Lithuania as a modern finance hub

March 16, 2023
Lithuania as a modern finance hub

Good possibilities for investments in Lithuanian financial space in last years attracted more organizations and foreigners who select this jurisdiction as a sustained state, with relatively uncomplicated and secure investments’ policies. Attracting investments in Lithuanian finance is one of the most important strategic goals of the state, therefore, in order to ensure the most effective implementation of the mentioned goal, the government is constantly progressing its reputation and its attraction among capital-holders not only locally, but also for foreign companies or individuals. Thus, opening a financial business in Lithuania is a profitable option in long-term-perspective.

Lithuanian Fintech community

Over past years, Lithuanian Fin-sector has shown significant growth, and it’s attracting the attention of the world’s media. Vilnius is an ideal place for fintech: there are many talented specialists, a favorable commercial and regulatory basis, and a comfortable ecosystem. Advantages of this jurisdiction as a Fin-Center are the following.

  1. Program for newcomers – recommendations and assistance from Lithuanian Bank.
  2. Simple authorization. E-money issuers or payment establishments can obtain a license 2-3-times faster.
  3. The only jurisdiction in EU that has a simplified procedure for issuing licenses to new generation banks.
  4. The application can be submitted online.
  5. Remote identification and support of new clients.
  6. Full access to the SEPA system (34 countries).
  7. Direct technical access to SEPA-system through Lithuanian Bank.
  8. Ability to create your own IBANs.

The deposits of the population had a significant impact on the growth of deposits in previous year-period, and there was also an growth in deposits of private enterprises, authorities and municipal enterprises. Last year, the most active was the provision of loans to private enterprises and financial institutions, while the volume of lending to individuals and state and municipal enterprises decreased. The volume of cooperation between the Lithuanian banking sector and non-residents is also high.

Recently, a new model and principles of supervision of financial market participants has been applied – supervision has become more future-oriented, more attention has been paid to identifying risks and problems of various types and making decisions at an early stage: a quarterly comprehensive analysis of activities is carried out, and risk controlling in every bank and insurance company. If more significant problems are found, they are inspected. In addition, supervision has become more reliant on risk assessment – most of the attention is paid to those participants in certain sectors of the financial market being characterized by high risks.

Lithuania is characterized by a stable and well-capitalized banking-system with systemic participants supervised by EU Central Bank and Lithuanian Bank. Capital of Lithuanian banks is twice as much as required by the controlling organizations. In recent years, the financial sector has experienced a major breakthrough: active innovative fintech companies (modern companies operating in the field of financial services) are not far behind classic banks. Lithuanian regulators have taken a proactive approach to making the country the largest fintech hub in the EU through licenses. Government is committed to continuing its efforts, and Finance Ministry is finalizing the National Financial Technology Guidelines 2023-2028, which will set the sector’s strategic growth direction for the next five years.

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