Bank of Lithuania promises fastest financial institution licence response for FinTech companies in EU
The Central Bank of Lithuania has made an unprecedented promise to FinTech companies by announcing it will provide preliminary answers to financial institution licence enquiries within one week, the fastest turnaround in the EU. The programme, which was named Newcomer, will apply to companies that are already licensed in another EU country and would like to move their place of residence to Lithuania. The full authorisation will be issued 2–6 months later (depending on the type of licence). The commitment, announced by a Member of the Board of the Bank of Lithuania, was made during a visit to London, where the Bank of Lithuania is currently promoting Lithuania as an investment location for British-based FinTech companies in the wake of the Brexit referendum vote.
Marius Jurgilas, a Board Member at the Bank of Lithuania, explained that this latest commitment is part of a substantial overhaul of financial services legislation designed to make Lithuania a hub for FinTech in Europe. “With a view to providing favourable conditions for FinTech companies that are considering setting up in Lithuania, we have made a number of improvements to the system which will be felt by companies from the very start,” Mr Jurgilas said. “We, the Bank of Lithuania, can ensure that a company which is licensed in another country and wishes to set up in Lithuania can expect to receive a preliminary response with regard to a licence in Lithuania within a week.”
A range of other advantages are also on offer to FinTech companies choosing to set up in Lithuania. Payment and electronic money agencies in Lithuania can access the Single Euro Payment Area (SEPA) through the infrastructure of the Bank of Lithuania, enabling them to avoid the broking services of many commercial banks. Moreover, the Bank of Lithuania treats providers of payment services as financial institutions, and will allocate them a code which generates accounts in the IBAN format by no later than the next business day.
These reforms, and the support of other state institutions, all go to show that Lithuania is open for business in the FinTech sector, says Mr Jurgilas. “By providing favourable conditions, we aim to make Lithuania the most attractive country in the region for FinTech companies. And we are delighted that our goal is being supported by the positive attitude of the public sector towards new technology-based business and its support,” he said. “Companies which intend to set up in Lithuania will also receive full assistance from the team at Invest Lithuania, and the central bank will help these companies and consult them on the preparation of the documents required for a license.”
“For FinTech, Lithuania has all the essential qualities: fast, robust IT and banking infrastructure, a wealth of experienced talent, plus great quality of life at a really affordable cost. Moreover, more and more spaces are opening up in Vilnius offering a complete range of services for FinTech companies, from infrastructure and service packages to advice on starting and growing your business, all in a single location,” says Mantas Katinas, General Manager of Invest Lithuania.
The Bank of Lithuania has already received significant interest from FinTech companies across the globe. According to the Bank, three companies will establish operations in Lithuania in the near future: the UK FinTech start-up Revolut, the Chinese international settlement company International Business Settlement, and Moneta International a payment platform developer established by Israeli investors. Contis Group, an alternative banking and payment solutions company, is planning to transfer its operational service centre to Lithuania and then expand it. After the UK’s referendum vote to withdraw from the EU, a number of British FinTech companies are showing considerable interest in Lithuania and the opportunities for relocation it has to offer.
The bank also has confirmed that other companies from a wide range of countries, including Singapore, Switzerland, United Arab Emirates, Israel, Latvia, Estonia, and the Philippines, are currently considering Lithuania as an investment location.