Bulgaria is rapidly emerging as one of the most attractive European destinations for fintech innovators. Thanks to streamlined legislation and robust digital infrastructure, the country offers an efficient environment for launching an Electronic Money Institution (EMI). If your company is looking to issue e-money or provide payment services across the EU, understanding Bulgaria’s EMI licensing process is essential. In this guide, Belcheva & Karadjova Law Firm covers every step: regulations, procedures, fees, and practical tips related to EMI License.
What is an EMI License and Why Bulgaria?
An Electronic Money Institution (EMI) is a licensed financial entity authorized to issue electronic money and process payments. EMIs play a critical role in Europe’s digital economy, providing innovative payment services for businesses and consumers. Bulgaria’s appeal lies in its EU harmonization, affordable setup, skilled tech workforce, and strong banking ecosystem. With EMI License by the Bulgarian National Bank (BNB), companies unlock access to the entire European Economic Area.
Bulgarian EMI Regulations: Legal Framework Overview
EMI license requirements and supervision in Bulgaria are set by two key documents:
- Law on Payment Services and Payment Systems
The law regulates licensing, management, capital, operations, and consumer protection. - BNB Ordinances
- Ordinance No 16: Outlines step-by-step application requirements and procedures, operational obligations, and corporate governance rules.
- Ordinance No 40: Governs calculation of annual supervisory fees for EMIs, ensuring fee transparency and fairness through a weighted methodology.
Compliance with these legal norms is mandatory for all applicants and EMI License holders.
Step-by-Step Guide: The EMI Licensing Process
1. Company Formation
Register a Bulgarian legal entity, preferably as a Joint Stock Company (AD) or Limited Liability Company (OOD/EOOD), with a clear ownership structure.
2. Ownership and Capital Verification
Disclose all ultimate beneficial owners; deposit the required minimum capital of BGN 700,000 (~EUR 357,000). Capital must be fully paid and sourced transparently.
3. Management & Personnel
Appoint directors and senior managers with relevant financial qualifications and experience. Clean legal records and professional reputations are required.
4. Operational & IT Readiness
Develop and document your business plan, IT systems for payments, risk management, and AML/KYC policies. Physical office presence in Bulgaria is mandatory.
5. Documentation Checklist
Prepare:
- Company statutes and founding documents
- Ownership and capital certificate
- Management CVs and declarations
- Business plan and forecasts
- AML/KYC policy manual
- Technical infrastructure description
6. Application Submission
Submit your application to BNB in Bulgarian, including all supporting documents and proof of application fee payment (approx. BGN 10,000).
7. BNB Review & Clarifications
BNB reviews the package, may request corrections or schedule management interviews. Respond promptly and transparently.
8. License Issuance and Ongoing Compliance
BNB issues the EMI license within three months of a complete submission. Maintain ongoing compliance with capital, reporting, and governance requirements to keep your license active.
BNB Annual Supervisory Fee Calculation Explained
Every EMI pays an annual supervisory fee based on actual costs incurred by BNB. Ordinance No 40 divides the pool into fixed (10%) and variable (90%) parts:
Fixed Fee:
10% of the total category fee is divided equally among all EMIs.
Variable Fee:
90% distributed based on three weighted factors:
- Licensed services performed (50%)
- Total assets at year-end (45%)
- Number of representatives/agents (5%)
Sample Calculation:
If BNB’s total category cost is BGN 1,000,000 and 10 EMIs are supervised:
- Fixed: BGN 100,000 ÷ 10 = BGN 10,000 per EMI License
- Variable: Depends on your market share, activities, assets, and representatives—calculated from audited annual reports.
BNB informs each EMI of their due fee each year, payable within 14 days of notification.
Timeline & Practical Considerations
- Timeframe: Approval typically requires 3-6 months after a complete application.
- Common Pitfalls: Incomplete paperwork, insufficient capital proof, or weak AML policies slow down the process. Professional guidance accelerates approvals.
- Legal Changes: Regulatory requirements may evolve, so always refer to the up-to-date BNB rules and forms.
Frequently Asked Questions (FAQ)
Q1: How fast is the EMI licensing process?
A: Most licenses are issued within 3–6 months once all documents are provided.
Q2: What capital is required to start an EMI?
A: At least BGN 700,000 (~EUR 357,000), fully paid.
Q3: Can non-EU citizens apply for an EMI license? What Extra Papers Do Non-EU Applicants Need?
A: Yes, non-EU individuals or entities fully qualify as shareholders or directors for a Bulgarian EMI, with Bulgarian law imposing zero nationality-based barriers on ownership stakes. Founders must register a Bulgarian company like an OOD (LLC) or AD (joint-stock), appointing a local AML compliance officer while keeping ultimate control offshore if desired.
Apostilled or legalized foreign incorporation papers translated into Bulgarian by sworn translators, plus UBO declarations detailing nationality, tax residency, and clean criminal records from home countries. Prove the initial capital’s clean source via audited statements or inheritance proofs, depositing the full BGN 700,000 into a Bulgarian bank account pre-application.
Bulgarian National Bank (BNB) ramps up due diligence on third-country UBOs, probing for sanctions exposure, politically exposed persons (PEPs), or ties to high-risk nations under PSD2 and AMLD5 rules. Recent FDI rules scrutinize investments over 10% from outside the EU in critical sectors, potentially delaying approval by 2-4 weeks for clearance.
Q4: What documents are mandatory for the application?
A: Founding documents, proof of capital, business plan, AML/KYC procedures, management CVs, and more.
Q5: How is the annual BNB supervisory fee calculated?
A: By both a fixed and a variable component based on licensed activities, assets, and representatives.
Q6: Are there specific ongoing requirements post-licensing?
A: Yes. EMIs must report regularly, maintain capital levels, and comply with all relevant laws and BNB instructions.
Q7: Can the process be expedited?
A: Full compliance and clearly organized documentation at the outset are the best ways to speed up approval for EMI License.
Why Work With Belcheva & Karadjova Law Firm?
At Belcheva & Karadjova Legal, our fintech and regulatory team has direct experience with EMI licensing, compliance, and BNB communications. We provide:
- Personalized licensing strategies tailored to your business
- Comprehensive documentation and review for BNB readiness
- Ongoing compliance and risk management support
Legal disclamers: This article is for informational purposes and not legal advice.
Ready to launch your electronic money business in Bulgaria or seeking guidance on EMI compliance?
Contact Belcheva & Karadjova Law Firm today for a tailored consultation, access to exclusive licensing checklists, or updates on the latest fintech laws in Bulgaria.
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