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This article looks at how to obtain a PI/Payment Institution institution license in Lithuania. In Lithuania, The Bank of Lithuania is the financial regulator for regulating PI/Payment Institution. If you wish to become a PI/Payment Institution in Lithuania then you must prepare and submit an application in Lithuania to the Lithuanian financial regulator - the Bank of Lithuania, according to Lithuanian law, as set out in the law on financial institutions.
Key features and benefits of a PI/Payment Institution license in Lithuania
- By becoming a PI/Payment Institution in Lithuania, your license will be recognised in all other EEA (European Economic Area) member states. Through ‘passporting’, this allows you to operate your electronic money institution across all EEA countries with a single license.
- Minimum initial capital requirement of EUR 20,000.
- Issue payment services such as money transfer, payment processing, cards, and more across Europe.
- Obtain the payment institution license in as little as 3 months.
- You can access SEPA and CENTROlink – a payment system developed and operated by the Bank of Lithuania.
- Remote account opening for individual and business customers.
- Issue Visa or Mastercard payment cards for both individual and business users.
- The regulator offers remote KYC for customer onboarding whilst relaxing on financial penalties for start-ups – for example, no regulatory fines or penalties in the first year of operation.
Licensing process for PI/Payment Institutions in Lithuania
Legal framework and legislation of PI/Payment Institutions in Lithuania
- Republic of Lithuania Law on Financial Institutions
- Republic of Lithuania Law on Companies
- Republic of Lithuania Law on Electronic Money Institutions
- Law of the Republic of Lithuania on the Prevention of Money Laundering and Terrorist Financing
- Law of the Republic of Lithuania on Payments
- Resolution No 246 of the Board of the Bank of Lithuania of 30 December 2009 on the Regulations on Keeping the Public Register of Payment Institutions
- Resolution No 03-181 of the Board of the Bank of Lithuania of 14 November 2013 on approval of the Guidelines on the Assessment of Members of the Management Body and Key Function Holders of the Financial Market Participants Supervised by the Bank of Lithuania
PI/Payment Institution license requirements for Lithuania
- A minimum capital requirement of €20,000 - 125,000 to establish a PI/Payment Institution license in Lithuania
- The requirement to safeguard client funds either with a segregated client bank account or with an insurance policy.
- The management body of the PI/Payment Institution in Lithuania must be of good repute and possess the relevant qualifications and experience to perform their duties.
- Whilst Lithuanian legislation does not require the management body to reside in Lithuania, it is advised that the Lithuanian PI/Payment Institution has one director or representative in Lithuania who is able to make decisions and is available to Lithuania regulator.
List of services you can offer with the PI/Payment Institution license in Lithuania
The complete list of payment services is presented in Article 5 of the Republic of Lithuania Law on Payments
- services enabling cash to be placed on a payment account and all of the operations required for operating a payment account;
- services enabling cash withdrawals from a payment account and all of the operations required for operating a payment account;
- the execution of payment transactions, including transfers of funds on a payment account with the user’s payment service provider or with another payment service provider, including, execution of direct debits, including one-off direct debits;
(i) execution of payment transactions through a payment card or a similar device; execution of credit transfers, including standing orders;
(ii) execution of payment transactions where the funds are covered by a credit line for a payment service user, including, execution of direct debits, including one-off direct debits; execution of payment transactions through a payment card or a similar device;
(iii) execution of credit transfers, including standing orders;
- issuing payment instruments or acquiring payment transactions;
- money remittance;
- payment initiation services;
- account information services.
Step by step process and procedure to obtain the PI/Payment Institution license in Lithuania
1. We will assess your business idea and compare this with the suitability of the PI/Payment Institution license. Depending on your business model, we may suggest an alternative and more suitable license option, such as an E-money or banking license.
2. When we have agreed on the license type, we will confirm the conditions and requirements of the license, such as initial capital and operational requirements.
3. We will set up and form your legal entity in Lithuania.
4. We will then begin to prepare your application, working closely with you. If you prefer, we can also help you with your company in Lithuania and arrange any banking facilities that you may require.
5. We will finally submit your application to the Bank of Lithuania.
6. The regulator may come back with some further questions. In this case, working closely with you, we will prepare the responses and communicate with the regulator.
7. Once the regulator is satisfied with your application, and you have provided all the required documents, such as evidence to satisfy the initial capital and safeguarding measures, the regulator will then issue you your license.
PI/Payment Institution license Lithuania key documents requirement
1. Basic company details;
2. Programme of operations;
3. Business plan;
4. Structural organisation;
5. Evidence of initial capital;
6. Details of your measures to safeguard client funds;
7. Governance arrangements and internal controls mechanism;
8. Procedure for monitoring, handling and following up on security incidents and security-related customer complaints;
9. Process for filing, monitoring, tracking and restricting access to sensitive payment data
10. Business continuity arrangements;
11. The principles and definitions applicable to the collection of statistical data on performance, transactions and fraud;
12. Security policy document;
13. Internal control mechanisms to comply with obligations in relation to money laundering and terrorist financing (AML/CFT obligations);
14. Details of auditors (if applicable).
15. Details and identity of the directors and shareholders.
Buckingham Capital Consulting is an international consulting firm, specialising in payment services, electronic money, banking, and investment services. We are able to advise you on the best course of action and strategy based upon your business plan and financial product or service. We can you with licensing, compliance, operational setup and related services, including, obtaining banking facilities. For more information, visit our website on www.buckinghamcapitalconsulting.com
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