Regulated fintech is the category where the EU’s single-market promise is most tested. Payments, e-money, investment services, crypto-asset services — each has its own authorisation regime, each is granted by a national competent authority, and each is “passportable” across the 27 member states once you have it. EU INC sits under all of this as the legal-entity base layer. It doesn’t replace the licences, but it does meaningfully simplify the structure around them.
For an orientation to where the EU is actually steering this, the European Commission’s digital-finance overview is a readable map of the pieces: digital operational resilience (DORA), crypto-assets (MiCA), open finance, instant payments, and the ongoing PSD2-to-PSD3 modernisation. If you’re going to operate a fintech in the EU, those are the headline regimes you’ll touch.
The three layers of a regulated fintech
Every regulated EU fintech has the same three-layer structure, whether it’s a neobank in Lithuania, a payment institution in France or a MiCA-licensed exchange in Ireland:
- Legal entity. A company, registered somewhere, with governance, shareholders and annual accounts. The wrapper EU INC improves.
- Authorisation / licence. A specific regulatory permission to do specific activity — EMI, PI, investment firm, AIFM, MiCA CASP, etc.
- Ongoing supervision. A national competent authority (NCA) that supervises you day-to-day: BaFin, ACPR, CBI, CSSF, AFM, CNMV and so on.
EU INC is about layer 1. It makes the legal entity pan-European. Layers 2 and 3 are national: you get licensed by a regulator (your home member state), and that licence passports across the other 26. That’s the single market in action. Choosing EU INC does not let you pick a different regulator than the one your home member state dictates; it does remove friction from your cross-border legal-entity footprint.
EU INC + EMI: the pan-European payments stack
Electronic Money Institutions (EMIs) are authorised under the E-Money Directive to issue electronic money — essentially prepaid balances that customers can use for payments. Once authorised in one member state, an EMI passports to the other 26. The classic EU EMI stack today is: incorporate in Lithuania or Ireland, obtain the EMI licence from the Bank of Lithuania or the Central Bank of Ireland, and passport outwards.
With EU INC that stack becomes cleaner because the entity itself is uniformly recognised everywhere. When you open a branch in Germany to be closer to your customers, or hire a compliance officer in Spain, the legal-entity layer is frictionless. The authorisation passport still does its job at the regulatory layer.
Capital requirements don’t change: initial capital of €350,000 for an EMI under current rules, plus own-funds requirements scaled to outstanding e-money. EU INC does not reduce those thresholds. What it does reduce is the structural cost of opening up operations across the EU once you have the licence.
EU INC + PI: payment services without e-money
Payment Institutions (PIs) are authorised under PSD2 (and eventually PSD3 / PSR) to provide payment services — but not to issue e-money. That covers initiation services (PISPs), account information services (AISPs), money remittance, acquiring, and execution of payment transactions.
The licensing pathway is the same: pick a home member state, get authorised there, passport to the other 26. Capital requirements are lower than EMI and scale with the services you offer: €20,000 for money remittance only, €50,000 for payment initiation (PIS), and €125,000 for execution of payment transactions and acquiring (the most common PI profile). For founders building a payments product, PI is often the cheaper first licence, with EMI added later as the business grows.
EU INC’s value at this layer is mostly in governance clarity. PI authorisation requires fit-and-proper scrutiny of directors, a detailed programme of operations, capital and own-funds evidence, and outsourcing arrangements documented end-to-end. That’s a lot of paperwork — and it’s paperwork that is easier to produce when your legal entity is a standard EU-wide form with well-understood governance.
EU INC + MiCA: crypto-asset services across the EU
MiCA — the Regulation on Markets in Crypto-Assets — creates a single authorisation regime for crypto-asset service providers (CASPs) across the EU. Custody, exchange, portfolio management, advice, placement, transfer, and related services fall inside. Authorisation is granted by a national competent authority and passports to the other member states, following the familiar PSD2 model.
MiCA is particularly sensitive to legal-entity structure because of the transitional and grandfathering rules: existing national crypto-registration regimes are being wound down, and firms are moving to full MiCA authorisation over a defined transition period. EU INC is useful here because it is unambiguously an EU legal entity under a harmonised regime, with none of the “is the company actually European?” questions that sometimes arose with third-country branches.
Capital requirements under MiCA vary by service (€50,000, €125,000 or €150,000 initial capital depending on the class). Governance requirements are significant: independent directors, risk management, segregation of client assets, detailed reporting. Again, EU INC doesn’t change those; it just makes the underlying entity layer standard.
DORA: operational resilience across regulated fintechs
The Digital Operational Resilience Act (DORA) applies horizontally to almost every regulated EU financial entity — banks, insurers, payment institutions, EMIs, MiCA CASPs, investment firms. It covers ICT risk management, incident reporting, digital resilience testing, third-party risk (the key piece for cloud-first fintechs), and oversight of “critical” ICT providers.
DORA is a compliance obligation, not a licence. It attaches to whoever is the regulated entity. For a fintech built on EU INC with an EMI or MiCA licence, DORA compliance sits alongside the licence obligations. The practical impact: you’ll need a documented ICT risk framework, regular resilience testing, contractual clauses with your cloud and SaaS providers, and an incident-reporting pipeline to your NCA.
Permanent establishment and substance
Fintechs are particularly exposed to substance questions. A payments company registered in Lithuania with 40 engineers in Berlin, a customer-success team in Madrid and a CEO who lives in London has to think carefully about where “effective management” actually happens — because that determines corporate tax residency, which determines how corporation tax is levied, which determines how investor returns look on the cap table.
EU INC does not solve substance questions. The same effective-management tests apply regardless of the wrapper. What it does simplify is the administrative expression of substance: if your board actually meets in Lithuania and your principal place of effective management is there, you don’t also need to track a patchwork of national branch registrations for basic contract signing and hiring. See also our playbook for non-EU founders, which covers the substance question at more length.
Anti-money laundering: the compliance spine
Regulated fintechs live under the EU AML regime — currently the 6th AML Directive moving to the AML Regulation and the AML Authority (AMLA). KYC on customers, UBO identification, transaction monitoring, suspicious activity reporting, sanctions screening, and enhanced due diligence on higher-risk relationships are all in scope.
EU INC is neither stricter nor more lenient than any national form in AML terms. What it does do is simplify two administrative pieces: the UBO filing (one EU-wide register, harmonised template) and onboarding checks from correspondent banks and payment networks, who generally find a clean EU-incorporated entity easier to onboard than a patchwork of third-country subsidiaries.
What EU INC is not for a fintech
Two things EU INC does not give you:
- A licence. EU INC is a company form. EMI, PI, MiCA CASP, investment firm, AIFM, MTF operator — these are all licences. You get them separately, from a national regulator, under EU-harmonised rules.
- Regulatory arbitrage. You don’t pick a different regulator by picking EU INC. The NCA is determined by your home member state. If you want the Central Bank of Ireland, register in Ireland. If you want Bank of Lithuania, register in Lithuania. Same logic under EU INC as under any national form.
A realistic fintech launch sequence
- Decide your home member state. This is simultaneously your NCA choice and your EU INC registration choice. The usual considerations apply: regulator speed and responsiveness, language, fintech ecosystem, talent pool.
- Incorporate as EU INC in that member state.
- Build your programme of operations, capital plan, governance structure and ICT risk framework in parallel with the entity being registered. Licence files are long.
- File the licence application with the NCA. Plan for 6–18 months, depending on activity and NCA.
- Set up passport notifications to the other member states where you plan to operate. This is administrative paperwork, not a new licence.
- Stand up DORA and AML frameworks before go-live. These are not optional.
Nothing in that sequence is changed by EU INC except the first two steps — but those two steps are the foundation everything else rests on. Getting them right matters disproportionately.
Frequently asked questions
Does EU INC give me a fintech licence?
No. EU INC is a legal entity, not a financial authorisation. You still need the appropriate licence for your activity: EMI, PI, MiCA CASP, investment firm, AIFM, etc. EU INC only simplifies the legal-entity layer underneath.
What is the minimum capital for a Payment Institution in the EU?
Capital under PSD2 scales with the services you provide: €20,000 for money remittance only, €50,000 for payment initiation (PIS), and €125,000 for execution of payment transactions and acquiring. Account information services (AISPs) have no initial-capital requirement but must hold professional indemnity insurance.
What is the minimum capital for an EMI in the EU?
€350,000 initial capital under the E-Money Directive, plus own-funds scaled to outstanding e-money.
What is MiCA and when does it apply?
MiCA is the EU Regulation on Markets in Crypto-Assets. It creates a single, passportable authorisation for crypto-asset service providers (CASPs) across the EU. Initial capital varies by class: €50,000, €125,000 or €150,000. The CASP regime applies from 30 December 2024, with national transitional rules running into 2026.