Lithuanian Cryptolicense: New Frontier in European Fintech

Lithuania created favourable conditions for fintech businesses. The regulator supports the development of financial technologies and non-banking payment services. 2023 became the year of transformation for the Lithuanian regulation in cryptocurrencies. The Lithuanian Parliament voted for the introduction of new rules which have a significant impact on the industry of cryptocurrency activities in the country and came in force from January 1, 2023.

Lithuania created a new regulation for VASPs in 2023 and currently this state is the closest to future MICA standards

Key Numbers about Cryptolicense in Lithuania

8 weeks

average term of obtaining license

€32,000

initial contribution for share capital

€6,000

registration of the VASP under the minimum regulatory requirements

15%

corporate income tax (CIT) rate

up to 32%

personal income tax (PIT) rate

21%

value added tax (VAT) rate

Legal Opinion about Cryptolicense in Lithuania

Ganna Voievodina

Manimama, CEO

"As CEO of Manimama, I highly recommend obtaining a cryptocurrency license in Lithuania. This is an ideal solution for all players in the market - both start-ups and established enterprises. Lithuania is one of the few countries that are almost ready to implement MiCA, which will save your business from additional actions in the future. For personalized information based on your business profile, do not hesitate to contact us for further cooperation".

Types of Activities with a License

Exchange crypto to crypto: VASPs are authorized to facilitate the exchange of various virtual assets, including utility tokens and coins, ensuring diversified trading options.

Custodial wallet services: VASPs, through custodial wallets, offer a secure means of storing cryptocurrencies on behalf of users, with operators having the ability to open wallets while maintaining control over private keys.

Crypto transfers: VASPs are authorized to facilitate the secure transfer of cryptocurrencies from clients' wallets to designated third-party wallets, presenting an alternative to traditional fiat wire transfers.

Account statements issuing: VASPs have the right to reflect the balance and issue the account and transaction statements.

Exchange crypto to fiat and fiat to crypto: VASPs enable the conversion between cryptocurrency and fiat currencies, offering customers the flexibility to transact in multiple currencies.

Crypto processing and crypto acquiring: VASPs hold the capability to conduct the service allowing merchants to accept crypto as a payment with a consequent transfer of crypto to the merchant or conversion it to fiat.

On-ramp and off-ramp services: VASPs have the wide opportunities for the business development including providing B2B services as on-ramp, off-ramp, white label products which Manimama is ready to help to launch including payment service providers connection.

Token sales: The last but not the least! VASPs are authorized to conduct ICO offering the utility and limited-use e-money token.

Choose the Package of Services

Advanced

Set up of company ready to start cryptocurrency operational activity

€8,000

  • Company formation in Lithuania
  • Registering share capital (€125,000)
  • Registered address for 1 year
  • Individual AML/KYC policies
  • Registration as VASP within commercial registry
  • Registration of VASP activities within FCIS/FNTT
  • Search, integration, direct employment agreement for exclusive, local, experienced AML/KYC officer
  • Opening of the banking account for the share capital (€125,000)
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Basic

Creating the company and registration of VASP

€6,000

  • Company formation in Lithuania
  • Registering share capital (€125,000)
  • Registered address for 1 year
  • Standard AML/KYC policies
  • Registration as VASP within commercial register
  • Registration of VASP activities within FCIS/FNTT
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Step by Step Description

Step 1. Creation of a company

Creation of a company with the opening of a start-up account with a contribution to the authorized capital in the amount of €1,000

Duration: 3 weeks

Step 2. Compliance with requirements of the nominal capital

Opening a second account and assistance for the share capital contribution in the amount of €31,000 or €124,000

Duration: 2 weeks

Step 3. AML/KYC procedural rules

Creation of individual set of documents including AML/CTF procedures, Risk assessment policy, KYC configuration with necessary levels of verification of individuals, legal entities, merchants

Duration: 3 weeks

Step 4. Searching for exclusive AML/KYC employee

Search for an exclusive AML/KYC employee with subsequent integration into the corporate structure; education; tax registration; setting up access to reporting in FNTT / FCIS

Duration: 2 weeks

Step 5. Obtaining the license

Obtaining a VASP authorization and entering the company into the register of Lithuanian cryptocurrency companies

Duration: 4 weeks

Understanding the Lithuanian Requirements

Crypto license is not required, you need only to register in a special crypto register

Cryptocurrency business in Lithuania is regulated as part of the implementation of measures to prevent and detect acts of money laundering derived from or in connection with criminal activities. Currently, cryptocurrency business can operate without a license, but it is necessary to be an AML obligated entity and be authorized to provide virtual asset transactions. The regulating authority is the Financial Crime Investigation Service under The Ministry of the Interior of the Republic of Lithuania.

Requirements for VASP Authorization

A VASP license in Lithuania requires a share capital in the amount of €125,000, exclusive AML officer who is the resident of Lithuania, adherence to AML/KYC regulations

There are several requirements that must be satisfied in order to register a company with the crypto-registry and to obtain a certificate of registration with the crypto-registry in Lithuania:

  • Establish a limited liability company in Lithuania with a minimum share capital of €125,000
  • Company founders need to open a bank account before registering a company
  • Company must have one exclusive AML officer who has a relevant qualification, needs to be the resident of Lithuania and has to speak Lithuanian
  • Company must comply with all applicable AML regulations and approve full set of AML policies individually tailored under the project
  • Company is obliged to report all the transactions equivalent and higher than €15,000 and suspicious transactions to its regulating authority who is FNNT

Taxes in Lithuania

Basic tax rate of the corporate tax is 15% in Lithuania, still the tax rates of 0% and 5% can be also applicable and we know how to do that

Cryptocurrency exchange services are not subject to VAT, in addition, services invoiced (e.g. sales invoices) in virtual assets are subject to regular VAT rules.

Basic tax rate of the corporate tax is 15%.

Tax rate of 5% is applied to profits generated from the commercialization of R&D inventions (i.e. use, sale or other transfer).

Tax rate of 0% is applied to taxable profits of newly established entities for the first taxable period, then further taxed at a rate of 5% for the following tax periods, when certain requirements are fulfilled:

  • average number of employees does not exceed 10
  • income during the tax period does not exceed €300,000
  • shareholders of the entity are only natural persons
  • economic activity of the entity is not suspended, the entity is not liquidated/reorganized, and the entity shares are not transferred to new shareholders for three consecutive tax periods, including the first tax period

Individual tax rates are 20% and 32% and depend on the level of individual income.

Client Feedbacks

"Manimama provides a full range of services: from obtaining a license to connecting all payment methods and exchange accounts, building legal models for all kinds of our ideas. Together we launched OTC, crypto-processing, on-ramp solutions".

"Working with Manimama OU was a smart choice. They made the crypto licensing process in Lithuania straightforward, proving their efficiency and expertise. When the time came for changes, lawyers, as always, warned us and helped to adapt the company to new regulatory requirements".

"Manimama OU made getting our crypto license in Lithuania a breeze. Their efficient and knowledgeable team simplified the process for our crypto exchange".

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