Modern financial infrastructure makes Lithuania one of the most attractive places to financial services providers in single European market. 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 depository services. Scandinavian banks SEB, Swedbank, DnB based in Lithuania as well as other market participants provide world-class depository, custody and brokerage services.
EU directive 2011/61/EU on Alternative Investment Fund Managers (AIFMD) allows investment management companies licenced in Lithuanian to market investment units of their investment funds to professional investors all across European market, passing fast and easy notification procedure in every EU member-state.
EU directive 2009/65/EC on the Coordination of Laws, Regulations and Administrative Provisions Relating to Undertakings for Collective Investment in Transferable Securities (UCITS) allows investment managers licenced in Lithuania to offer their investment funds to all the investors passing registration procedure in their home countries.
Investment management companies registered in Lithuania, licensed under AIFMD directive are allowed to incorporate and manage investment funds registered in other EU member-states. For instance, management company registered in Lithuania can manage investment funds registered in prestigious jurisdictions like UK or Luxembourg, keeping assets of the fund in UK depository and use services of UK based brokers or investment advisors to distribute funds. This creates safe, efficient and cost effective pan-European investment management vehicle designed for professional investors.
Lithuanian regulation allows fund managers reside outside Lithuania allowing them to be near their clients all the time. Alternatively, there is an option to employ fund managers in the representative office of Lithuanian management company in their home country.
Possibility to outsource relatively cheap NAV calculation, investor’s relations or other managerial functions from local service providers in Lithuania gives strong competitive advantage.
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 behavior and significantly lower finance institution incorporation, licensing and maintenance costs makes Lithuania preferred jurisdiction for the investment management business from around the world.
The minimum capital requirement for investment management company starts from EUR 125 000.
The reasons why Lithuania is one of the top jurisdictions in EU for Management Companies and Investment Funds licensing:
– Fast licensing process. Issue of the license within period of 3 months and even faster.
– 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.
– Startup visa. Special visas for the citizens of non-EU/EEA countries running innovative businesses in Lithuania.
ECOVIS International is a leading global consulting firm having over 4,500 professionals operating in over 65 countries. ECOVIS ProventusLaw is Lithuanian member firm of ECOVIS International. ECOVIS ProventusLaw experience starts from the incorporation and licensing of the first Lithuanian modern investment fund NSEL 30 Index fund and Fund’s Management Company 15 year ago. We licensed first Lithuanian specialized US securities investment fund – ZPR US Small Cap Value Fund. Currently ECOVIS advice local and international investors seeking licensing for their investment management activities in European market.
More about FinTech licensing – www.ecovis.lt/fintech
More about ECOVIS experience – http://ecovis.lt/fintech/why-lithuania/