Cryptolicense in Lithuania: Your Golden Ticket in the World of Cryptocurrency

In the heart of Europe, Lithuania stands as a beacon of innovation and progress in the realm of blockchain and cryptocurrency. Cryptocurrency license in Lithuania is a regulatory mechanism designed to provide legal clarity and oversight for businesses operating in the digital asset and blockchain sectors. Companies that obtain the license in Lithuania have access to a favorable ecosystem that promotes compliance, transparency and trust, thus positioning the country as a crucial player in the worldwide fintech landscape.

Make your path to getting a Lithuanian cryptolicense much easier and more efficient with the help of Manimama!

What are the benefits of getting a cryptolicense in Lithuania?

We have to note that obtaining a cryptolicense in Lithuania offers several significant benefits:

Fintech hub: The status of Lithuania as a fintech hub gives opportunities for networking, access to talents and co-operation with other innovative companies in the field.

Legislative clarity: A cryptolicense provides clear compliance and regulatory oversight, ensuring that legal requirements in the cryptocurrency and blockchain sector are met.

Entry into the market: Having the license gives companies access to the European Union market, utilizing Lithuania's EU membership to conduct seamless cross-border transactions.

Increased investor confidence: The presence of a cryptocurrency license builds investor trust by demonstrating a commitment to compliance and openness in order to attract potential investors and partners.

International recognition: The Lithuanian cryptolicense is globally recognised, facilitating international partnerships and business opportunities outside the EU market.

Ease of Doing Business: The process of obtaining a cryptocurrency license in Lithuania is relatively streamlined and efficient, with supportive regulatory authorities facilitating the licensing procedure.

Access to Banking Services: Licensed cryptocurrency businesses in Lithuania may find it easier to access banking services, which can be challenging in some other jurisdictions due to regulatory uncertainty and risk aversion among banks.

What types of activities are included in VASP services?

Virtual currency depository wallet operator (“DVCWO”) (Clause 3-2 of Article 2 of the LRPPTFPJ) - a legal person who is established in the Republic of Lithuania or a branch, established in the Republic of Lithuania, of a legal person of a Member State of the European Union or a foreign state and who provides services of management of custodian virtual currency wallets on behalf of the customers.?

Virtual currency exchange operator (“VCEO”) (Clause 22-4 Article 2 of the LRPPTFPJ) - a legal person who is established in the Republic of Lithuania or who is a branch, established in the Republic of Lithuania, of a legal person of a Member State of the European Union or a foreign state and who provides services of virtual currency exchange, purchase and/or sale for remuneration.

How can you obtain a cryptolicense?

In Lithuania, cryptocurrency business 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.

As stated in Law of the Republic of Lithuania on Prevention of Money Laundering and Terrorist Financing, these types of activities are conducted under authorisation: depository virtual currency wallet operator and virtual currency exchange operator.

If we talk about the actions that need to be taken to obtain a license, they are as follows:

1. To start operating as a VASP in Lithuania, a legal entity must be established.?

2. The activities of virtual currency exchange operators and/or virtual currency wallet depositories are not licensed in Lithuania, but there are mandatory requirements stipulated in Article 25 of the Law.?

3. In order to legally operate as a VASP in Lithuania, it is necessary to notify the head of the Register of Legal Entities no later than 5 working days from the commencement or termination of such activity. By providing this information, VASPs must confirm that they, members of their management or supervisory bodies and beneficiaries are familiarised with and comply with the legislation on prevention of money laundering and terrorist financing (request and notification form available here). The name of the form is "Apie vykdom?/nutraukt? patikos, bendrovi? steigimo ir administravimo paslaug? teik?jo, virtuali?j? valiut? keityklos operatoriaus ar depozitini? virtuali?j? valiut? pinigini? operatoriaus veikl?".?

Requirements stipulated in Article 25 of the Law:?

1. A legal entity that has started VASP activities must have a senior manager who is a permanent resident of Lithuania, as stipulated in the Lithuanian Law on Personal Income Tax.?
2. A legal entity established in Lithuania, the legal form of which is a public limited liability company or a private limited liability company intending to carry out VASP activities, must have a registered share capital of at least EUR 125,000. A legal entity of another legal form established in Lithuania or a branch of a legal entity of an EU Member State or a foreign country intending to carry out VASP activities must have a guarantee or a guarantee document issued by an insurance company in the amount of at least EUR 100,000 for one customer's claim for damages and EUR 500,000 for all customer's claims for damages.?
3. VASPs must appoint senior staff to organize the implementation of measures to prevent money laundering and/or terrorist financing to liaise with FCIS. If VASPs are chaired by a board, they must appoint a board member and senior staff for this purpose. FCIS must be notified in writing of the appointment or replacement of such staff and board members no later than 7 working days from the date of their appointment or replacement. The management personnel of a VASP shall not represent more than one VASP at the same time.?
4. A VASP must not perform activities or provide services in another state to the extent that only non-essential functions or services will remain in Lithuania according to the nature of their activities and will be performed or provided exclusively to clients of another state or in principle they will no longer perform activities in Lithuania.?
5. A natural person may not be a member of the management and supervisory bodies or a beneficiary of a VASP if that person has a criminal record for certain offenses.?
6. VASPs are prohibited from opening anonymous accounts or accounts in knowingly fictitious names.?
7. VASPs must establish an internal control system and report unusual and suspicious transactions to FCIS.

Upon completion of the above steps, you will be entered in the registry of Lithuanian cryptocurrency companies.

Authorization of VASP from another EU-member state to provide services in the jurisdiction

A VASP registered in an EU Member State may carry out its activities in Lithuania only through a branch of such a legal entity established in Lithuania. All requirements stipulated for local VASPs (in the previous section) also apply to branches. A branch of a VASP is also obliged to notify the head of the Register of Legal Entities in the same form not later than 5 working days from the moment of commencement or termination of such activities.

Rules for the VASP from another EU -member state to advertise the VASP services

Lithuania does not have a special law on the rules of advertising cryptocurrency services. The advertising activity is regulated by the Law on Advertising of the Republic of Lithuania "Lietuvos Respublikos reklamos ?statymas" and the Law of the Republic of Lithuania on the Prohibition of Unfair Commercial Practices for Consumers "Lietuvos Respublikos nes??iningos komercin?s veiklos vartotojams draudimo ?statymas".?

According to the Law, advertising is information disseminated in any form and by any means in connection with a person's commercial, financial or professional activities, which encourages the purchase of goods or services, including the purchase of real estate and the transfer of property rights and obligations (Article 2). An advertiser is a person on whose initiative and in whose interests advertising is used (ordered, produced, distributed). Advertising Services Provider - a citizen of the Republic of Lithuania, another Member State of the European Union or a state of the European Economic Area (hereinafter referred to as a Member State), another natural person exercising the right of movement in the Member States granted to him/her by the legislation of the European Union, a legal entity established in the Republic of Lithuania or a legal entity established in another Member State, another organisation or their branches, a branch of a foreign legal entity or another organisation established in the Republic of Lithuania, or another organisation established in the Republic of Lithuania. The use of misleading advertising is prohibited. Comparative advertising is permitted subject to the requirements set forth in the Law. Advertising shall be clearly identified by the form of its presentation. If there is a possibility that consumers of advertising in mass media will not be able to recognise the advertising due to the form of its presentation, such advertising shall be marked with the word "Advertising".?

Advertising in any form and using any means of communication is prohibited if its purpose is:?

1) activities prohibited or illegal under the law;

2) goods or services, the production and/or sale/provision of which is prohibited by law;?

3) goods excluded from civilian circulation. If an advertisement contains a commercial offer to a consumer, it must contain the essential information specified in Article 6(3) of the Law on the Prohibition of Unfair Commercial Practices for Consumers. Article 13 contains requirements for advertising distributed using other means of advertising distribution. Thus, the dissemination of advertising by telephone, facsimile, telex, or e-mail is permitted only with the consent or at the request of the consumer of the advertisement. Direct advertising addressed to a specific person is prohibited unless the consent of that person is explicitly obtained. The Law does not contain separate rules for advertising via the Internet. The State Service for Consumer Protection "Valstybin? vartotoj? teisi? apsaugos tarnyba" is the supervisory authority for advertising.

What is the tax system in Lithuania?

The Lithuanian taxation system provides a transparent and stable tax environment conducive to stable growth and business development. Thus, we have defined the basic types of taxes in Lithuania as:

• Corporate tax - basic tax rate is 15%. However under certain conditions, reduced rates of 5% and 0% are also applied.
• VAT - cryptocurrency exchange services are not subject to VAT, in addition, services for which invoices (e.g. sales invoices) are issued in virtual assets are subject to normal VAT rules.
• Individual tax - rates are 20% and 32% and depend on the level of individual income.

How can Manimama help you?

Manimama team of lawyers specialize in providing comprehensive legal services in the field of cryptocurrency and blockchain technologies. Therefore, we will help you obtain a cryptocurrency license in Lithuania, providing legal support at every stage of the process. Here, we would like to offer you a list of our services:

1. Company formation in Lithuania - in order to run cryptocurrency activities and receive a Lithuanian crypto-authorisation it is required to register a company in the legal form of UAB (limited liability company).
2. Registering share capital (€125,000) - it is a mandatory requirement for VASP and we will help you register this amount of the share capital.
3. Registered address for 1 year - we will help you find and register an office address (virtual address is also allowed).
4. Individual AML/KYC policies - we will prepare a package of AML/KYC policies for your project in accordance with regulatory requirements.
5. Registration as VASP within commercial registry - we will notify the Lithuanian Commercial Register of the registration of the company as a VASP.
6. Registration of VASP activities within FCIS/FNTT - we will apply for the crypto registration of your company in the FCIS/FNTT.
7. Search, integration, direct employment agreement for exclusive, local, experienced AML/KYC officer - we will assist you in searching for and hiring an AML officer qualified who will work in Lithuania to ensure compliance with local legislation.
8. Opening of the banking account for the share capital (€125,000) - without meeting this requirement, your VASP cannot be authorized, so we will help you to open such an account or a share capital contribution.
9. Opening a C2B account for crypto activities - as a VASP you will need a reliable payment solution for client settlements and we'll open one for you.
10. Setting up KYC/KYT provider - we will assist in selecting a KYC/KYT provider, in setting up KYC/KYT software and implementing project principles, as well as in adapting the company's internal documentation to the relevant KYC/KYT provider.

In summary

Overall, obtaining a cryptocurrency license in Lithuania offers attractive opportunities for businesses, investors and professionals in the cryptocurrency and blockchain sector. As Lithuania keeps establishing itself as a fintech hub with a progressive regulatory framework, the license serves as an impetus for growth, trust and success in an ever-evolving industry.

Contact us at [email protected] or use our telegram @manimama_sales and you will receive professional support and expert guidance on your way to successfully obtaining a cryptolicense in Lithuania. Manimama guarantees an individual approach to each client, ensuring full compliance with the legislation and utmost convenience in the process of obtaining the license.