In Lithuania, a PSP permission is required to operate a remittance service biz. The PSP permission is issued by the Bank of Lithuania, which is the country’s central bank and monetary regulator. The permission is needed for businesses that supply payment favors such as remittance processing, remittance initiation, and money transmissions.
Requirements for PSP license
- Minimum fund demand: A minimum fund requirement of €20,000 must be met by the applicant. This capital must be sufficient to cover the initial operational costs of the payment favors provider and must be maintained throughout the duration of the license.
- Fit and proper criteria: The company’s owners, directors, and key personnel must meet the fit and proper criteria as set out in the Law on Payments, E-Money and Payment Institutions. The criteria include having corresponding qualifications, experience, and good reputation in the monetary industry.
- Anti-money laundering and counter-terrorism financing: The applicant must have appropriate procedures in place to prevent money laundering and terrorism financing, in conformity with the requirements of the Law on Payments, E-Money and Remittance Institutions and the Anti-Money Laundering and Counter-Terrorism Financing Act.
- Business plan: The applicant must submit a business plan that outlines the nature of the remittance favors to be supplied, the target market, pricing, marketing strategies, and projections for revenue and expenses.
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Fin-tech industry in Lithuania
Lithuania has created a favorable environment for FinTech companies, with a supportive regulatory framework, a talented workforce, and a well-developed IT infrastructure.
One of the reasons why the country has become an attractive destination for FinTech firms is due to its EU membership. The country has implemented EU directives related to remittance favors, e-money, and anti-money laundering, which has provided certainty for FinTech firms operating in Lithuania.
The Bank of Lithuania, the country’s central bank, has also created a regulatory sandbox, which allows FinTech business-companies to test their innovative products and favors in a controlled environment. This has helped to foster innovation and has provided an opportunity for FinTech companies to develop and refine their offerings before launching them to the market.
How to get psp license in Lithuania
To acquire a PSP permit in Lithuania, the next steps must be taken:
- Establish a firm: The first step is to establish a firm in Lithuania. The firm must be enrolled with the Lithuanian Register of Legal Entities and have a registered office in the country.
- Meet the eligibility criteria: The firm must meet the eligibility criteria set out in the Law on Remittance, E-Money and Payment Establishments. This includes having a minimum capital requirement of €20,000 and being able to demonstrate that the company’s owners, directors, and key personnel are fit and proper to operate a payment service business.
- Submit an application: The business-company must submit an request for a PSP permission to the Bank of Lithuania. The request must include info about the company’s ownership structure, government, business plan, and internal control procedures. The request must also include evidence of conformity with anti-money laundering and counter-terrorism financing adjustments.
- Pay the request fee: A non-refundable request fee must be paid to the Bank of Lithuania at the time of presentation the request.
- Wait for approval: The Bank will review the request and may request additional info or documentation. Once the request is approved, the business-company will be issued with a PSP license.
Once a PSP license has been granted, the firm must continue to comply with the regulatory demands set out in the Law on Payments, Electronic Money and Payment Institutions. This includes regular reporting to the Bank of Lithuania, compliance with anti-money laundering and counter-terrorism financing adjustments, and maintaining adequate systems and controls to manage risk.
Failure to comply with the regulatory demands can result in fines, penalties, or the revocation of the PSP permission. It is therefore important for remittance service providers to ensure that they are fully compliant with all regulatory requirements at all times.