Lithuania is one of the most thriving hubs on the global scale for financial technology (fintech) businesses. The government has made tremendous positive reforms to promote entrepreneurship in the said sector.
For instance, the Lithuanian Central Bank actively supports and facilitates fintech and non-bank payment services by easing their registration.
So, if you own or are about to build a digital finance business such as cryptocurrency, there are plenty of opportunities to seize in Lithuania.
The questions are – what are the step-by-step processes? Do I need to acquire a crypto license – Lithuania? Find out the answers and more in this article.
What are the benefits of obtaining a crypto License in Lithuania?
To regulate the digital finance industry, Lithuania and other members of the EU have authorized the permission of financial transactions with cryptocurrency (FCIS).
The involvement of an official regulator in the crypto and finance ecosystem is aimed at facilitating safer transactions, reducing the risk of money laundering and other forms of cyber crimes.
All Virtual Asset Service Provider (VASP) companies are obliged to establish themselves as a limited liability corporation (UAB). Only then, they can obtain a crypto license to operate.
There are two types of licenses in Lithuania:
- Cryptocurrency exchange license. Applied to companies who gain commissions from the exchange and trade of virtual currency against FIAT and vice versa.
- Cryptocurrency wallet license (cryptocurrency custodial services). It allows companies to store clients’ wallet virtual currencies with private key encryptions.
Compared to other EU nations, the crypto licensing processes in Lithuania are the most affordable, flexible, and transparent.
Here are a couple of benefits of getting a crypto license in Lithuania:
- Lower costs, especially compared to major EU countries.
- Faster registration time due to less bureaucratic procedures. To acquire a license, it typically only takes weeks or a month.
- Remote registration process, which is beneficial for foreign or international businesses.
- Low corporation tax rates and a range of tax incentives to take advantage of.
- Only one director is required to establish a crypto business. Plus, non-Lithuanian citizens are allowed to take the strategic role.
- Any member of your organization, such as the CEO or employees with the relevant background, can go through a Know Your Client (KYC) or Anti-Money Laundering (AML) assessment without the interview burden.
How do I obtain a crypto license in Lithuania?
Cryptocurrency licenses are handled by the Bank of Lithuania, regulated and supervised by the Financial Crimes Investigation Service (FCIS), and issued by the Business Register.
Now, let’s get into the step-by-step processes for acquiring a crypto license in Lithuania:
- Document submission and assessment (1-2 days)
In this step, you will need to submit the following documents:
- An up-to-date passport copy for foreign business owners or residence
- A business model of the crypto business in 1-2 A4 pages
- The fixed company name
- The names of the employees in the business, including their address
- The budget and scope of the business
The authority will then review all of the requirements collected.
- Business registration (3-4 weeks)
To obtain a crypto license, you have to register a limited liability company (UAB) and pay a shared capital of EUR 125,000.
The formation of a corporate structure can be challenging due to the complexity of the requirements, such as the need to draft Articles of Association, especially for those coming outside of the law background.
If you need assistance with the registration process, our experts at Demire Inc. are ready to help with:
- Arranging and conducting a notary deal
- Transferring, processing, and monitoring the documents for commercial registry
- Making adjustments to the Articles of Association
- Submitting a special JAR form to register your company as a Virtual Asset Service Provider under the commercial code of activity
- Obtaining the electronic forms of corporate and other supplemental documents from the authorized registry
- Conducting sworn translations from English to Lithuania and vice versa
- Providing notarization and apostille of corporate documents
- Crypto license registration (2-3 weeks)
This phase takes place after the activity of VASP has been settled by the authority. During the procedures of acquiring a crypto license, prepare yourself to:
- Answer a list of 30-40 questions that revolve around your customers, businesses, risk management, and other topics.
- Attach the answers to the main set of documents, which include due diligence measures, sanction implementations, data storage and collection, as well as verification.
- Look for a physical office, contact the landlords, and conclude a lease agreement.
- Search for a KYC/KYT provider compliant with the AML legislation.
- Fill out a form and submit it to the FCIS in regards to the exchange of virtual currency wallet
- Bank account opening (2-4 weeks)
Finally, your company has to open an operational corporate account under crypto through a Lithuanian bank or an Electronic Money Institution (EMI).
Here are the files you need to prepare:
- Flow of funds
- Source of wealth
- The purpose of opening an account
- Key partners
- Company website
- Utility bill
Furthermore, you will need to integrate your business with an accountant to comply with the framework of crypto accounting.
This is to prevent any legal detention from the authority, which can result in the shutdown of the business.
Takeaway
Compared to other European nations, opening a crypto business in Lithuania is faster, more affordable, and less frustrating.
Still, you need to register your business as a limited liability corporation (UAB) to obtain a crypto license, which isn’t particularly easy.
But don’t worry, you can always reach out to Demire Inc. to make the company registration process as smooth as possible. We also offer services for obtaining a crypto license in Lithuania – it’s a truly all-in-one solution for your needs.
