PAYMENT INSTITUTION

Perfect solution for pan-European payment processing. Equity capital – from EUR 20 000 to EUR 125 000. Licensing time – up to 3 months.

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Photo by Invest Lithuania

Licensed Payment Institution is a perfect solution for Fintech companies and start-ups processing payments or money transfers of private individuals, internet payments, payment solutions for internet shops all around Europe. EU Payment Services Directive adopted in 2007 provides the legal foundation to European single market for payments.

Licensed Payment institution is permited to provide following payment services:

– services enabling cash to be placed on a payment account (including all the operations required for operating a payment account).

– services enabling cash withdrawals from a payment account (including all the operations required for operating a payment account).

– execution of payment transactions, including transfers of funds on a payment account with the payment service provider of the payment service user or with another payment service provider: execution of direct debits, including one-off direct debits, execution of payment transactions through a payment card or a similar device and/or execution of credit transfers, including standing orders.

– execution of payment transactions where the funds are covered by a credit line for a payment service user: execution of direct debits, including one-off direct debits, execution of payment transactions through a payment card or a similar device and/or execution of credit transfers, including standing orders.

– issuing and/or acquiring of payment instruments.

– money transfers.

– execution of payment transactions where the consent of the payer to execute a payment transaction is given by means of any telecommunications terminal equipment, digital or IT device and the payment is made to the telecommunications network or IT system operator, acting only as an intermediary between the supplier of the goods or services and the payment service user.

Payment Institution licensing in one of the member states within the European Union opens up business opportunities to act and provide services in all other EU/EEA countries, enjoy benefits of a Common Market without any restrictions and advantages of Single Euro Payments Area (SEPA).

SEPA – 500 million citizens, over 20 million businesses and European public authorities making and receiving payments in Euro at a low cost, under the same basic conditions, rights and obligations, regardless of their location in Europe. SEPA allows arranging electronic credit transfers and direct debits in Euro zone at a low cost just as easy as at home.

Payment Institution or other Fintech company registered in Lithuania provides significant competitive advantage and opens up European financial market at significantly lower incorporation and operational costs. Lithuania and primarily its capital Vilnius became a new hub for the Fintech companies focused on international financial markets. Favourable regulatory and tax environment, excellent infrastructure, fastest internet and quality talent pool makes Lithuania and primarily its capital Vilnius attractive to large international finance institutions as well as Fintech start-ups.

The reasons why Lithuania is top jurisdiction in EU/EEA for Payment Institution licensing:

– No particular requirement for company management to reside in Lithuania.

– Application for a license submitted without establishing a company. Incorporation of a company starts only after the license granted.

– Fast licensing process. Issuing of Payment institution license within a period of 3 months or even faster.

– Documents can be submitted in English and amended “on the go” instead of formal writing forth and back.

– Possibility to get own sorting codes for IBAN accounts for the clients. The Bank of Lithuania creates an infrastructure for instant payments that according to European Instant Payments Initiative will guarantee pan-European reach.

– Non-banks have a direct access to SEPA. SEPA-MMS is the pan-European retail payment system managed by the Bank of Lithuania.

– Remote client verification. Innovative “know your customer” processes for remote client verification allows to open the accounts without physical presence of the client.

– Easy license passporting to other EU jurisdictions. The passporting to other EU countries takes 1 month and is free of charge.

– No sanctions for the first year. The Bank of Lithuania is committed to support start-ups and not to issue punishment for minor infringements during the first year of operation.

– Start-up visa. Special visas for citizens of non-EU/EEA countries running innovative businesses in Lithuania.

In October, 2016 UK based leading financial services provider REVOLUT and the Bank of Lithuania signed a memorandum of understanding. REVOLUT is planning to establish a financial institution in Lithuania and gain access to a SEPA MMS payment system, managed by the Bank of Lithuania, ensuring cross-border payments in Euro.

In March, 2017 the Bank of Lithuania issued a license for global financial group deVere Group, present in 60 countries around the world. deVere e-money starts its global electronic money _jbm2220 - Copybusiness from Vilnius office, using SEPA MMS system and issue of prepaid cards for their global costumers. ECOVIS provided legal advice to deVere Group throughout the licensing process.

The Bank of Lithuania combines the functions of a central bank and the financial supervisory authority (regulator). Regulatory behaviour and significantly lower finance institution incorporation, licensing and maintenance costs is what makes Lithuania preferred jurisdiction for the finance business people from around the world.

More about FinTech licensing – www.ecovis.lt/fintech

More about ECOVIS experience – http://ecovis.lt/fintech/why-lithuania/

Contact person:

Inga Karulaitytė – Kvainauskienė