How Much Is Needed for a Licence and Why One Amount Alone Is Not Enough
When a company first starts considering obtaining a payment institution licence (PI) in the Czech Republic, the very first question is almost always about capital. Usually, an entrepreneur quickly finds three figures — EUR 20 000, EUR 50 000 and EUR 125 000 — and draws understandable conclusion: it is enough to determine which of these numbers applies to the business model. In reality, however, the issue goes much deeper.
To obtain a platební instituce licence in the Czech Republic, it is not enough to rely only on the formal minimum threshold. The regulator does not assess one number in isolation, but the entire project as a whole. What matters is not only the amount of capital at the time of the application, but also which payment services the applicant intends to licence, what the capital is composed of, whether it can be properly documented, and whether the company will be able to maintain the required level of capital after the licence is granted.
In other words, in Czech licensing practice, capital is not simply an entry requirement. It is one of the key elements of the entire regulatory structure. That is why the capital question cannot be reduced to a mechanical choice between three amounts. First, it is necessary to understand what activities the company will actually carry out, how those activities fall under the law, what type of licence is genuinely required, and how this will look in the eyes of the Czech National Bank (ČNB) during the review of the application.
What PI Means in the Czech Republic
A PI in the Czech Republic is a platební instituce, that is, a payment institution that receives authorisation from the Czech National Bank (ČNB) to provide payment services.
At first glance, this definition seems obvious, but it contains an important detail that is often overlooked in practice.
A PI licence is not a universal permission “for any kind of payments.” It is always granted for a specific list of payment services expressly defined by law. This means that even before submitting the application, the company must clearly determine what activity it will perform and match it to the relevant categories of services.
That choice subsequently affects almost everything:
- the minimum initial capital requirement,
- the set of licensing documents,
- the requirements for internal processes,
- the operating model for client funds,
- the regulatory obligations that will apply after the licence is granted.
That is why, when preparing a project, it is not enough to describe the business idea in general terms. The future activity must be legally qualified. In other words, the company must answer a key question: which specific services under the law it will in fact provide.
In practice, this is one of the key stages of licensing preparation. A mistake at this level may lead to the following:
- the wrong capital threshold is chosen,
- the application package is structured incorrectly,
- the business model does not correspond to the declared licence.
That is why, during the review of an application, ČNB pays special attention to how accurately the applicant understands and describes its activity, and whether that activity corresponds to the selected type of licence.
How Much Initial Capital Is Needed for a PI in the Czech Republic
The amount of počáteční kapitál / initial capital for a PI in the Czech Republic depends directly on the specific payment services included in the licence. This is one of the basic principles of the law: there is no “universal” amount — it is always linked to the nature of the activity.
Czech legislation establishes three minimum thresholds
If the licence covers only money remittance — that is, a situation where the company receives funds for transfer but does not maintain a payment account for the client — the minimum capital is EUR 20 000.
Or if the licence relates to the payment initiation service (PIS), meaning a model where the company initiates a payment from a client’s account held with another provider, for example within the open banking framework, the minimum threshold is EUR 50 000.
If, however, the licence includes at least one of the so-called “classic” payment services listed in § 3 para. 1 letters a) to e), the minimum capital is EUR 125 000. This category includes, in particular, services connected with maintaining payment accounts, executing payment transactions from an account, accepting and withdrawing cash, and operations involving payment instruments.
The key practical conclusion is this
The capital threshold is not determined by how the company describes its own model, but by which services the project actually falls under from a legal perspective. Even if, at the conceptual stage, the project looks like a “simple payment service,” a closer analysis may show that it falls into the category of services for which the EUR 125 000 threshold applies.
In practice, this means:
- if the model is genuinely limited to remittance without maintaining accounts, the lower threshold of EUR 20 000 applies;
- if it is a PIS model, the threshold is EUR 50 000;
- if the company plans to work with payment accounts, process client payments, interact with merchants, or issue payment instruments, it is necessary to rely on the EUR 125 000 threshold.
This is exactly the stage where mistakes most often occur. Incorrect qualification of services may lead to the company initially relying on insufficient capital and building the application on the wrong regulatory basis.
Why, for a PI in the Czech Republic, It Is Better Not to Speak Only About “Share Capital”
When discussing a PI licence, people often use the term “share capital.” However, from the perspective of Czech regulation, the more accurate concept is initial capital (počáteční kapitál).
The difference is fundamental.
Share capital is a corporate law concept reflected in the company’s constitutional documents. Initial capital is a regulatory category defined not only by size, but also by its composition.
In the licensing process, ČNB assesses which specific elements make up the capital. These may include, for example:
- fully paid-up shares or ownership interests,
- share premium,
- retained earnings,
- and other eligible capital components.
Accordingly, what matters is not simply the existence of funds, but their qualification from the standpoint of regulatory requirements.
This distinction has practical significance for the preparation of the application. Formally, a company may have registered capital that appears sufficient. However, when reviewing the licence application, ČNB will analyse:
- whether the capital consists of eligible components,
- whether it is supported by proper documentation,
- whether it is correctly reflected in the project’s financial model.
Therefore, in preparation for licensing, the issue is not merely the size of the capital, but its structure and compliance with regulatory requirements.
One Amount in the Bank Account Is Not Enough
One of the most common mistakes in licensing preparation is to treat the capital requirement as a simple formality: place the minimum amount in a bank account, and the application can be filed.
In practice, this approach does not correspond to the regulator’s expectations.
When reviewing an application, ČNB assesses initial capital not in isolation, but together with other key elements of the project. In particular, it analyses:
- the activity plan,
- the business plan,
- the structure and sources of capital,
- financial projections confirming that the declared capital is genuinely sufficient for the selected business model.
Special attention is given to the quality of the business plan. It must be internally consistent, realistic, and reflect the actual model of the future business. Formal or overly general documents without specific calculations and assumptions are viewed negatively by the regulator. The same applies where key parameters of the business plan change substantially during the review of the application.
As a result, capital is viewed as part of a broader system. Its adequacy is assessed in light of:
- the business model,
- the organisational structure,
- the safeguarding mechanisms,
- the risk management and AML control framework,
- and the company’s actual operational resources.
That is why the existence of a formally sufficient amount does not in itself mean that the project is ready for licensing.
What ČNB Specifically Requires to Be Attached to the Application
The requirements for a PI licence application in the Czech Republic are laid down in secondary regulation and cover a full set of information about the future business.
The regulator expects not separate documents, but a complete and consistent picture of the project. The standard package includes, in particular:
- a detailed activity plan,
- a business plan with financial projections,
- a description of the organisational structure and governance system,
- documents confirming the initial capital and its composition,
- a description of safeguarding mechanisms for client funds,
- internal security procedures,
- AML/CTF documentation,
- information on holders of qualifying holdings,
- details of management and the internal control system.
Separate requirements apply to the confirmation of capital. It is necessary to provide documents confirming the existence of the funds that form part of the initial capital, for example bank statements or similar evidence. If the legal entity has not yet been incorporated, a document confirming the availability of funds intended to form the initial capital is required.
Why a Currency Buffer Is Needed Instead of Exactly the Minimum Amount
When calculating initial capital for a PI in the Czech Republic, it is important to consider not only the threshold set in euro, but also the way it is assessed by the regulator.
ČNB recalculates capital requirements into their euro equivalent using its own foreign exchange market rate. For the purpose of verifying compliance, the rate published on the day before the decision on the application is used.
This creates a practical risk for the applicant.
If the capital is formed in another currency, for example Czech crowns, and is calculated exactly at the minimum threshold, exchange rate fluctuations may result in the euro equivalent falling below the required level at the time of assessment.
In that case, the initial capital requirement will be regarded as not fulfilled.
ČNB’s methodology expressly indicates the need to take this factor into account. The applicant must ensure that the capital remains sufficient in view of possible currency fluctuations throughout the review process.
The practical conclusion is clear.
Planning capital exactly at the minimum threshold without a buffer creates unnecessary regulatory risk. A more resilient approach is to create a currency buffer that allows compliance to be maintained regardless of short-term exchange rate movements.
This is especially relevant where the capital is formed not in euro, but in national currency.
How the “Real” Capital Amount Is Determined in Practice
The formal initial capital thresholds only provide a starting point. To understand how much capital a project actually needs, it is important to look wider — not only from a legal perspective, but also from a practical one.
In practice, the required amount of capital consists of several layers.
The first layer is the regulatory minimum.
These are the basic thresholds established by law: EUR 20,000, EUR 50,000, or EUR 125,000, depending on the licensed services. Below this level, the project cannot be admitted to licensing.
The second layer is the currency buffer.
ČNB assesses compliance with the capital requirement in euro equivalent at its own rate close to the date of the decision. This means that where capital is formed in another currency, it is necessary to take potential exchange rate fluctuations into account and build in a reserve so as not to fall below the threshold at the time of assessment.
The third layer is the operational resource.
Even where the formal minimum is met, the company must have sufficient funds to launch and maintain its operations. This includes costs for the team, compliance and AML functions, legal support, IT infrastructure, audit, the development and implementation of internal policies, and interaction with banks and payment partners. These parameters are reflected in the business plan, and they are what demonstrate whether the declared capital is consistent with the scale of the project.
The fourth layer is the requirements after the licence is granted.
After authorisation, the company must maintain capital at no less than the required level. Depending on the business model, a capital adequacy requirement may also apply, calculated under separate methods and operating on an ongoing basis. This means that capital cannot be treated as a one-off resource used only at the licensing stage.
Taken together, these layers form the real capital benchmark.
That is why, to the question “Is EUR 125,000 enough?”, the correct answer always depends on the specific project.
From the point of view of the law, it may be the minimum acceptable threshold. However, capital adequacy can only be assessed after analysing the business model, the scope of services, the cost structure, and the financial plan.
This is precisely the stage at which it becomes clear whether the project complies with the regulator’s requirements not only formally, but in substance.
What Happens After the Licence Is Granted
Obtaining a PI licence is not the final point, but the transition to a permanent regulatory regime.
From the moment of authorisation, the company must continuously maintain capital at least at the level of initial capital. This is a basic requirement that applies throughout the life of the business, not only at the application stage.
For most models, however, the requirements do not stop there.
If the licence covers services that fall into the broader category of payment operations, the company is also subject to a capital adequacy requirement. This is no longer a fixed amount, but a dynamic indicator calculated under established methods.
ČNB determines the approach to calculating capital adequacy when granting the licence. Depending on the nature of the business, one of three methods may apply:
- A — based on operating expenses (overheads),
- B — based on payment volume,
- C — based on the basic indicator.
At the same time, the regulator may adjust the result of the calculation and set the requirement at a level up to 20% higher or lower than the base amount, depending on its assessment of the governance, controls, and risk profile of the particular company.
The practical meaning of this approach is the following.
Capital is viewed not as a fixed amount “for entry,” but as an indicator that must correspond on an ongoing basis to the scale and risks of the business. As operations grow or the business model changes, the capital requirements may also change.
That is why the minimum thresholds — EUR 20 000, EUR 50 000 or EUR 125 000 — should be seen only as the initial condition. The real amount of capital required for stable operations is determined by the structure of the business, the transaction volume, the expense level, and the overall organisation of the activity.
A Separate Nuance: PIS and AIS
Where the licence includes payment initiation services (PIS) or account information services (AIS), an additional requirement arises — the existence of insurance or comparable security. This is a separate element of the regulatory model and is not replaced by initial capital.
In addition, for projects limited only to AIS, Czech law provides for a separate licence category — account information service provider. In that case, the entry requirements are built around the existence of insurance or a guarantee, rather than the classical initial capital threshold applicable to a PI.
In practice, this means that at the project preparation stage it is important to determine not only the amount of capital, but also the correct regulatory category. This affects:
- the set of licensing requirements,
- the structure of the application,
- the overall regulatory burden.
When It Makes Sense to Consider the Small-Scale Regime Instead of a PI
A full PI licence is not required for every model. Czech regulation provides for a simplified regime — the small-scale payment service provider — which may be used in certain cases.
This regime is available where the average monthly amount of payment transactions over the last 12 months does not exceed the equivalent of EUR 3 000 000.
However, this approach comes with substantial limitations.
A small-scale provider:
- cannot provide PIS or AIS,
- operates under a limited regulatory status,
- as a rule, is not suitable for models aimed at scaling or cross-border business.
Therefore, this regime may be a reasonable solution for local or test projects, but for a business planning growth, product development, and a full market presence, choosing a PI licence is usually the more sustainable and strategically justified option.
What This Means for Business in Practice
The capital question for a PI has two levels of answer — formal and practical.
From the formal perspective, the requirements look quite simple:
- EUR 20 000 — for models limited to remittance,
- EUR 50 000 — for payment initiation,
- EUR 125 000 — where at least one of the main payment services is included.
However, at this level the understanding usually remains superficial.
From the practical perspective, capital is not an isolated number, but part of the project’s overall readiness for licensing. Its assessment includes:
- consistency with the selected services,
- the correct structure of initial capital,
- the existence of a currency buffer,
- its substantiation in the business plan,
- the ability to maintain capital after the licence is granted,
- the company’s overall organisational readiness for the regulator’s requirements.
It is precisely at this stage that the difference becomes clear between formal compliance with minimum requirements and genuine readiness for licensing.
Projects that focus only on minimum thresholds often underestimate the amount of preparation required and face delays or additional requests from the regulator. By contrast, a properly structured approach takes all elements into account from the outset — from the choice of licence to the justification of capital within the business model.
Initial capital for a PI in the Czech Republic is not a formal requirement that can be considered in isolation. It is part of the overall regulatory model and is assessed in the context of the entire application and the future business activity.
Focusing only on minimum thresholds inevitably gives an incomplete picture. A correct assessment requires taking into account not only the type of licence and the list of services, but also the capital structure, the business plan, the model for handling client funds, the governance system, and the requirements that will apply after the licence is granted.
In this context, the question “how much capital is needed?” becomes secondary. The key issue becomes something else: whether the selected amount of capital fits the specific business model and allows the company not only to obtain the licence, but also to operate sustainably in a regulated environment.
This is exactly the approach that underlies successful PI projects: capital is not treated as a minimum threshold for filing the application, but as an element embedded in the logic of the entire business.
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Book PI Strategy CallFAQ: PI Initial Capital in the Czech Republic
What is the minimum capital required for a PI in the Czech Republic?
For a platební instituce in the Czech Republic, three initial capital thresholds apply: EUR 20,000 if the licence covers only money remittance, EUR 50,000 for a payment initiation service, and EUR 125,000 if the licence includes at least one of the main payment services under § 3 para. 1 letters a) to e). This follows both from the law and from ČNB methodology.
What determines whether the threshold is EUR 20,000, EUR 50,000 or EUR 125,000?
The amount depends not on the project name, but on the set of services included in the licence. If the model is limited to remittance, the lower threshold applies; for PIS, the middle threshold applies; for more “classic” payment services, including maintaining or executing transactions from an account and other services in the a–e group, the EUR 125,000 threshold applies.
Is it enough simply to show the required amount in a bank account?
No. ČNB looks at the project more broadly: it requires a business plan, information on the amount and composition of the initial capital, documents confirming the capital and its structure, and financial indicators showing that the capital is genuinely sufficient for the chosen model. Formally “placing the money in an account” is not enough.
Is it necessary to keep a buffer above the minimum threshold?
Yes. ČNB uses its own foreign exchange market rate to convert the euro threshold into CZK and expressly states that the applicant needs a sufficient buffer in case of currency fluctuations. If, during the review of the application, the capital falls below the required euro equivalent, this is treated as non-compliance with the initial capital requirement.
What documents usually confirm capital for a PI application?
In ČNB methodology, the key supporting evidence includes documents relating to the initial capital and its structure, for example a bank statement confirming the existence of funds intended to form the initial capital, especially if the legal entity has not yet been incorporated. At the same time, this information must be consistent with the business plan and financial projections.
What happens to capital after the licence is granted?
The requirements do not end once the licence is obtained. In its decision, ČNB determines for the PI one of the approaches to calculating capital adequacy — based on overheads, payment volume, or the basic indicator — and that approach becomes binding on the company. In other words, the starting capital is only an entry threshold; after that, an ongoing prudential regime begins.
Is insurance or a guarantee required for a PIS or AIS model?
Yes. If the PI licence includes payment initiation services or account information services, the law requires insurance or comparable security to be in place for the benefit of the applicant. For PIS, this is specifically stated in the provisions relating to insurance and security.
Can a small-scale regime be chosen instead of a PI?
Sometimes yes. For a small-scale payment service provider, the limit is that the average monthly volume of payment transactions in the Czech Republic over the last 12 months must not exceed the equivalent of EUR 3,000,000. However, this regime has limitations: a small-scale provider may not provide PIS or AIS.
What is the most common mistake applicants make?
The most common mistake is to think that the whole issue is solved by one number: EUR 20,000, EUR 50,000, or EUR 125,000. In practice, ČNB assesses not only the minimum amount, but also the composition of the capital, the supporting evidence, its link to the business plan, the currency buffer, and future capital adequacy. That is why real readiness for a PI licence is almost always broader than simply “raising the minimum amount.”
