Cryptolicense in Lithuania: From company structure to taxation
Lithuania is one of few EU member states that allows legal financial transactions using cryptocurrency. The state has also developed clear regulations for cryptocurrencies. Get in touch with our experts to obtain a crypto exchange license in Lithuania as soon as you can!The Lithuanian government regulates the crypto-industry and scrutinizes participants. In the summer 2020, for example, the Central Bank (CB), published a document that revised its approach to cryptocurrency and tokens. The Central Bank does not oppose financial market participants using cryptocurrency in part of their work. It did however prohibit banks and other financial institutions from working with virtual assets (accepting payments in cryptocurrency, providing loans in virtual currencies etc. ).
A cryptocurrency exchange license and wallet license in Lithuania has many advantages: minimal procedural requirements, low cost, minimum investment capital required for company incorporation, 2500 euros. A crypto license in Lithuania doesn't impose residency restrictions on directors or shareholders, and remote company registration is permitted in Lithuania.
The structure of a Lithuanian cryptocurrency firm: key points
You must first start a Lithuanian company before you can apply for a cryptocurrency license. These are the requirements for the company's structure:
- At least one owner (individual, corporate) and at most one board member.
- AML Compliance Officer
- The firm must have a registered office in the locality.
- Supervisory authorities must have information about beneficial ownership (UBO).
Owner, board member, and compliance officer are exempt from citizenship and residency restrictions. Proficiency and compliance with FCIS requirements are mandatory. The Compliance Officer's responsibilities include but are not limited:
Organise the collection and analysis data related to suspected money laundering or financial fraud transactions that are apparent in the activities of the regulated individual;
- FCIS will receive notices of suspicion of money laundering.
- Regular written statements of compliance to the board
- Other compliance obligations with AML/CTF.
For the license, you will need the following documentation: apostille copies for passports of all project participants; power of attorney (PoA); description of the proposed business model and licensed activities; resume (CV), indicating where and how many participants are employed, and certificate of no criminal conviction (not older than three months) for all company participants.
All documentation listed must be notarized.
Taxation of cryptocompanies within Lithuania
The nature of cryptocurrency transactions will determine the tax treatment. The following taxes might apply in general:
- Crypto-exchanges are exempt from VAT
- Corporate profits are subject 15% tax (CIT = 15%) CIT is a 0-5% tax on small businesses that employ fewer than 10 people and have an annual income below EUR300,000.
- Dividends are subject to 15% tax
It is possible to obtain a license for cryptocurrency in Lithuania by knowing that there are no reporting requirements to the regulator.
