Why did Lithuania decide to tighten the rules for obtaining an EMI license?

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After the UK left the EU, Lithuania became the most popular jurisdiction for crypto and EMI projects. It has issued over 100 licenses to large corporations and small startups. This interest was primarily because this country set very lenient requirements. However, the rules have changed this year, and obtaining a Lithuania EMI license has become much more difficult. Let’s look at why this happened and what difficulties companies may face.

What changes have occurred?

Lithuania became one of the first countries in the EU to regulate crypto and EMI. All companies that want to work in this industry must undergo an audit, obtain a work permit, pay taxes regularly, and provide reports on their activities. At the same time, the country has established very lenient requirements for recipients:

  • The company must be registered in this jurisdiction;
  • Minimum authorized capital – 12 thousand euros;
  • The organization must have an account in a local bank;
  • The staff must employ at least 2 people;
  • There must be a security specialist on staff who will monitor compliance with AML and KYC requirements;
  • Pay taxes regularly.

Meeting these requirements is relatively easy if you are willing to work honestly and openly. However, a decision was recently made to tighten the criteria as government authorities decided they wanted to keep their citizens safe. In addition, they want to receive more benefits from the development of this industry.

Let’s look at what innovations have appeared:

  • The minimum authorized capital was increased to 350 thousand euros;
  • A person with Lithuanian citizenship must work for the company;
  • You must serve customers from this country;
  • Your organization must have a SWIFT connection and many others.

The innovations should also make it easier to regulate the fast-growing industry, make it easier to identify fraudsters, and provide a higher level of customer security. The concern of any government is to make the lives of its citizens safer and increase the flow of taxes. Innovation should help solve both of these problems.

Why should you get a permit in this country?

Obtaining a permit in this country allows you to legally work in the EU, where many crypto enthusiasts and people interested in the development of the EMI industry live. Here, it will be as easy as possible for you to find new clients.

Lithuania is one of the most stable and fastest-growing countries in Europe. Even though Lithuania was previously part of the USSR, immediately after gaining independence, it began to carry out reforms and invest money in the development of the IT industry and financial sector. It gave a compelling impetus to economic development. Today, it has a high growth rate, which helps reduce possible risks. In addition, there is no unnecessary bureaucracy; many business processes are automated, so you do not need to be physically in the country to conduct business. All you need to do is open an office and hire local employees who will cooperate with regulatory authorities.

Government authorities are very tolerant of errors and shortcomings during a new company’s first year of operation. If they notice problems, they will make recommendations on how you can fix them. In addition, if you open a business here, you can quickly obtain a residence permit, which has many advantages.

Another advantage is that you can obtain a permit within just 3 months. In comparison, this process can take over 6 months in the UK. It is crucial if you want to launch your business as quickly as possible so that it starts making its first profit.

The main stages of obtaining

If you decide to obtain a permit in this country, you need to go through several necessary steps:

  1. Preliminary assessment of the project. Specialists must evaluate how your organization meets all the requirements of government regulators. It also involves the first meeting with representatives of the Bank of Lithuania and the provision of the necessary documents;
  2. Pre-licensing. It involves drawing up a sound business plan, recruiting staff, and other aspects.
  3. Obtaining permission. It involves drawing up financial documents and filing with regulatory authorities;
  4. Setting up infrastructure. Before your organization starts working, you must complete all the preparatory stages, make sure the software is ready, and establish work with the bank and within your team.

It is worth saying that the work does not end after obtaining permission. You must regularly submit reports to regulatory authorities. It is necessary to take care of accounting services, regular audits, and ways of interacting with regulatory authorities.

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