Cryptocurrency exchange license in Lithuania

Lithuania has created very favorable conditions for launching a crypto business. Government, including regulatory authorities, the development of fintech start-ups. The procedure for obtaining licenses in Lithuania has been simplified, which had a positive effect on the inflow of investments into the industry.

Review of applicable legislation

The regulatory regime is determined by the nature of the crypto assets involved. Transactions involving assets that do not provide the right to vote and profit, but are related to access to a product or service, are governed by general provisions of civil law. Asset transactions that provide voting and profit rights or are used as payment instruments are governed by securities regulations, collective investment schemes, and banking laws. All transactions, regardless of their nature, are subject to anti-money laundering regulations.

Regulation of crypto license in Lithuania

The companies operating in the cryptocurrency market are subject to the following requirements:

  • all customers must go through a verification and identification procedure;
  • records and accounting of customer data should be kept;
  • introduction of internal control procedures is mandatory;
  • an officer must be appointed to ensure compliance with the Anti-Money Laundering Policy (AML Policy);
  • reporting to the FCIS of Lithuania (Financial Crime Investigation Service) is mandatory.

Requirements for applicant

The best option for starting a crypto business in this jurisdiction is to register a limited liability company. You must follow basic requirements to do that:

  • form a share capital of 2,500 euros;
  • establishing a position that has the power to enforce anti-money laundering and anti-terrorist financing policies;
  • at least 1 participant who can combine the positions of a shareholder, director, and compliance manager (subject to relevant experience).

In this case, the liability of shareholders is limited to the number of funds invested. Company registration can be carried out within 10 working days. A remote registration option is possible. It is recommended to outsource the compliance function.

Brief description of the procedure for registering a legal entity

The procedure for opening a company is simple and covers the following steps:

  1. Company business model/detailed activity description.
  2. Information about shareholders, beneficiaries, and managers.
  3. Obtaining a confirmed electronic signature.
  4. Checking and reserving the name of the limited liability company.
  5. Obtaining a business address.
  6. Development and execution of constituent documents and accompanying registration forms.
  7. Opening a bank account to pay 25% + share capital.
  8. Submission of documents for state registration.
  9. Registering the company for taxation and employment purposes.
  10. Opening a settlement bank account.

Basic documents and information

To open a company and obtain a crypto license in Lithuania, applicants must:

  • CV/Summary of experience and education of all participants in the crypto-related project;
  • data confirming the proper reputation of the board members;
  • financial documents and history Business plan/financial history;
  • certificate of a criminal record for owners, board members, final beneficiaries, AML officers.

For detailed advice on the necessary documents, please contact the specialists.

Procedures need to be taken

Compliance for a crypto license holding company in Lithuania means:

  1. Formation of requirements and policies, defining:
    • types of risk transactions and modalities of their execution;
    • high-risk transactions and modalities of their conducting
    • due diligence;
    • requirements for submitting information and documents by applicants;
    • recording and reporting requirements.
  2. Implementation of internal security measures:
    • assessment and risk management of money-laundering and terrorist financing;
    • collection and storage of information;
    • implementation of obligations of notification in cases stipulated by the legislation.
  3. The checks carried out mainly concern the persons involved to understand if each such person is:
    • an entity on which international sanctions have been imposed;
    • politically exposed person;
    • resident in a jurisdiction that lacks appropriate anti-money laundering regulations and measures;
    • an entity previously suspected of money laundering and terrorist financing.

The compliance manager, inter alia, should:

  • organize the collection and analysis of information on suspicious transactions;
  • periodically submit reports to the relevant regulator;
  • inform the supervisory authority about cases of suspicious transactions.

More information about the nuances of compliance for your specific case you can get from the specialists.

After obtaining a cryptocurrency license, a holder will be entitled to carry out these types of transactions:

  • exchange fiat to virtual currency and vice versa;
  • exchange operations with the involvement of different cryptocurrency types;
  • virtual currency storage;
  • storage of fiat currencies for a stipulated period of time for the next cryptocurrency purchase using such fiat money;
  • transfer operations between wallets carried out in cryptos.

Taxation

Implemented through general provisions of the legislation. Corporate profits are taxed at 15%. Withholding tax 15% is charged on gross dividends. The nuances are determined by the nature of the transactions and the type of assets involved. Our experts will be happy to advise you and explain the details.

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