Cryptocurrency License in Lithuania (Authorisation) – An Overview
Private Financial Services specialists were among the first to assist with obtaining cryptocurrency license in Lithuania.
At the beginning of 2020, amendments were made to the Law on the Prevention of Money Laundering and Terrorist Financing in Lithuania. Already widely known concepts in some jurisdictions were introduced:
– a virtual currency exchange operator (this is a legal entity that exchanges cryptocurrencies by charging a certain commission for the service);
– a virtual currency depositary wallet operator (this is a company or branch of another company that manages wallets for storing customers’ cryptocurrencies).
There are no licenses to carry out crypto-activities in Lithuania, for the operations of exchanging and storing virtual currency, it is enough to receive an authorization from the regulatory body – the Financial Crimes Investigation Service. Authorization (an entry in the state register of legal entities) for conducting crypto activities in the country and abroad can be obtained by anyone who meets the requirements of Lithuanian laws.
Benefits of Crypto-License in Lithuania (Authorisation)
Timeframes
All stages of obtaining an entry in the register of activities in the field of virtual currencies take on average 2-3 months if carried out remotely. The process can always be accelerated by arriving at the place. A visit to Lithuania for a few days will shorten the time for obtaining an entry in the register by a couple of weeks.
Legislation
Lithuanian legislation governing the scope of activities of crypto companies is quite complex. Before applying for a permit for cryptocurrency transactions, you should familiarize yourself with the law on the prevention of money laundering and the financing of terrorism, as well as the Civil Code of Lithuania. If the project involves the issuance of tokens, then knowledge of the law on securities and the law on markets for financial instruments will come in handy.
Price
Support in obtaining crypto-authorization in Lithuania starts from 3000 euros. If desired, all actions are performed remotely.
The authorization process can be started with the creation of a new company, as well as applying for permission to conduct crypto activities for an existing Lithuanian company. But a crypto company must be clearly separated from any other licensed financial institution (for example, EMI).
Convenience
Possibility of remote registration and application. As in Estonia, in Lithuania, from 2020, it is possible to obtain e-residency, which will help, on a par with local residents, to use all state portals and services, as well as remotely manage a company.
Bank account
Lithuania is one of the best fintech countries in Europe. As of 2021, about 40 payment institutions and more than 70 e-money issuers were operating in Lithuania. Therefore, there will be no difficulties with opening an account for a crypto company. The final result depends on the business model of the project, the experience of persons responsible for AML in the company, and cooperation with the payment solution provider in the KYC verification process.
Tax Policy
The profit of Lithuanian companies is a subject to 15% tax. The tax on dividends is 15%. Lithuania has agreements on avoidance of double taxation with 55 countries. VAT is 21%.
Companies involved in crypto activities do not have specific reporting requirements. Bookkeeping should be done in the same way as in a regular company.
Cryptocurrency License in Lithuania (Authorisation) – Procedure and Required Documents
The Steps
- Analysis of the project, analysis of the compliance of the project with the requirements of the regulator;
- Preparation of documents and approval of shareholders in IAC;
- Preparation of documents in accordance with the requirements of the legislation in relation to operators of virtual currencies for the registration of a legal entity;
- Establishment of a limited liability company (UAB);
- Current account opening;
- Increasing of the authorized capital.
- Preparation/adaptation of AML, KYC policies based on FCIS requirements.
- Submission of an application for permission to carry out transactions with virtual currency to the supervisory authority – the Financial Crimes Investigation Service (FCIS).
Requirements for the Stakeholders
In order to obtain permission to carry out crypto activities, a company must meet certain requirements. For example, a Lithuanian crypto company should have a clear structure: 1 or more founders, at least 3 board members, a KYC/AML officer, and a compliance specialist. All members of the company must have an impeccable reputation and have a confirmation of the absence of a criminal record.
Authorized companies must comply with the following requirements:
- Carry out identification and verification of clients;
- Submit reports to the Financial Crimes Investigation Service (FCIS);
- Collect client data in accordance with the requirements of the law regulating crypto activities;
Our Specialists Will Provide the Following Services:
Preliminary analysis of the business model and consultation;
Full support for the establishment of the company;
Assistance in the development of internal policies and procedures;
Full support for obtaining a cryptocurrency license in Lithuania;
Submission of all documents and petitions to the supervisory authorities;
Legal address for the company. If necessary, assistance in finding a separate office and hiring a qualified staff;
Payment of all state, notary fees and duties;
Legal and accounting advice.