Crypto license obtainment in Lithuania

Two types of crypto licenses can be obtained in Lithuania:

Both are under the supervision of the Lithuanian Financial Crime Investigation Service (FCIS)

Cryptocurrency exchange operator

This type of license allows a firm to exchange digital currency to fiat currencies or vice versa, and cryptocurrency to cryptocurrency for a fee

Cryptocurrency custodian wallet operator

License for companies introducing cryptocurrency wallets to store cryptocurrency, create encrypted client keys, and store them.

A licensed crypto company can perform the following activities:

– Exchange of fiat currency to virtual currency
– Exchange of virtual currency to fiat currency
– Exchange of virtual currency to another virtual currency

– Transfer of virtual currency between wallets
– Storage of virtual currency on behalf of your clients
– Transfer of virtual currency between wallets
– Storage of fiat currency on behalf of your client for a certain period of time for the
subsequent exchange to crypto-currency

Legal framework

In Lithuania cryptocurrency is entirely legal. Its regulation is carried out taking into account the requirements of the Law on the Prevention of Money Laundering and the Financing of Terrorism. If you cannot independently understand the laws regarding cryptocurrency regulation, you can seek help from our specialist.

Before you can get a license to use cryptocurrencies, you need to register a limited liability company (UAB). The minimum authorized capital for obtaining a permit is 125000 Euro. You can set up a company while visiting Vilnius or entirely remotely with the help of a trustee located in Lithuania.

At the moment, a limited liability company is the most popular form of company management. It assumes that the company’s authorized capital is divided into shares that can be wholly or partially sold or bought, donated, or inherited. UAB must have one owner and one director (individual) who manages the company.

Advantages

  • Lithuania is recognised as a European Fintech center
  • Loyal conditions and a favorable financial environment
  • Relatively simple procedural requirements to obtain a license
  • Relatively short time frame for setting up a crypto company
  • One of the lowest corporate taxes in the EU – 15%
  • Possibility to register a company remotely
  • No residency requirements for owners and shareholders, no requirements to hire Lithuanian staff
  • AML/KYC

Depending on the characteristics of your crypto activities, your company might be subject to paying the following taxes:

  • Corporate Income Tax (CIT) – 15%
  • Value Added Tax (VAT) – 21%
  • State Social Insurance (SSI) – from 21%
  • Withholding Tax (WHT) – 15%

Corporate Income Tax

The Lithuanian Corporate Income Tax is one of the lowest in the EU and is levied on the revenues generated by the Lithuanian crypto companies. Depending on the residence status of a company, the tax is applied either to the worldwide income or income sourced in Lithuania. A company is a tax resident of Lithuania if it’s incorporated there under Lithuanian law.

Resident crypto companies are obligated to pay Corporate Income Tax on all income sourced inside and outside of Lithuania. Non-resident crypto companies are only taxed on their income sourced in Lithuania (e.g. through permanent establishments located in Lithuania).

Income sourced from economic activities carried out by a Lithuanian tax resident through permanent establishments located in one of the EEA countries or in a country with which Lithuania has an agreement on the elimination of double taxation isn’t taxed if such income is subject to an equivalent tax in these countries.

In the context of the Corporate Income Tax application, based on the nature of transactions and economic implications, cryptocurrencies are recognised as short-term assets that can be used as a means of payment for products and services or held for sale.

Companies with an average number of employees not exceeding 10 people and income for the tax period not exceeding 300,000 EUR are taxed at the rate of 0% for the first tax period and at the rate of 5% for the following tax periods, except for cases outlined in the Law on Corporate Income Tax.

Value Added Tax

Generally, a crypto company must register as a VAT payer if it supplies taxable products or services in Lithuania and when its taxable annual turnover has exceeded 45,000 EUR.

For VAT purposes, the definition of cryptocurrencies isn’t dependent on the Bank of Lithuania as in this context they’re defined as an alternative means of payment and are therefore subject to the rules applicable to fiat money. All transactions involving cryptocurrencies are considered financial transactions.

Steps of opening a Private Limited Liability Company (UAB) for crypto activities:

  • Prepare a Memorandum of Association along with Articles of Association
  • Reserve a temporary company name via the State Enterprise Centre of Registers
  • Obtain a business address in Lithuania
  • Open an accumulative bank account
  • Transfer share capital to the bank account
  • Notarise the founding documents at a registered notary’s office (the notary must confirm the accuracy of the data entered in the application of registration, the compliance of the Articles of Association with the requirements of the law and the fact that the company can be registered)
  • Register the company at the State Enterprise Centre of Registers
  • Convert the accumulative bank account into a settlement account
  • In the case of online company registration, obtain an authorised electronic signature
  • Register with the State Tax Inspectorate and the State Social Insurance Fund
  • Submit an application for a crypto licence to the Bank of Lithuania

Please, contact our specialists for more information about fees and personal requirements for your project.

FAQ – Crypto License in Lithuania

1. What types of crypto licenses are available in Lithuania? ↓

Cryptocurrency Exchange Operator: Allows companies to exchange digital currencies for fiat or other cryptocurrencies for a fee.

Cryptocurrency Custodian Wallet Operator: Permits companies to store cryptocurrency, create encrypted client keys, and manage wallets for clients.

2. Who oversees crypto licenses in Lithuania? ↓

The Lithuanian Financial Crime Investigation Service (FCIS) regulates crypto activities and licenses in Lithuania.

3. What activities can a licensed crypto company perform? ↓
  • Exchange fiat currencies for virtual currencies and vice versa.
  • Exchange one cryptocurrency for another.
  • Transfer cryptocurrencies between wallets.
  • Store virtual currencies and fiat money for clients, preparing for later crypto exchanges.
4. Is cryptocurrency legal in Lithuania? ↓

Yes, cryptocurrency is fully legal in Lithuania. Its regulation follows the Law on the Prevention of Money Laundering and the Financing of Terrorism.

5. What is the process for obtaining a crypto license? ↓

First, you need to register a Private Limited Liability Company (UAB) in Lithuania. This can be done either in person or remotely with the help of a local trustee. The minimum authorized capital required is €125000.

6. What are the advantages of establishing a crypto company in Lithuania? ↓
  • Lithuania is a recognized Fintech hub in Europe.
  • The country offers a favorable financial environment, simple procedures, and no residency requirements for owners and shareholders.
  • Lithuania has one of the lowest corporate tax rates in the EU, at 15%.
  • The process for setting up a company is relatively quick and can be done remotely.
7. What taxes do crypto companies in Lithuania need to pay? ↓
  • Corporate Income Tax (CIT): 15% for larger companies; 0% for smaller businesses with less than 10 employees and annual income below €300,000 for the first tax period (and 5% for subsequent periods).
  • Value Added Tax (VAT): 21%, applied to goods and services, though crypto transactions are considered financial transactions and are VAT-exempt.
  • State Social Insurance (SSI): From 21%.
  • Withholding Tax (WHT): 15% on certain payments.
8. What is the process for registering a UAB for crypto activities? ↓
  • Preparing the necessary founding documents (Memorandum and Articles of Association).
  • Reserving a company name and obtaining a business address in Lithuania.
  • Opening an accumulative bank account and transferring share capital.
  • Notarizing documents and registering the company with the State Enterprise Centre of Registers.
  • Finally, applying for a crypto license from the Bank of Lithuania.
9. What AML/KYC requirements apply to crypto companies in Lithuania? ↓

Companies must comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations, as outlined in Lithuanian law, based on the nature of their crypto operations.

10. Can I set up a crypto company remotely in Lithuania? ↓

Yes, it is possible to register a crypto company remotely with the assistance of Finance-Assistant team. There are no residency requirements for company owners or shareholders.

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