Payment Institution license
in Lithuania

Lithuania is one of the most popular European jurisdictions for obtaining a PI (Payment Institution) license. Favorable conditions have been created here for the start and development of fintech projects, and the licensing procedure is characterized by more lenient requirements compared to other countries. Experts from SBSB Fintech Lawyers will help you obtain a license for legal activities as a provider of financial services and will provide support at all stages of the business project implementation, taking on the resolution of all bureaucratic issues.

What Services Can a Licensed Payment Institution Provide?

A Payment Institution (PI) provides payment services under its payment institution license in Lithuania issued by the central bank of the Republic. The list includes the following categories:

• depositing cash into a payment account;
• withdrawing cash from a payment account;
• payment transactions, including under a credit line;
• issuing and acquiring payment instruments (cards);
• transferring money without creating a payment account;
• payment initiation services (PIS);
• account information services (AIS).

Also, other services which are similar to the above can be provided, including foreign exchange, storage and processing of relevant data, etc. Please note that Lithuanian PIs cannot issue electronic money and accept deposits from the public.

What Are the Benefits of Choosing Lithuania for a PI License?

Choosing Lithuania for a Payment Institution (PI) license provides companies with fast regulatory approval and EU market access. A PI license issued by the Bank of Lithuania allows a company to provide licensed services across all EU/EEA member states (30 countries). No separate local licenses are needed.

Also, they will benefit from relatively fast authorisation and a moderate standard license fee paid to the Bank of Lithuania, which is €898. Initial share capital requirements are also low (the threshold is €20,000–€125,000), as are operational costs compared to other EU member states. The licensed company is expected to pay a corporate income tax rate of 17%, while small entities with low revenue can pay 7%.

What Requirements Apply to Payment Institution Applicants?

The payment institution applicant must establish an appropriate legal structure to operate as a PI, have an appropriate organisational structure, and prepare application documents that comply with the requirements. Also, an entity must:

• comply with the minimum capital requirement, which depends on the services, but it cannot be less than the specified thresholds for the particular service categories, namely, EUR 20,000, EUR 50,000, or EUR 125,000.
• match the required background standards for shareholders and ensure sound and prudent management of the payment institution;
• prove that the executives are highly reputable professionals with the necessary credentials and expertise to perform their duties properly;
• develop the business plan and AML/CFT policies;
• have systems for identifying, managing and monitoring risks, and an adequate accounting system;
• ensure that the company holds professional indemnity insurance.

What is important is that the PI must already be prepared to comply with the requirements applicable to an operating PI.

What Documents Are Needed for the PI License Application?

To receive a payment institution license in Lithuania, the entity must submit to the Bank of Lithuania an application form with the attached documents, which include but are not limited to:

• confirmation of the applicant’s legal status;
• confirmation that the state license fee has been paid;
• activity programme;
• business plan;
• confirmation of the proper amount of initial capital;
• description of the measures taken to protect consumer funds;
• description of the management procedure and internal control system;
• organisational structure, and others.

The above package is submitted to the Bank of Lithuania with an application form.

How Does the Licensing Process Work with the Bank of Lithuania?

Lithuania enables electronic submission of PI licence applications. This eliminates the need to provide paper documents.

The Bank of Lithuania encourages applicants to contact its specialists before submitting an application to get a consultation. Also, when the package of required documents is reviewed, an applicant can directly access specialists to discuss the matter. The licensing process involves:

• pre-application consultations;
• payment of the license fee;
• submission of compliance documentation;
• formal completeness check (typically, for several business days);
• review of the documents (up to 3 months provided that no additional information is required);
• communication during the review with comments, if needed.

Finally, the Board of the Bank of Lithuania takes a decision to issue a license or not to issue it. The payment institution licence for restricted activities is reviewed within a shorter period.

What Ongoing Compliance Duties Apply After Authorization?

Once licensed, a Lithuanian PI must meet the regulatory requirements, including the following:

• maintain sufficient capital and own funds;
• ensure the safety of customers’ funds, at least by keeping them separate from the institution’s own funds or by investing them in low-risk assets;
• meet AML/CFT requirements by identifying and monitoring customers and beneficial owners and reporting suspicious activity;
• regularly report to the regulator;
• maintain an appropriate organisational structure and internal controls;
• manage operational, ICT, and security risks.

Also, the company should communicate with the regulator, notify it about changes in business activities, management, or ownership, and such events such as operational and security incidents, etc.

How Can SBSB Help with PI Licensing in Lithuania?

The SBSB guides clients through the entire setup process. We create your roadmap defining your strategy. Then, our lawyers handle company registration and help with policy drafting. Additionally, our team arranges the application for the license, collecting the compliance package for a regulatory review. When needed, we coordinate with local experts to ensure a quick and smooth regulatory review.