of mid-2026.

International interest is broad and growing. Companies from Poland, Spain, Germany, Turkey, Canada, and the United Kingdom — among others — have sought licences for payment, EMI, and crypto-asset service provision in Latvia.

This pipeline activity signals that Latvia is no longer the overlooked Baltic alternative — it is an increasingly credible primary destination for EU payment and crypto licensing in its own right.

Why Latvia for Payment Businesses

Latvijas Banka — The Single Supervisor

Since 1 January 2023, Latvijas Banka (the Bank of Latvia) became the single supervisor for credit institutions, payment institutions, electronic money institutions, and investment firms in Latvia — absorbing all functions previously held by the FKTK (Financial and Capital Market Commission).

This consolidation is a material improvement: one regulator, one point of contact, and consistent supervisory standards across all financial services entities. Operators choosing Latvia for both an EMI/PI and an investment firm license (CMS equivalent or investment advisory) deal with a single regulatory body for both.

Latvia vs Lithuania — Which Baltic EMI?

This is the most common question from operators considering Baltic EU EMI jurisdictions:

Latvia's New Specialised Credit Institution License (January 2026) — The €1M Banking License

The most significant development in Latvian financial licensing since the FKTK merger: amendments to Latvia's Credit Institutions Law entered into force on 6 January 2026, introducing an entirely new category of financial market participant — the Specialised Credit Institution.

This is not an EMI or PI variant. It is a banking license with materially reduced capital — the first new banking license category introduced in Latvia in decades. For founders researching the new Latvia banking license 2026, the Latvia specialised credit institution is effectively a Latvia neobank license 2026: a €1 million capital requirement that unlocks deposit-taking, lending, and crypto services under Latvijas Banka supervision.

What the Specialised Credit Institution Can Do

A specialised credit institution operates with the capabilities of a traditional bank at a fraction of the capital threshold:

• •Accept deposits from the public (the defining banking activity — not available to EMIs or PIs)
• •Issue loans and credit
• •Provide the full range of payment services
• •Offer leasing and investment services
• •Provide crypto-asset services (CASP activities)
• •Operate across the entire European Union via passporting

Capital and Requirements

Who This Is For

The specialised credit institution licence is designed for operators who need banking status but cannot justify the €5M capital of a traditional bank:

• •Neobanks targeting EU retail or business customers with deposit products
• •Fintech groups that have outgrown EMI/PI constraints and need lending and deposit-taking capability
• •Payment institutions looking to add deposit-taking to an existing PI framework
• •VASP operators seeking a combined banking + crypto service structure under a single Latvian licence

At least 3–4 market participants had already entered consultations with Latvijas Banka on the specialised credit institution licence within the first weeks of the law entering into force (January 2026). The framework was modelled on Lithuania's specialised bank licence, which has produced successful neobank authorisations including Revolut's Lithuanian banking licence.

Application Readiness

Applications for specialised credit institution status are submitted to Latvijas Banka. The supervisory framework — risk management, governance, capital adequacy, liquidity requirements — applies proportionately relative to the institution's scale and risk profile, but is based on banking supervisory standards, not EMI standards. Applicants should expect a more intensive review process than an EMI application.

Zitadelle AG advises fintech groups, neobanks, and scaling payment operators on specialised credit institution strategy and application preparation in Latvia.

Latvia MiCA CASP License — Lowest EU Application Fee

Latvia is an active CASP authorization jurisdiction under MiCA from early 2025. Latvijas Banka issued Latvia's first two MiCA licences in late 2025, with multiple additional applications in progress as of mid-2026.

Why Latvia for MiCA CASP: The most accessible EU CASP entry point by application cost — the MiCA examination fee in Latvia is €2,500, the lowest examination fee in the entire European Union. The annual supervision fee is 0.6% of gross revenue with a floor of €3,000.

MiCA CASP capital tiers in Latvia:

• •Class 1 (advisory, portfolio management): €50,000
• •Class 2 (exchange, custody): €125,000–€150,000
• •Class 3 (operating a trading platform): €150,000

Pre-licensing consultations are available for CASP applicants — Latvijas Banka allows document submission in English during the consultation stage and provides qualitative assessment of business model and governance readiness before formal submission. Approximately 100 free pre-licensing consultations are offered annually.

Once authorized, Latvian CASP licensees passport their services across all 30 EEA countries under MiCA's passporting mechanism. For crypto-fintech operators combining a payment/EMI function with CASP services — a Latvian EMI or PI plus MiCA CASP authorization under the same Latvijas Banka single supervisor provides the most integrated regulatory structure available in the Baltic region.

Full MiCA CASP Guide →

Key Requirements

• •Corporate structure — Latvian SIA (private limited company) with registered office and genuine operational presence in Latvia.
• •Management — minimum 2 board members with relevant financial services experience. Latvijas Banka conducts fit-and-proper assessment. Clean records required for all management and significant shareholders.
• •Capital — EMI: €350,000 paid up in a Latvian credit institution. PI: €20,000–€125,000. Capital buffer may be required above the minimum based on business plan.
• •Safeguarding — client e-money must be safeguarded in segregated accounts at an authorized credit institution or covered by insurance/guarantee.
• •AML/CFT — full AML programme: MLRO, risk-based CDD, transaction monitoring, and STR filing with the Latvian FIU.
• •Business plan — 3-year projections, services description, technology infrastructure, and target markets.
• •Office and substance — real Latvian office required. Management presence in Latvia. Latvijas Banka expects genuine operations, not a letter-box entity.

Latvia's Tax Advantage

Latvia operates a deferred CIT model:

• •0% corporate income tax on retained (undistributed) profits
• •20% CIT on distributed profits (dividends)

For fintech operators that reinvest operating profits into growth — product development, team expansion, technology infrastructure — the Latvian model provides a genuine deferral advantage. Tax is only triggered when profits are distributed to shareholders. This model is similar to Estonia's well-known 0%/20% CIT system and makes Latvia attractive for capital-efficient growth-stage fintechs that prioritize reinvestment.

Cost Breakdown

How Zitadelle AG Assists

• Initial regulatory scoping — determining whether a Latvian EMI or PI is the right authorization, and benchmarking against Lithuania
• Latvian SIA incorporation and operational substance setup
• Full Latvijas Banka application preparation — business plan, financial projections, compliance and AML/CFT programmes
• Management suitability — preparing board members and key function holders for fit-and-proper assessment
• Safeguarding and capital structuring with a Latvian credit institution
• EU passporting notifications across the 30 EEA states
• Tax structuring advice around the 0%/20% deferred CIT model
• Post-authorization compliance support and ongoing regulatory obligations

Zitadelle AG assists Baltic and CEE-facing fintechs, e-wallet operators, and PSPs with Latvian EMI and PI authorization — from initial scoping and SIA incorporation through the full Latvijas Banka application and EU passporting. Contact Zitadelle AG for a confidential initial consultation on your Latvia EMI or PI License.