An EMI (electronic money institution) is a licensed payment institution that issues electronic money and makes transfers; by law it does not accept deposits. A bank accepts deposits and lends to clients, and the balance in its accounts in the EU and the United Kingdom is covered by a government deposit guarantee scheme. For an offshore company, or any international company, the choice between them comes down to three questions: who protects the money in the account, which transactions the business needs, and whether the provider is willing to serve your jurisdiction and industry.
What the law says in the EU and the United Kingdom
The rules for EMIs in the European Union are set by the Electronic Money Directive 2009/110/EC (EMD2). Four practical conclusions follow from it:
- Deposits are prohibited. An EMI may not take deposits or other repayable funds from the public (Article 6(2)), and funds received from a client are exchanged for electronic money without delay and are not treated as a deposit (Article 6(3)).
- Client funds are segregated. An EMI must safeguard the funds it receives (Article 7). Money received by means of a payment instrument must be protected no later than five business days after the electronic money is issued.
- Interest on the balance is prohibited. The directive expressly prohibits paying interest or any other benefit related to the length of time electronic money is held (Article 12).
- Credit is limited. An EMI may grant only credit related to payment services, on the terms of the Payment Services Directive, and not from safeguarded client funds (Article 6(1)).
Bank deposits are protected by Directive 2014/49/EU on deposit guarantee schemes: the coverage level is EUR 100,000 per depositor (Article 6(1)). In the United Kingdom, since December 1, 2025, the FSCS compensates up to GBP 120,000 per person per authorized bank; accounts at banks of the same group share one limit. The FCA states separately that FSCS protection does not extend to the issuance of electronic money and payment services.
EMI and bank compared
| Parameter | EMI | Bank |
|---|---|---|
| Taking deposits | prohibited (EMD2, Article 6(2)) | core business |
| Balance protection | safeguarding: segregation or insurance | deposit guarantee: €100,000 in the EU, £120,000 in the UK |
| Interest on the balance | prohibited (EMD2, Article 12) | possible, on the bank's terms |
| Credit and guarantees | only credit related to payments | credit lines, overdraft, bank guarantees |
| Return of funds in insolvency | through an administrator; timing depends on the procedure | payout under the deposit guarantee scheme |
How safeguarding works
The Payment Services Directive (EU) 2015/2366 (Article 10) allows two methods of protecting client money. The first is to keep it separate from the institution's own funds, in a segregated account with a credit institution or in secure, liquid assets, protected from the claims of other creditors in insolvency. The second is an insurance policy or a comparable guarantee from an insurer or a bank outside the EMI's group.
Safeguarding reduces the risk of losing money, but it works differently from a deposit guarantee. If an EMI goes out of business, the funds are returned by an administrator, and the FCA warns that clients may face delays in getting their money back or lose part of it. In the United Kingdom, since May 7, 2026, an additional safeguarding regime (PS25/12) has applied, tightening the record-keeping, reporting and monitoring of safeguarded funds.
How to choose for an international company
An EMI is convenient for invoicing, multi-currency settlements and fast transfers; a bank is needed for large reserves, lending and products such as guarantees. Many companies use both channels. Before onboarding, check:
- The provider's regulator and license number in the public register (in the United Kingdom, the FCA Register).
- Which countries of company registration and owner residency the provider accepts: these lists differ between EMIs and banks and change over time.
- Currencies and payment systems: SEPA, SWIFT, Faster Payments, card payouts.
- Industry restrictions, limits, conditions for freezing funds and the procedure for returning funds when the account is closed.
- The safeguarding method and where client money is held.
Both types of institution carry out KYC on the company and its beneficial owners. The document requirements are covered in our article on KYC and KYB for a foreign company, and the steps for opening a traditional account in the guide to a bank account for a foreign company.
A business scenario
An online agency operating through a UK Ltd accepts payments in euros and pounds. For day-to-day settlements, an EMI with an IBAN and a multi-currency balance is enough. A reserve covering six months of expenses is better kept in a bank: the balance there is covered by the deposit guarantee, and as the business grows it will need an overdraft or a credit line. A second channel also protects against a temporary block while a review is under way.
Common mistakes
- Treating an IBAN as a sign of a bank account: EMIs issue IBANs too.
- Keeping all liquidity with one provider without a backup way to receive payments.
- Hiding the real industry or clients' countries in the application form: the mismatch is detected during transaction monitoring and leads to the account being closed.
How Offshora helps
If the company accepts cards, a payment provider joins the choice of account; see the guide to payment processing and acquiring. How to choose a bank for the planned payments is described in how to choose a bank for a foreign company, and common expectations of an "account that comes with the company" are reviewed in myths about offshore bank accounts.
Offshora prepares a company for a bank and an EMI: we put together the KYC package, describe the business model and select providers for the country of registration and the industry. For details, see the page bank account for an offshore company. To get a proposal, submit a request and state the jurisdiction, industry, currencies and expected turnover.
Tell us about your task, and we will propose a jurisdiction, the scope of services and the order of work.
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