Although the world is getting increasingly paperless, some areas are less prone to change, regulation being one of them. Making even small adjustments to the system is hard as so many of the procedures are interconnected. Why does Lithuania stand out from the crowd, with improvements (this time – e-licensing) being announced every week or so? It all comes down to strong political will and the regulator’s strategy of turning Lithuania into a booming Fintech hub.
Ease of access, user-friendliness, and simple one-click solutions for obtaining permits and licenses are some of the key things that Fintech companies look for when it comes to establishing their presence in the European Economic Area (EEA). Bank of Lithuania, already known for its flexible regulation, has recently invited global fintechs to apply for financial licenses from anywhere in the world.
This move will streamline the process of getting the licenses required to operate across the SEPA zone which unites 512 million users and 23 million SMEs. In the initial phase, remote applicants can choose an e-money institution (EMI) or payments institution (PI) license, with more options (Specialised banking license being the most exciting) to be added in the future.
To operate in the European Union (EU), Fintech companies must obtain a license issued by any member country. This begs the question, why Lithuania over any other member country? We all know the maxim that time is money, and this case is no exception. The Bank of Lithuania can issue these licenses 2-3 times faster than other institutions in the EU – in as little as three months. The reasons are multifold: from a “single-window” approach to the strong desire to diversify the market.
Not only does Lithuania have the fastest licensing tailored for innovative and transparent financial technology companies, it also has a progressive regulating system driving positive and advantageous changes. Often regulators impede the progress of smaller innovative service providers through rigid and strict bureaucratic processes. Here, the main regulator is actually the initiator of progress. And they are constantly striving to make moves towards making the business environment more beneficial and easily accessible for Fintech companies from all over the world.
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