Lithuania Cryptocurrency License

Lithuania Cryptocurrency License

• Tetra Consultants is proficient in assisting our international clients in securing Lithuania cryptocurrency license.  Lithuania, as one of Europe’s premier fintech nations, is rapidly becoming the go-to destination for a wide range of digital services for businesses and key organizations globally. Among those services for clients in a range of industries are the cryptocurrency exchange license and crypto wallet license, which have become a global talking point by providing a legal and secure environment to exchange payments discreetly.

• Since 2020, Lithuania has climbed to the forefront of the list of the most welcoming nations for cryptocurrency businesses. The country has established the required legal framework for conducting cryptocurrency transactions. Such operations are strictly regulated and monitored in order to avoid any indication of money laundering or terrorist financing. However, obtaining permission and engaging in the trading of cryptocurrencies or services for servicing cryptocurrency wallets is quite conceivable. Advance to choosing Lithuania if you want to do business in a transparent manner while nevertheless reaping the rewards.

• Tetra Consultants offers the service of obtaining a cryptocurrency license in Lithuania. Our engagement services include the implementation of all necessary steps for the complete execution and technical assistance of the cryptocurrency business, including registering a company, obtaining necessary permits, and opening a corporate bank account, as well as preparing AML / KYC policies in accordance with regulator requirements and managing accounting requisites,

What are the types of Lithuania cryptocurrency licenses?  

In Lithuania it is possible to obtain two types of licenses for working with virtual currency:

Cryptocurrency exchange license

• The operator of the exchange of cryptographic currency for service providers for the exchange of this currency for money – a company or a department of an enterprise gets the opportunity to change the cryptocurrency, receiving a commission. 

• This is an official license that covers the services of exchanging real money for cryptographic currency and vice versa, as well as crypto for crypto. In addition, this license in Lithuania is issued for the activities of a cryptocurrency exchange.

Cryptocurrency wallet and custodian services license

• This is a license required for those who provide cryptocurrency storage wallets to have. The cryptocurrency wallet service provider creates encrypted keys for customers who can use the service to store, exchange and transfer virtual money.

• A company can hold any or both cryptocurrency exchange and wallet licenses. Whichever license you will be interested in, Tetra Consultants’ team of experienced professionals will help and guide you in applying for any of the aforementioned Lithuania cryptocurrency licenses: cryptocurrency exchange license and/or cryptocurrency wallet and custodian services license.

Why Lithuania for obtaining a cryptocurrency license?

• Lithuania is a highly welcoming jurisdiction that provides optimized circumstances for expanding companies in the sphere of financial technology and virtual assets. Since 2021, Lithuania has had a licensing system for exchanging virtual assets and dealing with cryptocurrency. In contrast to other European nations, acquiring a license in Lithuania is the cheapest and easiest method.

• The Central Bank of Lithuania has a policy of encouraging cryptocurrency and Fintech enterprises to grow. Furthermore, the opportunity to receive required licenses and permissions for activities directly from the Lithuanian regulator strengthens the favorable infrastructure for the growth of financial ventures and start-ups. Since Lithuania has lately become a country with a favorable climate for the growth of bitcoin businesses.

What are the benefits of obtaining a Lithuania cryptocurrency license?

Our team has summarized the benefits of setting up a cryptocurrency business in Lithuania as and getting the respective licenses: 

• Costs are lower than in other major European countries.

• A faster process with licenses takes a matter of weeks. 

• There is an opportunity to register a Lithuanian company remotely.

• The country has a wide range of tax incentives and low corporation tax rates.

• Minimum procedural requirements and bureaucratic burden of the process. 

• Getting a license from Lithuania does not have to be complicated or time-consuming Tetra Consultants can get it completed remotely from anywhere globally.

• Only requires one member of staff to act as the director. It is not mandatory for a company’s director to have Lithuanian citizenship. 

• A company’s KYC/AML officers do not need to go through any type of interview with Lithuanian authorities to get assessed if their qualification/experience is suitable for the respective company. It is a company’s CEO who shall seek that KYC/AML officers and other employees hold sufficient experience.

Who is the regulatory authority for a Lithuania cryptocurrency business?

• The application for a cryptocurrency license is considered by the Bank of Lithuania, regulated by the Financial Crimes Investigation Service (FCIS), and issued by the Business Register. FCIS is an independent structural unit of the Lithuanian Police and Border Police Department.

• The Financial Crimes Investigation Service’s (FCIS) objective is to preserve the public financial system by investigating criminal activities and other breaches of the law.

• The Financial Crimes Investigation Service’s mission is to provide techniques for combatting illicit activity against the public financial system. In pursuit of this goal, FCIS is actively participating in the execution of the National Crime Prevention and Control Programme and the National Anti-Corruption Programme, as well as developing a public relations strategy to engage society in financial crime prevention initiatives. 

• The FCIS advances its goal by effectively implementing measures, detecting and conducting pre-trial investigations and preventing criminal acts, combating money laundering, and ensuring the legality of the receipt and use of financial assistance from the European Union and other countries, by conducting an assessment of their commercial and financial activities and submitting an expert opinion thereon, as well as efforts to ensure that concealed taxes are refunded in order to maximize the effect on actual revenues to be deposited into the State budget.

• At the moment, the FCIS prioritizes the identification, investigation, and prevention of criminal activities including money laundering, VAT embezzlement, and the illicit receipt and use of financial assistance from the European Union and other nations. These illegal activities have a significant impact on the state budget and generate a terrible image of the state.

Which law governs the licensing of cryptocurrency businesses in Lithuania?

• A Lithuanian company may apply for a license for cryptographic activities under the Order on instructions to deposit for virtual currency money monitors and operators for virtual currency exchanges for the prevention of money laundering and/or financing. The purpose of the Law is to prevent the use of Lithuania’s financial system and economic space for money laundering and terrorist financing by increasing the reliability and transparency of the business environment. 

• This law regulates the principles of assessment, management, and hedging of risks related to money laundering and the financing of terrorism, supervision of responsible persons, obligations arising from the collection and publication of data of beneficial owners, obligations related to the collection and publication of data on the holders of payment accounts, liability of the persons liable in case of violation of the requirements arising from the legislation.

What are the activities allowed under a Lithuania cryptocurrency license?

Obtaining any type of Lithuania cryptocurrency license enables an applicant to provide the following type of services: 

• Exchange of cryptocurrency against a fiat currency 
• Exchange of fiat currency against a cryptocurrency 
• Exchange of cryptocurrency against a cryptocurrency 
• Provision of a crypto wallet service
• Provision of client cryptocurrency storage services 
• Make cryptocurrency transfers 
• Provision of full-featured cryptocurrency exchange

What are the regulatory requirements for obtaining a Lithuania cryptocurrency license?

The Lithuanian entities intending to apply for a cryptocurrency license in Lithuania must comply with the below-mentioned minimum regulatory requirements in order to obtain the necessary authorization in the nation: 

Statutory capital for a crypto company in Lithuania

• A legal entity established in the Republic of Lithuania, which intends to operate a virtual currency exchange operator and/or a virtual currency depository wallet operator, must have a registered share capital, which must be at least €125,000 (From 1.11.2022, according to the new legislation, the share capital requirement of a company is €125,000. Previously, the minimum share capital was €2,500).

Local AML officer / MLRO 

• A legal entity that has started operating as a virtual currency exchange operator and/or virtual currency deposit wallet operator must have an AML Specialist or MRLO who is a permanent resident of Lithuania.

Providing services in the Lithuanian market

• A virtual currency exchanger and/or virtual currency depository wallet operator must not provide its services exclusively to customers from another country or focus on providing services in another country’s market to the extent that its activities in the Republic of Lithuania could be considered formal and immaterial based on the company’s business model.

Requirements for company members

• At least one owner (natural or legal person). There are currently no restrictions on the nationality or residence of members of the company.
• At least one board member (may be the same owner). No restrictions on citizenship or residence. 

AML/CFT policies and internal and external control measures

• In order to prevent money laundering and financing of criminal purposes, the activities of a crypto company must comply with strict regulations. First of all, we are talking about the implementation of policies and procedures for internal control, and risk assessment of the company’s activities based on the requirements of the regulator. It also provides for external control by the relevant authorized bodies. Among the main areas of internal and external control:

• Ensuring mandatory implementation of due diligence measures that is identification and verification of all potential customers in accordance with AML / KYC rules, as well as verification of individual transactions of current customers in case of exceeding the established limit of €15,000 or an equivalent amount in another currency, or presence of other signaling criteria.

• Storing customer information with the ability to transfer to the regulatory authority upon request.

• Ensuring regular submission of reports to FCIS, as well as prompt provision of answers to current inquiries regarding the company’s activities.

• Ensuring financial monitoring and suspension of suspicious transactions.

• Appointment of local employees for the position of AML/ MLRO Compliance Officer, who should be responsible for the implementation of the AML/CFT policy. 

• Regularly conducting a comprehensive audit of financial activities with timely identification of threats, risks, and vulnerabilities.

• Submission of reports to the regulator and provision of information on individual requests.

What are the documents required for obtaining a Lithuania cryptocurrency license?

Application for a cryptocurrency license in Lithuania will require the following:

• Apostille copies of the passports of all the directors, shareholders, and beneficiaries.

• CV of all directors, shareholders, and beneficiaries.

• Proof of no criminal record is to be provided by the members of the board to show a good business reputation. 

• Proof of no criminal record is to be provided by the AML officers to show a good business reputation and additionally provide supporting documentation regarding relevant education, skills, and prior experience in this field. 

• Procedural rules, KYC/AML procedures, and business plan. 

• Company formation documents including the articles of incorporation, incorporation certificate, and other corporate documents of the entity. 

• And such other documents as may be required by the authority. 

What is the procedure to obtain a Lithuania cryptocurrency license?

• Tetra Consultants is ready to provide you with excellent solutions for cryptocurrency exchange and wallet licenses, including the possibility to process cryptocurrency license applications remotely, with no physical presence required in Lithuania. Our team of professional consultants will take care of all procedures on your behalf but it is always recommended to be thorough with the steps to be taken to obtain the cryptocurrency license in Lithuania. 

• Our team of experts has summarized the prevalent steps normally undertaken during the engagement process of obtaining the Lithuania cryptocurrency license from the respective authorities. 

Step 1: Formation of a legal entity in Lithuania

• To start with the procedure for acquiring a cryptocurrency license in Lithuania, you need to have a legal entity registered in the country. But before moving forward with the procedure of registering a company Tetra Consultants’ team of experts will first understand your business needs and goals. 

• Once understood, Tetra Consultants will suggest the best-suited form of business entity for your cryptocurrency business in Lithuania. A Lithuanian Private Limited liability company (UAB) is the most popular form of entity for cryptocurrency business in the country.  

• At this stage of engagement, Tetra Consultants will need you to provide necessary KYC documents of the prospective directors and members of the company for internal due diligence. Once the documents are provided, we will send a power of attorney to be signed to enable us to carry on the procedure on your behalf. 

Step 2: Reserving the company name 

• Next, you will have to pick your preferred name for your company. Tetra Consultants will then reserve this with the Lithuania Register of Legal Entities, through the application form JAR-5. 

• The name can be held for up to half a year.

Step 3: Preparation of the necessary documents required for company registration 

• We will then proceed to assist you with preparing the documents needed for incorporation, including the Article of Incorporation, Business Plan, Company Constitution, and personal information of directors and shareholders. Generally, the Articles of Association will have to be translated into the Lithuanian language. As such, we will appoint a reputable translator to do so.

• Tetra Consultants will then assist you to carry out the notarization of the founding documents at the office of a registered notary, which is necessary before submitting them for official incorporation.

• Since for Lithuanian company registration, there is a requirement for companies to have a registered office (Virtual or Physical) in the country, Tetra Consultants will provide you with the same for furthering the incorporation process of your Lithuanian company. 

Step 4: Filing for registration with the Lithuania Register of Legal Entities

• After the above steps have been completed, Tetra Consultants will then submit the necessary incorporation documents to the Lithuania Register of Legal Entities for processing and approval. 

• After receiving approval, Tetra Consultants will courier the Certificate of Incorporation, Memorandum and Articles of Association, and other corporate documents to your preferred address.

• We will also assist in translating the incorporation documents into English so that you can review and verify the documents.

Step 5: Corporate bank account opening

• For companies applying for a cryptocurrency license in Lithuania, an account with a financial institution registered in Lithuania (one of the Lithuanian banks or the Electronic Money Institution registered in Lithuania) must be opened for a company applying for a cryptocurrency license. The company’s authorized capital must be deposited into this account.

• Simultaneously with the Lithuania company registration, Tetra Consultants will proceed to open a crypto-friendly corporate bank account company within 4 weeks with reputable local banks in Lithuania. Some of the international reputable banks we work with include Citadele Bank, Danske Bank, and Nordea Bank. By engaging our services, you can leverage our full portfolio of banking partners.

• Upon the successful corporate bank account opening process and securing a crypto-friendly bank account for your entity, we will be able to inject the minimum capital required of €125,000 for the final approval of the cryptocurrency license application at a later stage. 

Step 6: Preparation and submission of relevant documents for license application

• Tetra Consultants will then proceed with the application for your company’s cryptocurrency license. You will be required to send us documents such as passport, proof of address, CVs, and non-criminal records of individual directors, shareholders, and Ultimate Beneficial Owners, as well as a copy of the certificate of incorporation, and a copy of the Memorandum and Articles of Association of a corporate shareholder.

• Our team of experts will prepare the required AML/CFT procedures and company internal regulations for handling cryptocurrencies.

Step 7: Meeting local economic substance requirements

• To obtain a cryptocurrency license in Lithuania and start the cryptocurrency business in the country, FCIS, the regulatory body requires you to have economic substance in the form of having an AML/CFT Compliance Officer, Tetra Consultants will assist you in meeting them. Our team will assist with the recruitment of local qualified employees to join the team.

• Tetra Consultants’ HR team will undertake candidate shortlisting and preliminary interviews for respective employees, including the compliance officer. Following that, you can narrow down the final list of prospects to choose who is best suited to join the team. Tetra Consultants will assist in the preparation of an employment contract with the agreed terms once the candidate has been selected.

• Tetra Consultants team will also train such employees in customer identification requirements under the Law on Prevention of Money Laundering and Financing of Terrorism. It should be noted that the selected employee will be a member of your company only, which is in accordance with the non-competitive clause, and will represent it with the regulator.

Step 8: Submission of license application 

• Once the above is completed, Tetra Consultants will submit the application to the local regulator. Depending on the jurisdiction, you may be required to attend an interview with the regulator prior to license approval. In this case, Tetra Consultants will prepare you for the interview and assist with the follow-up actions required by regulatory authorities.

• All going well, your firm will receive the cryptocurrency license in Lithuania and will be required to start business operations within the stipulated time frame to maintain the license.

What is the tax implication of starting a cryptocurrency business and obtaining a Lithuania cryptocurrency license?

The taxation of cryptocurrency companies in Lithuania is similar to that of ordinary companies registered in Lithuania. Some key points to note are:

• As with ordinary UABs in Lithuania, a cryptocurrency company must pay a corporate tax rate of 15% on profits. A “micro company” with under 10 employees with a gross annual income of €300,000 is taxed at a reduced corporate tax rate of between 0% and 5%.

• Cryptocurrency exchange services are not liable for VAT; however, services that are provided and accounts that are paid in cryptocurrencies are subject to normal VAT.

Additional Information On Lithuania Cryptocurrency 

The FCIS has set out additional provisions related to cryptocurrency license application procedures and operation as a cryptocurrency custodian and/or exchange. In particular:

• The FCIS has the right to request any additional information during the licensing process, including further details about the intended crypto-related activities of the company. 

• The company is not guaranteed to be successful in its application for a crypto license. The license is only provided after all the documentation requirements have been fulfilled and the information is deemed to be complete and sufficient. 

• Any later changes in the company structure which were originally detailed in the crypto license application (e.g., company address, details about board members, AML officer, ownership, etc.) must be filed with the local registrar.

• In addition to the regulation set forth by the FCIS on cryptocurrency operations, crypto companies are also regulated by the Law on the Prevention of Money Laundering and Financing of Terrorism.

• Cryptocurrency companies do not have any special additional reporting requirements. Annual reporting of accounts and finances is completed according to the same requirements of an ordinary Lithuanian company.

• Cryptocurrency companies must maintain the required AML/KYC data of their clients. This information must be kept on record and is only required for filing to the regulator if requested. 

How much time does it take to obtain a Lithuania cryptocurrency license?

• The standard time taken by Tetra Consultants to register a company in Lithuania and open a corporate account is typically around 6 weeks. While the approval of the application for a Lithuania cryptocurrency license by the Lithuanian Financial Authority takes approximately 4 to 5 weeks (depending on the sufficiency of the application and ancillary documents provided). 

• Prior to the start of the engagement, Tetra Consultants will send you a project plan with the timelines stipulated for company registration, preparation of documents as well as license application. This is to ensure that all parties are clear on the upcoming project.

Our services 

• Tetra Consultants provides comprehensive corporate services under one roof, allowing clients to plan and prioritize their chosen business strategy to expand their business and obtain cryptocurrency licenses in Countries like Lithuania in a very short time and with limited resources. We offer a wide range of services, including consultancy, legal services, and company formation, which focus on the optimal implementation of business strategies.

• You will receive legal and management consultancy services of the highest caliber, thanks to the many years of experience of our highly qualified professionals. Each client receives comprehensive assistance with business development and support. Every task is tailored to the client’s needs, the specifics of the business, and the legislation of the particular country.

• In addition, Tetra Consultants can also assist with attaining other offshore financial licenses depending on your long-term business goals.

Find out more!

Contact us to find out more about how to get a Lithuania cryptocurrency license. Our team of experts will revert within the next 24 hours.

FAQs

Do I need a resident director to get the Lithuanian crypto license?

Do I need a resident director to get the Lithuanian crypto license?

Do I need a physical office to successfully obtain the Lithuanian cryptocurrency license?

What are the KYC and AML requirements for the Lithuanian crypto license?

Does my Lithuanian crypto company need an AML officer to operate?

How do I get a crypto license in Lithuania?

Can non-residents of Lithuania own a cryptocurrency company?

Can non-residents of Lithuania be part of the board of a Lithuanian crypto company?