Crypto License in Lithuania

CRYPTOCURRENCY LICENCE IN LITHUANIA

At the moment, Lithuania is one of the few member states of the European Union where legal financial transactions with cryptocurrency are possible and there is an official permission to conduct and regulate crypto business from the state. Widely recognized in the traditional financial sector (FIAT) and in the licensing of electronic money, the Lithuanian government also offers virtual currency permission.

There are two types of virtual currency licenses available in Lithuania:

Cryptocurrency exchange license (cryptocurrency exchange licence). A company with such a licence is able to exchange digital currency for capital or vice versa, or cryptocurrency for another cryptocurrency, receiving a fee for the services provided.

Crypto Wallet and Custodian License (Crypto Wallet and Custodian Licence). A licensed company can manage client wallets to store cryptocurrency, including the generation and storage of encrypted client keys.

Lithuania crypto license

General regulations

During the procedure, the authority can demand more data and an in-depth description of the activities of the cryptographic company. A licence can be given just after all the data is gathered and is indeed full, therefore all conditions have been fulfilled.

Amendments in the structure of a virtual firm after obtaining a license (address of the owner, member of the board, beneficiary, employee AML) requires marking it in the system with a full portfolio of documents.

The form for the cryptocurrency license is considered and controlled by the FCIS and provided by the Lithuanian Business Register. FCIS is a unique branch of the Lithuanian Police and Border Police Department. Read more about the rules of cryptography in Lithuania.

Virtual currency businesses are governed by the Law on the Prevention of Money Laundering and Financing of Terrorism, notably Order V-5 of January 2020.

LICENSING PROCEDURE

To get a virtual currency permit license, a limited liability company (UAB) needs to be based in Lithuania to offer virtual currency exchange or cloud services. The authorized capital of the company is not less than 2500 euros. The creation of a crypto company could be completely remote, with no intentional visit to Lithuania by proxy or using the electronic card of the resident of Lithuania.

The minimum requirement for the cryptocurrency structure of a company is one member, which can be both owner and member of the board. He is also an employee of the cryptographic company AML.

The officer/official responsible for combating money laundering and financing of terrorism must have some industry experience and a perfect reputation (residence in Lithuania is not required).

The permitted business should conduct an in-depth review of every visitor and transfers according to AML/KYC rules. The FCIS supervisory authority may make inquiries regarding the transactions, in particular those connected with the AML/KYC rules.

Crypto regulation in Lithuania

Period for consideration
up to 1 month Annual fee for supervision No
State fee for application
No Local staff member Required
Required share capital 125,000 € Physical office No
Corporate income tax 5 – 15% Accounting audit No

Requirements for the company

The following requirements are imposed on companies providing services in the cryptocurrency sector:

  • All clients must undergo identity checks and identification procedures;
  • Customer data should be stored with the possibility of being made available to the regulator;
  • The company should have internal control and risk assessment procedures;
  • Having a KYC/AML compliance officer
  • Reporting to the regulator (Financial Crimes Investigation Service).

Board members as well as owners of the company must meet the requirements of impeccable reputation and have no criminal record.

There is no need for owners or board members of a crypto company to be physically present in Lithuania so that foreigners/non-residents of Lithuania can legally engage in crypto activities while in their country.

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

Apostille copies of passports of all project participants

CV of all project participants

Virtual or physical office, not territory of Lithuania

Board should have a good business reputation (no criminal record)

AML officer must prove a good business reputation with no criminal record, and provide supporting documentation regarding relevant education, skills and prior experience in this field

AML officer can be replaced by a third-party KYC/AML supplier with whom a cooperation agreement has been concluded

There are no restrictions by country of residence of owners/board members if AML is a private person.

Procedural Rules, KYC/AML Procedures and Business Plan

Advantages

Fast project implementation time

Possibility to purchase an off-the-shelf solution

Possibility of a fully remote solution

No obligation to have an office

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. There are currently no restrictions on the nationality or residence of members of the company.
  • AML compliance officer (may be the same owner). No restrictions on citizenship or residence. Professional experience and compliance with FCIS requirements is mandatory.
  • The company has an office. The use of a virtual office is permitted.
  • The data of all beneficial owners (UBO) must be provided upon application.

Necessary documents

The following documentation will be required to review and prepare an application for a cryptocurrency license:

  • Valid copy of passport from home country
  • Power of attorney (PoA) (if the process of opening a company and obtaining a license takes place remotely)
  • Company business model/detailed activity description
  • CV/Summary of experience and education of all participants in the crypto license project
  • Website address where cryptocurrency services will be offered
  • Certificate of criminal record from the criminal record (not more than 3 months) for owners, board members, final beneficiaries (UBO) and AML officers

Reporting requirements

The cryptocurrency company has no special reporting requirements to the tax authorities. Accounting must be provided in the same way as for any other Lithuanian company. No special reporting to the regulator is required, but FCIS is always able to make prescriptions and requests about the activities of the crypto company. The basic requirement of the FCIS is to comply with AML/KYC requirements, such as the collection of client data from a crypto project and the possibility of making them available to the regulator on demand.

TAXATION OF VIRTUAL CURRENCY COMPANIES IN LITHUANIA

  • Crypto exchange services are not obliged by VAT.
  • Offers connected to cryptocurrencies are obliged by VAT
  • Cryptocurrency benefits are subject to taxation of 15%. A small business that has 10 or even less employees and a turnover of 300,000 euros and less is taxed of 0-5%.
  • Profit tax of 15% is applicable on income where the dividends are paid.

Taxes on activities connected with crypto vary on the idea of the activity. They do not have a specific tax whether the token was exchanged or obtained likely to security, nesting or another currency.

COST OF CRYPTOCURRENCY LICENSE

PACKAGE «COMPANY & CRYPTO License IN LITHUANIA»

14,900 EUR
PACKAGE «COMPANY & CRYPTO LICENSE IN LITHUANIA» INCLUDES:
  • Establishment or purchase of a ready-made company
  • Assistance in registration of share capital (EUR 125,000)
  • Preparation of legal company documents
  • Assistance in director employment/KYC/AML officer and information State Social Insurance Fund
  • Lease of legal address at Vilnius Business Centre for 1 year
  • Review of the business model and the structure of the Cryptocurrency Company
  • Assistance in opening a bank account for cryptocurrency companies
  • Procedural Rules and KYC/AML Company Procedures
  • Preparation of notifications, forms and supporting documents for submission to FCIS and Business Regests of Lithuania
  • Paying company registration government fees
  • Paying government crypto license fees
  • General counselling (5 hours)

*establishment of the company and receipt of the cryptocurrency licence is possible to implement completely remotely, without visiting Lithuania.

FREQUENTLY ASKED QUESTIONS

  • Does Lithuania grant a licence for crypto activities?
    Yes. Lithuania grants two types of crypto licences depending on the activities that the applicant intends to carry out:
    • Cryptocurrency storage wallet licence (Crypto Wallet Exchange)
    • Licence for cryptocurrency exchange (Crypto Exchange Licence)
  • How do I get a crypto license in Lithuania?
    To successfully obtain a crypto licence in Lithuania, applicants must fulfil the following requirements:
    • Establish and register a company in Lithuania
    • The company must have at least 1 employee
    • One of the employees must be a security expert with good knowledge of relevant regulations and KYC requirements
    • The company must have a registered address in Lithuania
    • The company must establish a reliable KYC procedure
    • The company must provide regular activity and security reports to the supervisory body
  • Is it necessary to contact the local tax authority in crypto activities on behalf of a Lithuanian company?
    Yes. Crypto companies are subject to corporate and other taxes. In order to report their income and pay the taxes, they must contact the State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania.
  • What are the activities of the crypto license in Lithuania?
    Authorised holders of Cryptocurrency storage wallet licence may issue encrypted client keys to their customers and store custodial wallets on their behalf. Authorised holders of Crypto exchange licence may provide exchange services between virtual currencies and fiat currencies for a fee. They may also exchange one virtual currency for another. If a virtual asset service provider is intending to provide services related to both types of crypto licence in Lithuania, the applicant may obtain both licences.
  • How long does it take to get a license?
    The entire process of obtaining a crypto licence in Lithuania can be completed in 30 days. In case of missing documents or other delays, the process may take longer.
  • Can non-residents of Lithuania own a crypto company?
    Yes. It is possible to set up a crypto company via a notary while visiting Lithuania for a limited amount of time, or complete the process entirely remotely. To do so, however, there must be a trustee located in Lithuania who would act on behalf of the founder.
  • Can non-residents of Lithuania be part of the board of a Lithuanian crypto company?
    Yes.
  • Is it necessary to have a banking account to obtain a licence?
    No. A bank account can be opened when the license has already been obtained.
  • What is the minimum authorized capital for a virtual currency service provider?
    The minimum authorized capital for a virtual currency service provider is 2500 Euro.
  • For how long is a crypto-license issued?
    Cryptocurrency license in Lithuania is issued for an indefinite period
  • Is it possible to deposit authorized capital in cryptocurrency?
    No, but some financial service providers are developing a more flexible policy towards crypto payments. This option might be introduced in the future.
  • How is the charter capital of a crypto company paid in?
    Applicants are requested to deposit authorized capital in Euros (EUR).
  • When do you need to deposit capital to open a company and obtain a crypto-license in Lithuania?
    Depositing minimum authorized capital is a step that every applicant must complete in the process of establishing a company in Lithuania. Without completing this step, the applicant will not be able to register a company with the local authorities.
  • Why you should get a crypto license in Lithuania?
    Yes Lithuania is very quick to implement technical developments, this country offers excellent conditions to those who want to establish a company and obtain a crypto licence here. These are some of the main advantages:
    • The entire process can be completed on a remote basis
    • Low minimum authorized capital
    • The process is straightforward and can be completed in just 30 days
    • Corporate tax rate is 15 percent – lower than in many other markets in the EU.
  • Are Lithuania cryptocurrency companies audited?
    Yes. Owners of both types of crypto licences are under the supervision of the Lithuanian Financial Crime Investigation Service (FCIS).
  • Can the director of a crypto company be a non-resident of Lithuania?
    Yes.
  • What measures to prevent money-laundering and the financing of terrorism are in place in Lithuania?
    Every crypto company must employ a security expert who would make sure that internal processes run smoothly and all relevant regulations are followed. Furthermore, all crypto companies in Lithuania are supervised and audited by the Lithuanian Financial Crime Investigation Service (FCIS).
  • What difficulties may arise in obtaining a crypto license in Lithuania?
    To establish a company in Lithuania on a remote basis, non-residents must find and appoint a trustee who would act on their behalf. Alternatively, non-residents must be present in the country to do it themselves and find a notary who will guide them through the process.
  • Where can I open a bank account for a Lithuania crypto company?
    According to a recent change, those who want to establish a company in Lithuania are no longer restricted to local banks. Companies can also open accounts in credit unions and digital banks. A full list of banks and financial institutions that companies can open accounts in is compiled and updated by the Bank of Lithuania.

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julia

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jekaterina

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CORPORATE LAWYER

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Ella

LEGAL ADVISOR

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Company Formation Executive

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Scherbakova

Company Formation Executive

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Kreida

Accountant

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Accountant

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CONTACT US

At the moment, the main services of our company are legal and compliance solutions for FinTech projects. Our offices are located in Tallinn, Vilnius, and Warsaw. The legal team can assist with legal analysis, project structuring, and legal regulation.

Company in Estonia OÜ

Registration number: 14153440
Anno: 16.11.2016
Licence number: FIU000186
Phone: + 372 5611 0164
Email: [email protected]
Address: Sepise 1, Tallinn, 11415, Estonia

Company in Lithuania UAB

Registration number: 304377400
Anno: 30.08.2016
Phone: +370 661 75988
Email: [email protected]
Address: Lvovo g. 25 – 702, 7th floor, Vilnius, 09320, Lithuania

Company in Poland Sp. z o.o

Registration number: 38421992700000
Anno: 28.08.2019
Phone: +48 50 633 5087
Email: [email protected]
Address: Twarda 18, 15th floor, Warsaw, 00-824, Poland

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