Lithuania introduced a new type of Financial institution for FinTech

In order to attract more financial institutions and Fintech start-ups to Lithuania the Bank of Lithuania introduce a new type of payment service provider – so called “specialised bank“. The decision will come into force as of the 1st January 2017.

“Such type of financial service provider will especially be attractive for Fintech companies, because it covers both – e-money and payment institution licences”, – says Inga Karulaityte-Kvainauskiene, attorney at law of ECOVIS ProventusLaw (Lithuania).

As other financial service providers, specialised banks will be able to offer following financial services:

• Lending;
• Payment services;
• Receipt of deposits;
• Currency exchange;
• Issuing of e-money;
• Issuing guarantees;
• Fund administration;
• Financial leasing;
• Financial intermediation;
• Creditworthiness assessment services;
• Safe-deposit box rental.

Specialised banks will not be able to provide investment services or manage investment, pension funds or be active by providing other services related to securities emissions. Such services will be prerogative of full service banks.

It is important to note that initial capital for the specialised bank must be not less than 1 million Euro, as for full service bank – 5 million Euros. Other requirements relating the management, level of prudential requirements and reporting, assessment period are the same as for full service banks.

The Bank of Lithuania is granting a license for a specialised bank within 6 months (can be extended to 12 months) after submission of all required documents. For electronic money institutions and payment institutions, this period takes up to 3 months.

Bank of Lithuania is also flexible about questions related the needed documentation for specialized bank, payment and electronic money institutions. No translation to Lithuanian language of the required documents is needed for getting a license – the Bank of Lithuania accept them in English.

From the 1st of December, 2016 there is no need of  face-to-face identification of the clients of FinTechs – currently only e-signature is needed and in the nearest future video or photo in real time identification is foreseen.

Once issued the specialised bank license will be valid across all EEA. The licenced specialised bank will be able to provide authorised financial services throughout the single market, either through establishment of branches or exercising the freedom to provide services. The passporting notification procedures executed via the Bank of Lithuania might take 1 (if the freedom to provide services is exercised) or 3 months (if branches in other EEA member state are established).

If you have questions, relating the Fintech opportunities in Lithuania please do not hesitate to contact us:

Inga Karulaityte-Kvainauskiene
Partner, Attorney-at-Law
ECOVIS ProventusLaw
inga.karulaityte@ecovis.lt
Phone: +370-5-2153018

More about Fintech opportunities for Fintech companies in Lithuania you can also see at our video.