Lithuania has made tremendous progress in establishing itself as a banking and payment institution. The country has taken the initiative to create a favourable regulatory environment for fintech enterprises, attracting a large number of payment service providers, electronic money institutions, and other financial institutions.
Lithuania has established a modern and transparent financial services regulatory framework. As the country’s central bank and financial supervisory authority, the Bank of Lithuania oversees the licencing and supervision of payment institutions, electronic money institutions, and other financial enterprises.
Payment Institutions (PIs) and Electronic Money Institutions (EMIs) are among the financial institutions that can be licenced in Lithuania. The licencing process is typically thought to be simplified, with well-defined rules and guidelines.
Lithuania is located in Europe’s geographic centre and has a short coastline along the southeastern part of the Baltic Sea. The state shares marine borders with Sweden and borders Belarus to the east, Latvia to the north, Poland and the Russian exclave of Kaliningrad to the southeast.
According to Worldometer’s analysis of the most recent United Nations data, the current population of Lithuania is 2,612,966 as of May 25, 2023.
Since 1991, the Baltic language of Lithuanian, which is closely linked to Latvian, has been the official language of Lithuania.
Lithuania’s legal system is based on continental European legal traditions. Lithuania’s legal system was transformed during Soviet rule to conform to that of the USSR, however the forced standards and practises have been abolished since 1990. Recent years have seen significant progress in the reform of the judicial system.
1. E-Money License Option
Lithuania also provides the Electronic Money Institution (EMI) Licence in addition to the PI Licence. Payment institutions can increase their variety of services and potential business prospects by obtaining an EMI Licence.
2. Cost-Effective Licensing Process
In comparison to other European jurisdictions, the licencing process in Lithuania is widely regarded as cost-effective. The PI Licence requirements are transparent, and the associated fees and capital requirements are reasonable, making it an appealing option for fintech startups and companies looking to enter the European market.
3. Strong IT Infrastructure
Lithuania has spent heavily in developing a robust IT infrastructure, making it a suitable site for digital payment services. The country has a high level of internet usage, advanced telecommunications networks, and a technologically competent workforce, all of which provide a solid platform for operating payment services.
4. Supportive Regulatory Authority
The Bank of Lithuania, the country’s central bank and financial supervisory authority, is known for its proactive approach to fintech regulation. They have established the “Regulatory Sandbox” and other measures to assist innovative financial services, promoting a collaborative connection between the regulator and industry participants.
5. Access to the European Single Market
Lithuania is a member of the European Union (EU) and the European Economic Area (EEA). By acquiring a PI License in Lithuania, you can benefit from the “passporting” rights provided by EU regulations. This means you can operate and provide your licenced services in other EU and EEA member countries without obtaining additional licences in each one.
6. Competitive Advantage in the Baltic Region
With its PI License, a company can establish a presence in Lithuania and tap into the growing Baltic market, which includes Estonia, Latvia, and Lithuania. This region is known for its strong digital infrastructure and technologically savvy population, which creates opportunities for market expansion and penetration.
7. Regulatory Framework
Lithuania has created a favourable regulatory environment for payment institutions, with clear standards and procedures for getting and maintaining a PI License. The regulatory environment is intended to promote innovation and the growth of fintech firms.
|License:||International Bank License|
|Timeframe for Approval:||3 to 4 months|
|Regulator:||The Bank of Lithuania|
|Local Director:||At least 1 director|
|Local Shareholder:||At least 1 shareholder|
|Local Registered Office:||Required|
|Corporate Tax Rate:||15%|
|Minimum Paid-up Capital:||EUR 125,000.00|
|Tax Structure:||0% Tax on Offshore Profits|
(together with the document and project preparation)
The application must demonstrate to the Bank of Lithuania that: