EU Directive 2004/39/EC on Markets in Financial Instruments Directive (MiFID or MiFID I) allows securities brokers and foreign exchange (Forex) service providers, who are licenced in Lithuania, to offer their services all across single European market. According to EU laws, MiFID provides coherent regulation of all financial investment services between all European Union (EU) and European Economic Area (EEA) member states.
MiFID licensed Lithuanian Brokerage and Forex companies are allowed provide services to the clients in any other EU member-states, including big markets such as UK, Germany and France, without any additional licensing. License passporting procedure is very simple and takes one month. Regulators from other EU member-states are not allowed to implement any additional restrictions for MiFID licensed companies. Services in other jurisdictions may be provided directly, through registered subsidiary or through the agent (legal entity).
Lithuanian regulation allows CEO of the company, dealers and brokers to reside outside Lithuania enabling them to be near their clients. Alternatively, dealers and brokers can be employed in the subsidiary or agent of the Lithuanian company in their home country in other EU jurisdiction.
Companies licensed in Lithuania are allowed to be direct members of the stock exchanges, depositories and clearinghouses registered in any other EU jurisdiction without any restrictions. This creates safe, efficient and cost effective pan-European investment advisory, securities brokerage or Forex dealing vehicle. Modern financial infrastructure makes Lithuania one of the most attractive places to securities brokers and Forex dealers in single European market.
Companies licensed in Lithuania are allowed to be direct members of the stock exchanges, depositories and clearinghouses registered in any other EU jurisdiction without any restrictions.
Creator of the world’s first electronic stock market Nasdaq has a strong presence in Lithuania and Baltics establishing Nasdaq Technology and Business Support Competence Center in Vilnius. Nasdaq Stock Exchanges in Tallinn, Riga and Vilnius form the Baltic Market, the core idea of which is to minimize the differences between the markets in order to facilitate cross-border trading. Central Securities Depository of Lithuania, Latvian and Estonian Central Securities Depositories are also owned by Nasdaq and providing high-level central depository services.
Scandinavian banks SEB, Swedbank and DnB based in Lithuania as well as other local service providers provide world-class depository and custody services. Possibility to outsource relatively cheap bookkeeping and other services from the local service providers in Lithuania gives strong competitive advantage comparing to other European jurisdictions.
The Bank of Lithuania combines the functions of a central bank and the financial supervisory authority (regulator) in Lithuania. The regulator came out from the watchdog’s role, committed to consult and support newly established companies and not punish them during the first year of operation for minor infringements. Such regulatory behaviour and significantly lower finance institution incorporation, licensing and maintenance costs makes Lithuania preferred jurisdiction for the investment advisors, fund managers, stockbrokers and Forex dealers from around the world.
The regulator came out from the watchdog’s role, committed to consult and support newly established companies and not punish them during the first year of operation for minor infringements.
The reasons why Lithuania is one of the top jurisdictions in EU for Brokerage and Forex companies licensing:
– Fast licensing process. Issue of the license within period of 3 months and even faster.
– Fast and easy license passporting procedure to any other EU member-state.
– The minimum capital requirement for the company starts from EUR 125 000.
– No particular requirement for company management to reside in Lithuania.
– The documents can be submitted in English and amended “on the go” instead of formal writing forth and back.
– No sanctions for the first year. The Bank of Lithuania is committed to support newly incorporated companies and not to punish them during the first year of operation for minor infringements.
– Start-up visa. Special visas for the citizens of non-EU/EEA countries running innovative businesses in Lithuania.
– Possibility to be the direct members of stock exchanges, depositories and clearinghouses in any other EU jurisdiction.