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In order to avoid the legalization of income received by criminal means, the work of cryptocurrency firms is under the control of certain legal bodies. All employees, especially members of management, entrepreneurs, must have clean criminal record and impeccable reputation.
The main requirements for an applicant for a crypto license in Lithuania are:
Separately, it should be noted that the option to buy a ready-made cryptocurrency license would be much more expedient and profitable in terms of saving time and efforts, as the whole structure will be ready to start crypto operations.
To obtain a crypto license in Lithuania, it is necessary to establish a company in Lithuania. Foreign companies can establish a subsidiary in Lithuania and apply for crypto license. Today, the most common business organization in Lithuania is a limited liability organization (UAB). The minimum share capital is 2500 euros, divided into shares.
A cryptocurrency company can be created Lithuania without visiting the country, fully remotely. Personal visit will not be needed in any stage on setting up an entity, opening a bank account and obtaining crypto license, as we can arrange a whole process by power of attorney.
UAB must have at least one owner (individual or legal entity), one director (individual) and legal address in Lithuania. Plus, in a crypto company, it is necessary to have an employee to combat financial fraud and terrorism. He/she must be well trained and have professional skills, and residence in Lithuania is necessary.
If, after obtaining a license, there is a change in any structure of a cryptocurrency company (address, owner, board member, beneficiary, AML employee), then it is necessary to register all changes in the registry with the provision of all necessary information. The Bank of Lithuania handles license applications, the process is controlled by FCIS and issued by the Commercial Register. FCIS is a separate independent organization, which is a structural subdivision of the Lithuanian Police and Border Police Department. Order No. V-5 of January 2020 controls the operation of cryptocurrency firms and prevents financial terrorism.
To apply for a cryptocurrency permission, the following documents are required:
Throughout the process of obtaining a license, it is within the right of the regulator to request access to all information related to the activities of a cryptocurrency firm. Only after checking all the necessary information and after fulfilling all the conditions, a license can be issued.
Before applying for a crypto authorization in Lithuania, you need to prepare all the necessary documents about the internal processes of the company, which must meet the anti-fraud (AML) and KYC criteria set by FCIS:
Key FCIS requirements for AML/Compliance Officer:
AML/Compliance officer obligations:
When does a KYC/AML officer apply an enhanced due diligence?
1. When interacting with a new customer.
2. When making a cash payment of more than 15,000 euros or the equivalent in another currency.
3. When, checking the documentation, finds doubts about its reliability.
4. When the customer is suspected of financial fraud or terrorism.
The standard corporate tax rate in Lithuania is 15%. Under certain conditions, the effective rate for micro-enterprises can be reduced to 0%.
Tax authorities do not require certain additional reporting from cryptocurrency companies. Accounting is carried out according to the principle of other Lithuanian companies – only with the peculiarity that transactions in cryptocurrency are equated to euros and the tax on the income of a cryptocompany is paid to the state budget in euros.
When it comes to the activities of crypto exchangers and crypto exchanges in Lithuania, VAT rules do not apply to cryptocurrency exchange transactions. In the case of the sale of goods or services for cryptocurrency, VAT 21% is applied to transactions.
Features of taxation of income from the sale of tokens during the ICO depend on the functionality of the token and the stages of its use, so the tax rate can vary between 0-15%.
The activities of NFT marketplaces are also subject to general taxation rules. Intermediary companies that receive income from the sale of NFTs in the form of a commission pay tax on the amount of the commission expressed in euros. Creators of non-fungible tokens – residents in Lithuania (companies and individuals) pay a 15% tax on income from the sale of NFTs, as when selling ordinary goods or property. If the NFT provides for a reward to the creator from the subsequent resale of the token, the royalty rate varies from 0 to 10%, depending on the location of the counterparty.
It is the responsibility of a licensed company to control all clients and transactions, which complies with all AML / KYC requirements. In turn, the FCIS Supervisory Authority also has the right to request from time to time information on the activities of the company, especially related to compliance with AML / KYC rules.
However, they often require the company to constantly comply with AML/KYC obligations: collecting information about customers from a virtual currency project and providing this data to regulatory authorities. In particular, the need for reporting applies to suspicious transactions and transfers exceeding the amount of 15,000 euros (in the form of a single transaction or related transactions in smaller amounts that exceed 15,000 euros in total).
Considering the complexity of drafting internal documents and other nuances, in particular, the peculiarities of the legal structure, we recommend paying attention to a ready-made license for cryptocurrency operations.
Our specialists will be glad to guide you on the process of obtaining a cryptocurrency license in Lithuania, incorporate a compliant entity, provide ongoing consultations and help in communication with FCIS. If you want to save time, you can buy a ready-made company in Lithuania with crypto license and bank account, that is already fully ready to cooperate with clients. Please contact us to receive more information. You can also see our offers in category ready-made companies and licenses for sale.
The international company Eternity Law International provides professional services in the field of international consulting, auditing services, legal and tax services.