For startups wishing to register their activities in Lithuania, or for startups in general, who seek to break into the financial sector of the European Economic Area, there is one very optimal option (in addition to the well-known standard option for converting an enterprise into a banking institution). If you want to start a business right away, bypassing all the difficulties and pitfalls, pay attention to a ready bank license on this site – it is the way to save your time and many resources.
The main parameter of a specialized bank operating within Lithuania is the minimum capital amount – 1,000,000 euros, while for a standard bank it is 5,000,000. The powers of a specialized banking institution in Lithuania are the right to accept deposits from clients, issue loans, transfer funds and offer other types of banking services. Professional specialists can assist you in applying for a license authorization, which will greatly simplify your efforts. In this article, we will consider the main requirements for specialized banking institutions of the Lithuanian jurisdiction.
Range of Services and Range of Financial Products
An establishment of the aforementioned type in the indicated jurisdiction has the right to offer the following category of services to consumers:
- To accept deposits from clients and also to accept various repayable funds.
- Act as a lender, in particular, offer mortgage-type loans.
- Carry out financial leasing.
- Any payment direction services.
- Issue and control waybills, bills of exchange for the transfer of funds and other instruments.
- Providing financial guarantees.
- Act as a financial intermediary, that is, impose the role of an agent.
- Provide money management services.
- Assessment of the client’s ability to lend.
- Rent out safes.
- Exchange currency in cash.
- Issue digital money.
The Issuing Licenses Procedure for Specialized Banking Institutions
To the extent that it is reasonably possible, the Main Bank of the Lithuanian jurisdiction approaches the authorization of banking institutions openly. Typically, the first stage of authorization begins even before the company submits an application. The procedure itself has four steps.
- The first step is the formal introduction to the regulator.
- Second step – the application is submitted directly to the supervision office of the Main Lithuanian Bank. Within about five working days, the application will be accepted for consideration.
- At the third stage, all documents and the application itself are assessed. The representatives of the supervisory authorities, after assessing the documentation, transfers all documents to the Central European Bank. From the moment the documents are submitted, representatives of the Supervisors and the Bank together evaluate the papers. Provided that the documents are not flawed, the permit will be issued within the next six months. In most cases, additional information is also requested.
- At the fourth stage, either a license is issued or the company is rejected. All opinions of the relevant authorities become the basis for a decision.
Basic Requirements to Be Met to Obtain a Banking Permit
Particular attention is paid to some of the following aspects:
- how complete the package of documents was submitted;
- whether the applicant meets the minimum capital requirements set by the regulator. In accordance with the provisions of European Regulation No. 575/2013, the capital of the company must be equal to 5+ million euros; in the case of a specialized banking institution, the rate is set at 1,000,000;
- whether the shareholders are fit to perform their duties;
- is the management team adequately trained;
- whether the operating plan is consistent with the capabilities of the founders of the bank for its full implementation; in particular, the services offered by the institution must be highly reliable and safe.
The activity plan, the Statute, a description of the organization and structure of the company’s internal processes, the system developed for risk management, payment practices, the accounting system, technical and technological security tools, as well as other means, should serve to ensure the reasonable and safe operation of the bank. In addition, the institution must necessarily comply with the existing legal and regulatory acts, in particular, the requirements regarding the legal form, office and capital.
The capital at the disposal of a banking institution must be 5+ million euros. The capital for a specialized bank is 1+ million euros.
Capital can be formed directly at the time when the application is considered.
What Are the Advantages of Lithuania As a Field for Banking Activities?
The country has seen good growth dynamics for business related to the service sector. Industry, the spheres of shipbuilding and mechanical engineering, and woodworking are not standing still. Agriculture, fisheries, and the tourism industry have high performance. Such promising areas as information technology are also developing. Not only Lithuanians can find and occupy their niche. For emigrants, attractive conditions have been created that allow them to fully develop and receive a stable income.
- A market with a good level of competition and loyal conditions.
- Good and encouraging attitude from government authorities: the adoption of many programs to assist the banking sector in recent years.
- Pleasant authorization process: obtaining permission within 3 months – institution for digital money; it is possible to submit an application online (in particular, you can submit documents in English).
- Remote KYC procedure for clients.
- Availability of innovative technologies and approaches in the banking field – regulatory SANDBOX, LBCHain and others.
If you have focused on a banking institution in the Lithuanian jurisdiction, look at all benefits of ready business model – in this case, you will get completely organized structure. However, before you buy a ready business, it is better to check everything thoroughly several times. You cannot make an important decision about investing your assets based only on the appearance of the firm’s office. Only with a rational approach, the acquisition of an existing company will be a good alternative to starting one from scratch.