Why Lithuania Has Become Europe's FinTech Capital
Lithuania has emerged as one of Europe's most attractive jurisdictions for electronic money institutions, with the Bank of Lithuania actively cultivating a regulatory environment that balances accessibility with robust oversight. The country ranked 4th in the Global Fintech Index 2020, and following Brexit, has become the preferred destination for many FinTech companies seeking EU market access.
With over 100 licensed payment and electronic money institutions operating under Bank of Lithuania supervision, the jurisdiction has demonstrated its capacity to support substantial FinTech activity while maintaining regulatory credibility.
Regulatory Framework and Authority
Lithuanian EMI licensing operates within a clear legal structure:
Primary Regulator: The Bank of Lithuania (Lietuvos bankas) serves as the sole licensing and supervisory authority for electronic money institutions.
Legislative Foundation: The Lithuanian Republic Law on Electronic Money, implementing EC Directive 2009/110, establishes the domestic legal framework for e-money activities.
European Integration: As a eurozone member since 2015 and SEPA participant since 2016, Lithuania offers direct integration with European payment infrastructure, including CENTROlink—the national automated clearing house providing access to 34 SEPA countries.
Processing Timelines: A Key Lithuanian Advantage
The Bank of Lithuania has established efficient processing procedures that distinguish it from many competing jurisdictions:
Standard EMI License: The statutory review period is 3 months from receipt of a complete application. In practice, well-prepared applications often receive decisions within this timeframe.
Restricted EMI License: Applications for limited-scope licenses undergo a 2-month review period.
First-Year Accommodation: The Bank of Lithuania takes a supportive approach during licensees' first operational year, focusing on guidance rather than punitive measures for minor compliance oversights—though serious deficiencies receive appropriate regulatory attention.
Permitted Activities Under Lithuanian EMI Authorization
A Lithuanian EMI license enables comprehensive payment and e-money services:
Electronic Money Issuance
Issue electronic money against receipt of funds, including prepaid cards, digital wallets, and stored value instruments.
Payment Card Services
Issue Visa and Mastercard branded payment instruments, enabling cardholders to make purchases and withdrawals globally.
Account Services
Open and maintain IBAN-denominated payment accounts for customers, providing full banking-like functionality within the e-money framework.
Payment Processing
Execute payment transactions including:
- •Credit transfers and standing orders
- •Direct debit collections
- •Card-based payment transactions
- •Cash deposit and withdrawal services
International Transfers
Process cross-border payments through SWIFT integration and SEPA participation, supporting transactions in EUR, USD, GBP, and other major currencies.
E-Wallet Solutions
Operate digital wallet platforms enabling customers to store, transfer, and spend electronic money through mobile and web applications.
Capital Requirements
Lithuanian EMI capital requirements align with EU standards while the overall cost structure remains competitive:
Minimum Share Capital
Standard EMI License: €350,000 in initial capital, which must be deposited in a Lithuanian bank account before license application.
Restricted EMI License: Reduced capital requirements apply for licenses with limited service scope or geographic restrictions.
Proof of Funds
The Bank of Lithuania requires clear documentation demonstrating the legitimate origin of capital funds, including source of wealth verification for significant shareholders.
Eligibility Criteria and Personnel Requirements
Management Qualifications
Lithuanian regulations require that EMI leadership demonstrate appropriate competence:
Directors and Managers: Must hold relevant higher education qualifications (typically in finance, economics, law, or related fields) combined with proven leadership experience in financial services.
Local Presence: A minimum of 4 employees must be based in Lithuania, including key management and compliance functions.
Shareholder Requirements
- •At least one shareholder aged 18 or older
- •Demonstrated solid business reputation
- •Lithuanian residency is not required for shareholders
- •Criminal background checks mandatory for all beneficial owners
Compliance Personnel
- •Qualified Anti-Money Laundering Officer required
- •Compliance function must have appropriate independence and authority
Documentation Package
Complete EMI applications require extensive documentation:
Corporate Documents
- •Company formation documents and registration certificates
- •Articles of association
- •Shareholder register and ownership structure documentation
- •Lease agreement for Lithuanian office premises
Business Documentation
- •Detailed business plan covering at least three years
- •Activity program describing operational strategy
- •Financial projections demonstrating business viability
- •Fee schedules and pricing policies
Compliance Framework
- •AML/CFT policies and procedures
- •Customer due diligence procedures
- •Transaction monitoring framework
- •Suspicious activity reporting procedures
- •Risk management policies
- •Internal control mechanisms
Personnel Documentation
- •Identification documents for all founders, directors, and beneficial owners
- •Criminal record certificates (apostilled where applicable)
- •CVs demonstrating relevant qualifications and experience
- •Fit and proper declarations
Technical Documentation
- •IT systems architecture and security measures
- •Business continuity and disaster recovery plans
- •Data protection policies
- •Client fund safeguarding arrangements
The Licensing Process
Phase 1: Preparation and Initial Assessment
- •Compile and review all required documentation
- •Engage with Bank of Lithuania for preliminary consultation
- •Address any identified gaps or concerns before formal submission
Phase 2: Infrastructure Development
- •Establish Lithuanian company (if not already formed)
- •Open bank account and deposit share capital
- •Secure office premises in Lithuania
- •Recruit required local personnel
Phase 3: Application Submission
- •Submit complete application package to Bank of Lithuania
- •Pay applicable state fee (€1,463 for standard license; €1,235 for restricted license)
- •Receive acknowledgment and case reference
Phase 4: Regulatory Review
- •Bank of Lithuania assesses application completeness
- •Responds with any requests for additional information
- •Evaluates fitness and propriety of proposed management
- •Reviews technical and operational readiness
Phase 5: Decision
- •License granted (potentially with conditions)
- •Or application refused with reasons
Phase 6: Post-License Implementation
- •Complete IT system deployment
- •Establish banking partnerships
- •Connect to payment infrastructure (CENTROlink, SWIFT)
- •Begin supervised operations
Competitive Advantages of Lithuanian EMI Licensing
Regulatory Efficiency
The Bank of Lithuania has invested significantly in streamlining licensing procedures, with dedicated FinTech teams and clear guidance documentation reducing uncertainty for applicants.
EU Market Access
Lithuanian EMI licenses carry passporting rights across the European Economic Area, enabling licensed firms to provide services in all EU/EEA member states through establishment or services passport.
Payment Infrastructure
Direct access to CENTROlink provides efficient routing to the entire SEPA zone, while Lithuania's developed correspondent banking relationships support global payment capabilities.
Cost Competitiveness
While capital requirements match EU standards, Lithuania offers competitive operating costs compared to Western European alternatives, with lower office rental, salary, and professional services costs.
Language Accessibility
The Bank of Lithuania accepts applications and correspondence in English, removing language barriers that complicate licensing in some other EU jurisdictions.
Tax Environment
Lithuania ranks favorably for international tax competitiveness, with a 15% corporate tax rate and various incentives for qualifying activities.
Lithuania Compared to Alternative Jurisdictions
When evaluating Lithuanian EMI licensing against alternatives, several factors merit consideration:
Versus Cyprus
Lithuania offers faster licensing timelines (3-6 months versus 6-12 months typically) and stronger regulatory support for FinTech. Cyprus provides lower operating costs and an extensive double-taxation treaty network.
Versus UK (Post-Brexit)
Lithuanian licenses provide EU passporting unavailable to UK EMIs. The UK offers a larger domestic market and deeper financial services ecosystem.
Versus Malta
Both jurisdictions are established FinTech hubs. Lithuania typically offers faster processing while Malta has longer regulatory experience with cryptocurrency and gaming-related payments.
Common Questions About Lithuanian EMI Licensing
What qualifies as electronic money?
Electronic money is monetary value stored electronically (including magnetically) that represents a claim on the issuer, is issued on receipt of funds for making payment transactions, and is accepted by persons other than the issuer. Unlike cryptocurrency, e-money is backed by conventional currency and redeemable at par value.
What languages are acceptable for application documents?
The Bank of Lithuania accepts submissions in Lithuanian or English. Documents in other languages require certified translation by sworn translators.
When might a license application be rejected?
Common grounds for rejection include failure to demonstrate adequate capital, concerns about fitness and propriety of proposed management, inadequate compliance frameworks, or failure to address Bank of Lithuania queries within prescribed timeframes.
How long does a Lithuanian EMI license remain valid?
Lithuanian EMI licenses are granted indefinitely and do not require periodic renewal, though licensees must maintain continuous compliance with applicable requirements.
Conclusion
Lithuania has established itself as a premier European jurisdiction for electronic money institutions, combining efficient regulatory processes with full EU market access and competitive operating costs. The Bank of Lithuania's proactive approach to FinTech supervision creates an environment where well-prepared applicants can establish licensed operations within reasonable timeframes.
Success in obtaining a Lithuanian EMI license requires thorough preparation, including robust business planning, comprehensive compliance frameworks, and appropriate personnel with genuine expertise. Companies that invest in proper preparation position themselves to benefit from Lithuania's advantageous regulatory environment while building sustainable payment services businesses with pan-European reach.