Eternity Law International — News — Investment fund in Lithuania

Investment fund in Lithuania

Published:
August 5, 2024

The Bank of Lithuania, being the central bank and regulatory body of the country in the field of activity of any financial, and in particular investment firms, focuses on supporting start-ups. During the first year of operation, companies are provided with advice and support in lieu of penalties for minor violations. This approach, along with business-oriented regulation and low costs for creating, licensing and servicing financial institutions, makes this country one of the most attractive jurisdictions for creating an investment fund Lithuania and for developing the businesses of entrepreneurs from all over the world.

Our team is highly qualified experts in the field of establishing and licensing commercial structures. We are focused on achieving the most effective results for our clients. Our lawyers will help you obtain an investment fund license in any country in the world. We provide full consulting and practical support.

Lithuania investment regulations: leading jurisdiction for investment management and activities of fund structures

This jurisdiction occupies a leading position among EU countries due to the following benefits of Lithuania investment funds.

  1. Fast licensing: licensing process in this country is fast and efficient, allowing companies to get started quickly.
  2. Developed financial infrastructure: the jurisdiction has a strong financial market infrastructure and qualified professionals, which contributes to business development.
  3. Flexibility in management: company management does not have to reside in Lithuania, which reduces operating costs and facilitates management.
  4. Convenient submission of documents: documents can be submitted in English, which simplifies the process for foreign companies.
  5. Regulatory sandbox: The Bank of Lithuania supports new companies by giving them the opportunity to test their ideas and products in a safe environment.
  6. Startup Visa: The jurisdiction offers special visas for non-EU/EEA nationals involved in innovative businesses.
  7. Low operating costs: in comparison with other EU countries, the costs of establishing and maintaining financial institutions in Lithuania are significantly lower.

Our firm provides legal advice to foreign individuals and companies as part of Lithuania fund registration. We offer comprehensive support at all stages of the licensing process, from document preparation to interaction with regulatory authorities. In addition, our company provides assistance in the establishment of investment funds in SVG, Malta, Portugal and other countries.

Establishing and Lithuania fund management: advantages of EU directives

  1. Directive 2009/65/EC (UCITS): allows investment managers licensed in an EU member state to offer their funds throughout the EU and EEA, significantly expanding the market for fund managers.
  2. Directive 2011/61/EU (AIFMD): regulates alternative investment fund managers, allowing their marketing throughout the EU to professional or alternative investors. This removes barriers to entry and creates a level playing field for all market participants.

This country offers a modern and developed financial infrastructure, making it an attractive place for starting a fund in Lithuania.

  1. Nasdaq presence: The world’s first electronic stock market, Nasdaq has a significant presence in Lithuania and the Baltics. The Nasdaq Center of Excellence for Technology and Business Support is located in Vilnius.
  2. Baltic market: The Nasdaq stock exchanges in Tallinn, Riga and Vilnius are combined into the Baltic Market, simplifying cross-border trading and minimizing differences between markets.
  3. Central securities depository: central securities depository of Lithuania, Latvia and Estonia, owned by Nasdaq, provides high-quality custody services, providing secure custody and management of securities.
  4. Support innovation: Lithuania is actively developing the fintech sector, attracting start-ups and technology companies, which creates a favorable environment for innovative financial solutions.

Lithuanian investment funds have a unique opportunity to create and manage investment funds in other EU member states. For example, a Lithuanian management company can effectively manage funds registered in Luxembourg, while using Luxembourg depositories for holding assets and the services of local brokers and investment advisers for distributing funds. This approach provides a secure, efficient and cost-effective way to manage investments at an EU-wide level, making Lithuania a strategically important link in the European investment ecosystem.

Lithuania fund setup: flexibility in management

Modern Lithuanian regulations provide fund managers with significant flexibility, allowing them to operate from abroad and be close to their clients. The ability to outsource tasks such as net asset value (NAV) calculations and investor relations to local service providers can reduce transaction costs and improve competitiveness. In addition, this flexibility leads to more efficient fund management and improved customer service.

The Bank of Lithuania, acting as a central bank and regulator, has changed its approach to regulation. Instead of a traditional supervisory role, he focused on supporting and advising startups, pledging not to penalize them for minor violations during their first year of operation. This business-oriented approach attracts international investment firms and fund managers. The country’s government and regulator are actively promoting policies aimed at attracting such companies, making Lithuania one of the most attractive jurisdictions for investment advisers and managers seeking to enter the European market.

Lithuania investment fund taxation

VAT in this jurisdiction applies to any business at the same rate of 21%; in some cases this figure can be reduced to 9% -0%. The social security contribution is 40% and is deducted from employees’ salaries.

Lithuania fund administration and opening: support from our company

Our firm provides comprehensive legal advice to foreign individuals and companies who plan to do business in Lithuania and want to obtain a license to manage an investment fund. We offer comprehensive support at all stages of the licensing process, from document preparation to interaction with regulatory authorities. Our specialists will provide solutions to any legal issues and help you implement your tasks as efficiently and quickly as possible.

Lithuania provides favorable conditions for the creation and management of investment funds. Thanks to the support of the Bank of Lithuania, a developed financial infrastructure and favorable EU directives, the country is becoming increasingly attractive to investment managers seeking to operate in the single European financial market. Our firm is ready to provide comprehensive legal support and help you successfully start a business in this jurisdiction. We also have many ready-made options for sale, in particular we can offer a ready-made alternative investment fund in the Czech Republic and in other countries. Contact us for advice and further steps on licensing your investment fund.

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