Lithuania could easily be one of the friendliest countries for FinTech startups looking for a pathway into Europe. In fact, the country ranks third for ease of doing business in Doing Business 2018 for Europe & Central Asia region. Lithuania’s corporate tax rate (0-15%) is the third-lowest in the EU, and personal income tax rate (15%) is the second-lowest, allowing for capital accumulation in the hands of consumers and entrepreneurs – 25% of FinTech startups in the country are bootstrapped.
Lithuania has certain invaluable advantages for FinTech startups in the age of evolving bank-FinTech narratives when collaborations and M&A are on the rise. For example, startups can obtain an e-money or payment license in just three months (four with preparation stage), which is two to three times faster than in other EU jurisdictions, Invest Lithuania, the official agency for Foreign Direct Investment and Business Development in Lithuania, emphasizes.
Additionally, initial capital requirements for “lite” bank license (license for challenger banks) are five times smaller than in other EU jurisdictions, and the license can be obtained in just six months (eight, if we count preparation). Moreover, according to Go Vilnius, the initial capital requirement for setting up a bank in Lithuania offering the usual range of banking services is the smallest in the Eurozone and amounts to €1 million – as mentioned earlier; this is five times less than the requirement applicable to banks offering a full range of banking services, including investment services.
“We feel a huge interest in developing FinTech activities in Lithuania. The fast-growing number of licensed companies shows that participants in this highly potential sector willingly choose Lithuania as their home. This offers new opportunities for businesses and higher quality services for consumers,” said Marius Jurgilas, Member of the Board of the Bank of Lithuania.
Reuters recently reported that the country has seen a threefold increase in license authorizations for FinTech firms headquartered outside of Lithuania since 2015, with several applying after Britain’s June 2016 vote to leave the European Union. Totally, 18 have secured licenses in 2017, and 16 applications were under review as of December 2017, the edition adds, citing central bank data. One of Britain’s biggest names in FinTech, Revolut, was among those applications, indicating Brexit as a factor in their decision. Three other money transfer or payment firms also told Reuters that EU access was key to their decision: Singapore-headquartered InstaReM, and TransferGo and Contis, both based and licensed in Britain, with operations in Lithuania, Reuters shares.
“We were looking for a perfect HQ location in the EU. In Lithuania, we found a FinTech-friendly and fast regulator, as well as excellent international-grade talent. With all this, Lithuania is hands-down the best European base