Investment Fund License in Lithuania

Single investment management license and investment fund for Europe

Investment management companies authorised in Lithuania may be permitted to manage qualifying investment funds established in other EU Member States under the applicable UCITS or AIFMD cross-border management framework. Such arrangements require compliance with the relevant notification procedures, the fund’s home Member State legislation and the manager’s authorised scope of activities.

For example, a Lithuanian-authorised management company may be eligible to manage a qualifying Luxembourg investment fund, while the fund’s assets are held by an appropriately appointed depositary in accordance with applicable law. The appointment of brokers, investment advisers and other service providers must comply with regulatory requirements concerning delegation, conflicts of interest, depositary oversight and the management company’s continuing responsibilities. Mere registration of a Lithuanian company does not confer these rights. This creates a safe, efficient and cost-effective pan-European investment management system. Lithuanian investment fund management companies must establish effective governance and demonstrate adequate operational substance in accordance with the applicable regulatory framework. There is no universal requirement for every manager or shareholder to be a Lithuanian citizen or permanent resident. However, the Bank of Lithuania assesses whether the institution’s management arrangements, decision-making processes, availability of key personnel and operational presence enable effective supervision. A management company cannot assume that all management functions may be performed remotely from outside Lithuania without regulatory assessment. The ability to outsource relatively cheaply the net worth of assets, investor relations or other management functions of local service providers provides a strong competitive advantage.

Friendly and business-oriented investment management and fund management

The Bank of Lithuania provides regulatory guidance and pre-application consultations to prospective financial market participants. However, newly authorised investment fund management companies remain subject to the applicable regulatory and supervisory requirements from the commencement of their activities. There is no universal statutory exemption from enforcement measures or administrative sanctions during the first year of operation. The Bank of Lithuania may take supervisory action where legally justified, taking into account the nature and seriousness of any infringement. Business-oriented regulatory behaviour and significantly lower costs of establishing, licensing and servicing financial institutions make Lithuania the preferred jurisdiction for investment advisers and managers from around the world.

Lithuania is the leading jurisdiction for investment management and licensing of funds

The reasons why Lithuania is one of the leading jurisdictions in the EU for licensing management companies and investment funds:

• Business-oriented regulation and fast licensing process.
• Existing financial market infrastructure and a large pool of professionals.
• Lithuanian investment fund management companies must satisfy applicable governance, management suitability, operational substance and effective supervision requirements. Lithuanian residence is not a universal statutory requirement for every member of management, but the company’s actual management arrangements must allow effective decision-making, regulatory oversight and sufficient availability of responsible personnel. Whether non-resident managers are acceptable depends on the proposed structure, licence type and the Bank of Lithuania’s assessment.
• Licensing applications and supporting documents must comply with the language and formal submission requirements established by the Bank of Lithuania. English-language documentation may be accepted in certain circumstances, but applicants should not assume that every application document may be submitted exclusively in English. Lithuanian translations or additional explanations may be required depending on the document and applicable supervisory procedure.
• The regulatory «sandbox». The Bank of Lithuania strives to support the newly created companies.
• Startup immigration pathway – eligible third-country nationals establishing innovative businesses in Lithuania may qualify for a temporary residence permit under the applicable Startup Visa Lithuania framework. Eligibility depends on the assessment of the proposed innovative business and compliance with Lithuanian immigration requirements. A startup residence permit is not automatically available merely because an individual establishes or manages an investment fund management company.

Company in Lithuania UAB specializes in providing legal advice to foreign individuals and companies that plan to do business in Lithuania and would like to obtain a license of investment fund. Contact our legal team who are ready to help you get the necessary license in Lithuania, providing legal support and support throughout the licensing process.