Fintech in Lithuania

December 8, 2022
Fintech in Lithuania

Lithuania Fintech niche has shown significant progress over the past few years, drawing the attention of the world’s media to it. Vilnius is an ideal place for fintech: there’re many talented specialists, an advantageous business and regulative space, and a comfortable ecosystem. Lithuania is second biggest Fintech hub in Europe after the UK in terms of quantity of licenses issued for issuance of e-money, licenses for payment companies and banking licenses with a special purpose. The Central Bank supports development of financial technologies, incl. non-bank lending and payment services.

Bank focuses on promotion of this industry, so Fintech regulation in Lithuania is simplified. You can quickly obtain a banking license or an EU payment establishment permission.

Fintech companies and counting in Lithuania

Almost a third of Fintech startups registered there, are headquartered outside the jurisdiction. Governmental apparatus seeks to engage talented entrepreneurs and high-class professionals and is actively working to facilitate the Fintech landscape in Lithuania.

  1. For owners, main advantage of Lithuanian residence lies in relatively inexpensive access to the EU markets, which consist of 512 million potential users.
  2. Program for newcomers – recommendations and assistance from Lithuanian Bank.
  3. Simple authorization.
  4. E-money issuers or payment institutions can obtain a license 2-3 times faster than in other European Union jurisdictions.
  5. Only state in EU with a simplified procedure for issuing licenses to new generation banks (eng. challenger banks).
  6. Applications can be submitted online (in English).
  7. Remote identification and support of new clients.
  8. Stable payment infrastructure.
  9. SEPA system is free-accessible.
  10. Abilities to create IBAN numbers.

Regulating Fintech in Lithuania: sandboxes

To accelerate introduction of innovative developments in fiscal market, in 2018 Fintech regulation in Lithuania created a special environment – ​​regulatory sandboxes. In such sandboxes, a fintech startup can test new products.

Lithuania conveniently organized IT nets and banks. In addition, the cost of living is greatly lower than in other EU countries. Thanks to these advantages, the fintech business has become a hallmark of Lithuania. Lithuania is very interested in the fact that the number of Fintech firms is constantly increasing. Its application permits startups to test products and response of the audience without having to bear the cost of compliance with some requirements.

In addition, if successful, uncertainty of Fintech regulation in Lithuania is reduced, which makes it easier for a startup to access financing, and by the time the production version of the product is launched on the market, a consumer protection system will already be prepared for it.

The speed of adoption and implementation of key regulatory decisions makes Lithuania an ideal entry point for fintech solutions to the European market.

Soft prudential conditions are complemented by ease of starting a business, a low corporate tax rate, low labor costs and a comfortable living environment, while an entrepreneurial ecosystem formed from dozens of accelerators, venture capital funds, coworking spaces and technology parks creates an atmosphere of innovation and cooperation.

These conditions are all that is needed both for creating a new business and for relocating an existing one. And access to European b2c consumers creates a multiplier demand for high-tech b2b solutions. For several years, regulation of Fintech in Lithuania has managed to create a decent level of opposition to the countries of Western and Northern Europe, and at the moment the development prospects look favorable.

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