Bank Licence in Lithuania

In Lithuania, banks fall within a designated category of credit organizations. This label sets them apart from other financial service providers. With such distinction comes a licensing requirement and a set of specific conditions for establishment.

In Lithuania, a bank licence grants the right to provide financial services to all natural persons and corporate entities. Bank licensing involves both the Bank of Lithuania and the European Central Bank (ECB). Applications are submitted to the Bank of Lithuania, while the ECB is responsible for granting banking authorisations.

The process of application for a bank licence may take up to 12 months, depending on licence type and multiple other factors.

Bank Licence Types

1. Regular licence
2. Specialised bank licence – a licence category introduced in Lithuania in 2017. Authorisation is granted by the ECB following assessment involving the Bank of Lithuania. It represents an effort to ease establishment and operation conditions for foreign financial startups that intend to offer financial services within the European Economic Area. Specialized licence lowers the minimum capital requirement to 1 million euros (from 5 million euros applicable to a regular bank licence). However, this licence type restricts the scope of investment-related and other financial services a company is allowed to provide.

Requirements and procedure for obtaining a bank licence in Lithuania

Upon receiving a licence, a bank must be fully prepared to fulfil all the relevant requirements and operating conditions. In accordance, throughout the entire application procedure, the Bank of Lithuania requires well-structured and comprehensive documentation from the applicant. Here are some of the requirements that a bank must fulfil to be granted a licence:

• Information requirement. A company must submit all the necessary information and documentation, only providing information that is correct and accurate. That includes any additional documentation requested by the Bank of Lithuania
• Minimum capital requirement. For a regular licence, it is 5 million euros, and for a specialized licence – 1 million euros. Nevertheless, depending on the financial services that the company is intending to provide, this requirement may become higher.
• Approved background and competences of shareholders and managers. Founders and shareholders must be competent, have an impeccable reputation, and be financially reliable.

With regard to the application process itself, it consists of four main stages:

1. Preliminary evaluation. Applicants attend a series of initial meetings to discuss their readiness to obtain a licence and fulfil all the requirements that will allow them to provide reliable financial services for an extended period of time. Before submitting the formal licence application, the applicant must pay the state levy of EUR 4,157 into the State Tax Inspectorate’s account. This is the banking licence levy, rather than a fee for preliminary meetings.
2. Submitting an application. Within 5 working days, the Bank of Lithuania checks whether all required documents have been submitted and whether there are formal deficiencies. This initial completeness check does not constitute the substantive assessment or approval of the application. In case any documents are missing, the Bank of Lithuania will issue a special request for missing information.
3. Evaluation of documents and consideration. This process is simultaneously conducted by the Bank of Lithuania and the European Central Bank. All documents within the application are reviewed and evaluated before the final decision is taken. This process may last 6 months or longer.
4. Final decision. The Bank of Lithuania may reject an application that does not meet the applicable national requirements. Where those requirements are met, it submits a draft proposal to grant authorisation to the ECB. The ECB then decides whether to grant or refuse authorisation and notifies the applicant.

Company in Lithuania UAB is specialized in providing valuable legal guidance to foreign individuals and companies who are planning to conduct business activity in Lithuania. Contact our team of competent experts who are ready to help you obtain a bank licence in Lithuania, ensuring a smooth and efficient navigation throughout the entire application process.