Payment Institution License in Lithuania - Application Review in 5 Days

A Payment Institution License in Lithuania offers several advantages for fintech businesses. The country provides a fintech-friendly regulatory environment, where the Bank of Lithuania supports innovation and works closely with fintech companies. The licensing process is relatively fast, usually taking around three months, which helps businesses enter the EU market quickly while reducing compliance and administrative costs.
Additionally, the payment institution license in Lithuania provides EU passporting rights, allowing companies to offer payment services across the EU and EEA countries without obtaining separate licenses. Lithuania is also part of SEPA, enabling faster and low-cost euro transactions, and offers a favourable tax regime with a 15% corporate income tax rate, along with R&D tax incentives.

The process begins with a preliminary analysis of the applicant’s business model, company structure, budget, and personnel requirements. After this, a meeting is arranged with the Bank of Lithuania to discuss the project and prepare a business plan in line with regulatory requirements.
Next, the applicant prepares regulatory and operational documents, including AML/KYC policies, risk management procedures, and internal controls. Finally, the required financial and organizational documents, such as company structure, proof of safeguarding client funds, and a three-year financial plan, are submitted along with the license application and fee to the Bank of Lithuania for approval.

The key documents required for obtaining a Payment Institution License in Lithuania include company identification details, a Programme of operations outlining the services to be provided, a detailed business plan with financial forecasts, and a description of the company’s organizational structure.
Applicants must also submit proof of initial capital, measures for safeguarding client funds, and documents outlining compliance and governance arrangements, along with internal control mechanisms. Additionally, procedures for handling security incidents and customer complaints, processes for managing and restricting access to sensitive payment data, business continuity measures, policies for collecting statistical data on transactions and fraud, a security policy, and AML/CTF compliance mechanisms must be provided.

The key requirements for obtaining a Lithuanian Payment Institution (PI) License include submitting an application to the regulator along with proof of payment of the initial capital and a copy of the office rent agreement in Lithuania.
Applicants must also provide a detailed business plan and internal policies, including AML/CFT, risk management, and information security policies. Additionally, the minimum share capital requirement varies depending on the services offered: at least EUR 20,000 for money transfer services, EUR 50,000 for payment initiation services, and EUR 125,000 for other payment services.

The checklist for obtaining a Lithuania Payment Institution License includes key documents such as the Articles of Association, a program of operations, and a detailed business plan with a three-year financial budget.
Applicants must also provide proof that the minimum initial capital of EUR 350,000 is maintained, along with descriptions of governance arrangements, internal control systems, AML/CFT compliance mechanisms, and security policies to safeguard client funds and data. Additionally, documentation must outline incident handling procedures, business continuity plans, statistical reporting processes, and risk management measures.
Information about the company’s management, branch heads (if applicable), and appointed auditors, along with evidence that the applicant complies with the requirements under the Law on Payment Institutions, must also be submitted.

The Payment Institution License in Lithuania allows companies to provide a wide range of regulated payment services across the European Union under the PSD2 framework. These services include enabling customers to deposit cash into a payment account and withdraw cash from it, as well as executing payment transactions through different methods.
Payment institutions can also process direct debits, execute credit transfers, and facilitate payment transactions using credit or debit cards. In addition, the license permits credit-backed payment transactions and the transfer of funds between payment accounts.
Under the PSD2 regulations, licensed institutions can further offer Payment Initiation Services (PIS), which allow payments to be initiated directly from a user’s bank account, and Account Information Services (AIS), which enable the aggregation and access of financial account data from multiple banks through a single platform.

Payment institutions in Lithuania must comply with several ongoing regulatory obligations to maintain their license. They must maintain the required capital at all times to ensure financial stability and meet their financial obligations.
Institutions are also required to keep proper records of customer transactions, financial statements, and other relevant documents. Regular reports must be submitted to the Bank of Lithuania and other regulatory authorities to ensure transparency and regulatory compliance. Additionally, payment institutions must maintain operational resilience, implement strong cybersecurity measures to protect customer data and financial assets, and regularly update their internal AML/CFT policies along with staff training.

The laws and regulations governing the Lithuanian Payment Institution (PI) License include key national laws such as the Law on Financial Institutions, Law on Payment Institutions, Law on Payments, Law on Companies, Law on Banks, and the Law on the Prevention of Money Laundering and Terrorist Financing, along with Resolution No. 03-83 of the Bank of Lithuania (2018) on initial capital and own funds.
Additionally, payment institutions must comply with EU regulations such as PSD2, AMLD6, GDPR, and the Market Abuse Regulation (MAR). These frameworks regulate licensing, operations, and compliance of payment institutions in Lithuania.

A Lithuania Payment Institution License authorizes companies to provide a range of payment services in accordance with EU regulations. These services include operating payment accounts, executing payment transactions, issuing payment instruments, providing money remittance services, and offering payment initiation and account information services. This license enables businesses to legally conduct payment-related activities while complying with the regulatory framework of the European Union.