Country overview

Lithuania is a sizeable global fintech hub, and the second jurisdiction in the European Union is by the amount of registered crypto entities. For large and middle-level blockchain companies, it’s easy to get a VASP license there. Also the country has wide range of options to relocate and get residence permit, such as: education, business, work permit, blue card, investor visa and family visa. After living 5 years in Lithuania a foreigner can get permanent residence. There is an option to get citizenship by naturalization after 10 years living in the country. 

Lithuania has a considerable danger security level according to our rating. Jurisdiction has 66.8 points (from 100) for safety level in Numbeo crime rating (1). Homicide level (2) is 2.6 per 100,000 inhabitants a year.

According to the guide of consulting company Eli Lithuania (3), crypto payments are legal in the country, and gains from them are taxable. There is a legal taxation procedure for crypto payments.

According to Eli Lithuania (4), salaries in the country must be paid in fiat money. However, it’s legal to pay bonuses and benefits in crypto.

In Lithuania, an entity may offer two types of virtual asset activities: virtual currency exchange operator and virtual currency wallet operator. These activities are not subject to licensing; however, specific requirements, as foreseen in the Law on the Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania(4¹), must be abided by to be recognized as a VASP.

The legal document that regulates most crypto entities in the country is the Law on the Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania (6). To be licensed in Lithuania, a legal entity must get approval from the Financial Crime Investigation Service of Lithuania (7) and The Commercial Register (Registrų Centras) (8). Also, partially crypto entities in the country are regulated by The Bank of Lithuania (9).

From November 2022, this jurisdiction has provided some changes (10) in VASP regulations. According to rue.ee guide (11), the most significant changes are:

The Commercial Register will be the supervisory authority to comply with formal requirements (deposit of initial capital, presence of a local AML manager in the structure of the company, etc.).

The minimum authorized capital of a cryptocurrency company will be increased to 125,000 EUR.

Instead of MLRO and a non-local AML manager, VASP will be required to have a local AML manager (working only in a single cryptocurrency company).

Also, according to Coinfirm (12), new rules have increased the required capital for customer insurance. That’s why registered companies have decreased from 800 to 200 in 2022.

The VASP must prove they hold EUR 100 000 per customer claim for indemnity and EUR 500 000 for all customers’ claims for indemnity with a guarantee document issued by an insurance undertaking

However, now the amount of operating entities is increasing. In August 2023, there were 444 companies registered (13). One of them is Bifinity UAB (Binance payment provider).

After 30th December of 2024 regulation rules in Lithuania will change because of MiCA implementation. Based on Ellex (14) All VASP providers operating in the country need to register as CASPs until the end of 2024. There is no transition period for this purpose, according to the press release (15) of the Lithuanian Central Bank (Lietuvos Bankas), which is the main regulator for CASPs, all licensing procedures for existing VASPs should be finished by the end of 2024 to continue operations in the country. The capital minimum of 125,000 euro is essential for any CASP.

1)Crime Index by Country 2023 Mid-Year

2)List of countries by intentional homicide rate

3 and 4)Crypto and taxes in Lithuania. Article

4¹)Тhe Law on the Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania

5) Financial Crime Investigation Service of Lithuania. INFORMATION FOR LEGAL ENTITIES CARRYING OUT THE ACTIVITIES OF VIRTUAL CURRENCY EXCHANGE OPERATORS AND (OR) DEPOSITORY VIRTUAL CURRENCY WALLET OPERATORS IN THE REPUBLIC OF LITHUANIA

6) Law on the Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania

7)Financial Crime Investigation Service of Lithuania

8)Registrų Centras

9) The Bank of Lithuania

10)Lietuvos Respublikos pinigų plovimo ir teroristų finansavimo prevencijos įstatymo Nr. VIII-275 2, 9, 25 straipsnių pakeitimo ir Įstatymo papildymo 25-3 straipsniu įstatymas (Money Laundering and Terrorist Financing Prevention Law of the Republic of Lithuania No. VIII-275 Law amending Articles 2, 9, 25 and supplementing the Law with Article 25-3)

11)CRYPTO REGULATION IN LITHUANIA. Article

12)Lithuania removes hundreds of VASPs from operating in the jurisdiction.

13)List of legal entities operating as depository virtual currency wallet operators
14)Ellex Guide
15)Lietuvos Bankas Press Release on MiCA implementation

16)PERSONAL INCOME TAX ON CRYPTOCURRENCY TRADE IN LITHUANIA

17)Lithuania Overview. PWC

18)PERSONAL INCOME TAX CHANGES IN LITHUANIA 2020. Article

Last update: November 2024