Regulatory AlertsLatvia: fintech & payments regulation
RegulatedLatvia: VASP licensing via FCMC under EU AMLD5/6; Latvijas Banka oversees payment institutions
- Lead regulator
- Financial and Capital Market Commission (FCMC)
- Also involved
- Latvijas Banka (payment institutions/banking) · FIU (AML supervision)
- Core law
- Law on the Prevention of Money Laundering and Terrorist Financing (2010, amended)
- Entry capital
- EUR 125,000 (Payment Institution); EUR 350,000 (E-money Institution)
- Approval timeline
- 3-6 months
- Customer assets
- Segregated accounts required
- Data protection
- GDPR · Data State Inspectorate
- Sandbox
- Yes - FCMC Regulatory Sandbox
Latvia is a regulated EU jurisdiction where fintech and payment services are supervised primarily by the Financial and Capital Market Commission (FCMC) for VASPs and payment institutions, and by Latvijas Banka for banking and certain payment activities. The regime is aligned with EU directives (PSD2, AMLD5/6). Entry requires a license from the FCMC, with strict AML/CFT compliance obligations enforced by the Financial Intelligence Unit (FIU).
Which licence do you need?
| Your activity | Requirement | Capital | Timeline | Authority |
|---|---|---|---|---|
| Payment processing / gateway | LicencePayment Institution License Requires authorized capital and fit & proper management | EUR 125,000 | 3-6 months | FCMC |
| E-money & wallet issuance | LicenceE-money Institution License Higher capital than payment institutions; strict AML rules | EUR 350,000 | 3-6 months | FCMC |
| Domestic money transfer | LicencePayment Institution License Domestic transfers fall under payment institution scope | EUR 125,000 | 3-6 months | FCMC |
| Cross-border remittance | LicencePayment Institution License Cross-border remittance requires EU passporting or local license | EUR 125,000 | 3-6 months | FCMC |
| Agent network | LicencePayment Institution License Agents must be registered; principal remains liable | EUR 125,000 | 3-6 months | FCMC |
| Open banking / account information | LicencePayment Institution License AIS/PIS providers need payment institution license under PSD2 | EUR 125,000 | 3-6 months | FCMC |
| Foreign-exchange services | LicencePayment Institution License FX services included in payment institution scope | EUR 125,000 | 3-6 months | FCMC |
New — what changed recently
- 2024-01-01AMLD6 Implementation — Latvia implemented EU AMLD6, expanding criminal sanctions and clarifying VASP registration requirements.
- 2023-06-01FCMC Sandbox Expansion — FCMC expanded its regulatory sandbox to include more fintech models, including VASPs.
Market-entry checklist
- 1Incorporate Latvian entityRegister a limited liability company (SIA) with minimum share capital.
- 2Apply for FCMC licenseSubmit application for Payment Institution or E-money Institution license with EUR 125k/350k capital.
- 3Establish AML/CFT frameworkImplement robust AML/CFT policies and appoint a compliance officer.
- 4Register with FIURegister as a reporting entity with the Financial Intelligence Unit.
- 5Secure IT infrastructureEnsure IT systems meet FCMC security and operational resilience standards.