To provide regulated payment services in Lithuania, formal registration is required. Strict adherence to the Payment Services Directive 2 and other EU laws is mandatory for the receipt, transfer, and settlement of customer funds.
Lithuania has emerged as a major financial technology hub in Europe. A favourable climate for the start-up and expansion of digital service enterprises is created by A well-organised regulatory framework Expedited approval processes Collaborative ties with regulatory organisations.
A payment system registration in Lithuania provides access to a single EU market. The approval has legal force across the Eurozone and opens up new opportunities for businesses, including both new businesses and long-standing industry players. This strategy is especially beneficial for multinational projects that aim to expand throughout Europe. The growing demand for Lithuania’s payment system licenses reflects the global shift to distant transactions and digital banking.
Harmonised regulations, swift processing durations, and efficacious collaboration with oversight bodies contribute to Lithuania's reputation as a distinguished regional jurisdiction for financial technology.
Business founders and investors perceive Lithuania as a central point within the Euro market. They utilise it to establish payment infrastructures that conform to EU stipulations. Payment service providers can operate in over 30 countries with a technologically flexible and legally solid framework thanks to Lithuanian jurisdiction.
The procedure for obtaining authorisation to provide payment services within Lithuania is described in this simple guide. The information covers the main stages, necessary requirements, legal requirements, and relevant components of the application package.
Our guide will help you:
- Register a payment service.
- Reduce legal risks
- Develop a sustained digital business.
Lithuania: economic context for launching digital payment services
Lithuania's strong position in the international regulatory arena, free capital flow, and a high level of legal predictability are highlighted by its membership in the EU, NATO, OECD, and WTO.
Today’s Lithuanian economy presents a compact yet robust European-style model that prioritizes technological advancement, exports, and financial services. In 2024, the nation's gross domestic product (GDP) experienced a 2.2% increase.
The government anticipates an annual growth of 3% throughout 2025-2026. These figures showcase macroeconomic stability and strong confidence in national policy.
Lithuanian national legislation fully complies with European Union regulations for acquiring payment service licenses. The business climate in Lithuania presents a promising outlook for global investors.
Furthermore, the government is actively promoting a digitalisation strategy by supporting export-focused initiatives and offering tax advantages to tech-focused companies. This establishes a favourn and growth. This action reflects an investment in a corporate structure that can expand, combining practical regulations, wider international opportunities, and support for internet services.able environment for expansion and investment within the digital sector.
Key advantages:
- Lithuania benefits from an expedited and streamlined process for granting payment system licences. Applications are reviewed by the regulatory agency, which typically takes three to six months to complete.
- The Lithuanian PI payment institution licence acquisition ensures easy access to the wider EU market, which includes a customer base of more than 450 million people.
- Complete alignment with European regulations, specifically PSD2 and AMLD, is mandated to ensure adherence to international standards.
- A modern business infrastructure is in place, including electronic filing systems and adaptable IT networks.
- Controlled inflation, a transparent financial system, and the Euro currency all demonstrate economic and monetary stability.
- A transparent tax policy encourages exports and technological and financial breakthroughs.
The payment system permit in Lithuania formally creates corporate operations and provides access to an economy that encourages innovatio
Legal framework for payment licences issuance in Lithuania
The primary provision that initiates payments in Lithuania is authorised by the Law on Payment Institutions (Mokėjimo įstaigų įstatymas). This law Outlines requirements for funds, ownership, and internal administration Explains the legal status of payment processors Outlines the procedure for registering an online platform.
The licensing procedure for maintaining payment services in Lithuania is governed by strong clauses. The legal structure, which complies with EU regulations, is as transparent as possible and includes the following laws:
- The Law on Payments
- The Financial Instruments Markets Law
- The laws to stop money laundering and the funding of terrorism
- The Civil Code
Regulatory agencies
The Bank of Lithuania is one of the primary regulatory bodies responsible for authorising, regulating, and overseeing digital payment service providers. The Bank
- Evaluates the documentation
- Establishes guidelines for IT personnel and systems.
- Monitors adherence to anti-money laundering regulations in general.
- Verifies potential payment institutions' financing sources.
The Lithuanian Service for Financial Crime Investigation is the monitoring organisation responsible for monitoring money transactions and handling any violations.
International Standards and Regulations
The Payment Services Directive 2 is a key piece of legislation that connects Lithuanian licence issuance to EU laws. PSD2 is a regulatory framework:
- Payment infrastructure
- API access and fund transfers
- Standards for user identity verification.
Following PSD2, Lithuania enforces AMLD IV, V, and VI, requiring payment platforms to conduct thorough customer checks, put internal procedures in place, and submit regular reports.
A strong system against money laundering is created by this adherence, which is in line with guidelines from the European Central Bank, standards from the European Banking Authority, and suggestions from the Financial Action Task Force.
Types of Services Requiring Authorization
A Lithuanian payment system licence permits specific services as defined by the rules. Carrying out these activities without the necessary approval is illegal:
- A digital payment service provider in Lithuania must handle current accounts, which include processing deposits and withdrawals and account maintenance, in order to assist customers and manage their money.
- Transfers within and outside the system: this covers all types of money transfers between accounts, including card transactions, direct debits, and one-time and recurring financial operations, irrespective of the service provider.
- Extending Credit in Payment Activities: An overdraft is a short-term access to funds from a Lithuanian payment processing business that is also regarded as a payment service. Transactions that include setting users' credit limits and their ensuing payments are included.
- A variety of payment methods, including payment cards, can be issued thanks to the Lithuanian payment system licence. The framework enables users to collect payments via a range of point-of-sale devices and internet platforms. These essential financial service operations are made possible by this regulatory framework, which covers both the processing of incoming transactions and the provision of electronic payment tools.
- Services for money transfers without account opening, such as peer-to-peer, bulk, and rapid transactions, enable fund transfers for payers who do not have accounts with the supplier.
- Payment initiation services, or PIS for short, use the bank's interface to handle transactions on a client's behalf. After PSD2, the feature was added, and when enrolling for the Lithuanian payment system, it requires specific permission.
- Account Information Services (AIS) allow providers access to bank-held transaction history, balances, and other customer data, requiring a separate AIS licence that does not permit payment processing. These constitute key functionalities requiring licensing.
Key Prerequisites for Licensing
To secure authorization for a payment system within Lithuania, prospective entities must satisfy several fundamental criteria. These encompass their legal structure, internal governance, financial resources, oversight mechanisms, and technological infrastructure.
Depending on the precise range of payment services desired, different minimum capital reserves are required:
- The necessary capital for companies that just transmit money is €20,000.
- €50,000 in capital is needed to provide payment initiation services.
- Offering a full range of services, such as deposits, withdrawals, accounts, transfers, card processing, and merchant acquisition, requires a capital of €125,000.
To obtain a Lithuanian secure payment system licence, a company must register with the European Economic Area. The UAB structure, which is a private limited company under Lithuanian law and makes management, share distribution, and investor attraction easier, is a popular option.
Bank statements attesting to your claimed capital will be requested by the regulators. Importantly, for all official correspondence, you must also have a registered legal address in Lithuania.
When you apply, the people in control will be vetted based on their roles. The regulators will closely look at their backgrounds, the company's structure, and who owns what in order to make sure there are no hidden hands. Your eligibility for a Lithuanian payment system licence is greatly influenced by all of this.
It is also necessary to have a thorough business plan that details your activities, costs, target market, and three-year financial projections. You need to show that you have a clear plan for getting started and that you are financially secure.
Your business plan should contain more than just statistics; it should also detail your staff, your digital communication strategy, your growth ambitions, and your plans for allocating resources. To get a payment system licence in Lithuania, you have to show that you have a feasible, reasonable strategy that conforms to the rules.
Regarding compliance, you must describe your internal procedures for determining the source of funds, your approach to transaction monitoring, and your anti-money laundering initiatives. Additionally, they will want to see your data storage, KYC processes, internal control, and client complaint handling.
Regulators demand that risk management be fully integrated into every facet of your company. This necessitates having a compliance officer on staff, having clear monitoring protocols, and having the ability to handle new threats. If you don't have an appropriate, documented risk management framework, you will not be given a Lithuanian payment system licence.
Its supporting digital and financial infrastructure needs to be robust against disturbances, adhere to stringent security regulations, and ensure user data protection. The technology architecture should incorporate cybersecurity protections, event recording, data archiving, and a stable server environment design.
The technical documentation should provide specific solutions for connectivity with external APIs, storage systems, event filtering, and disaster recovery protocols. The Bank of Lithuania will review your platform's well-designed and automated features. Getting a payment services licence there requires total dependability, which is necessary for managing client dosh. Let's now discuss the paperwork needed to submit an application for a payment licence in Lithuania.
Required documentation to apply for a payment licence in Lithuania
To demonstrate their legality, dependability, and readiness to conduct fund transfer operations, the prospective licensee must collect a set of necessary documents:
- To apply, candidates must fill out the Bank of Lithuania's online application form, which includes information about the company's services, chosen licensing type, and corporate management team.
- Corporate records, including incorporation papers, the official establishment certificate in Lithuania, the registered company address, and ownership details, are required to verify the entity's legal registration within the EU.
- A business plan that includes information on target markets, consumer demographics, and important financial KPIs must be included in the operational blueprint, along with the development strategy, three-year forecasts, and financial predictions.
- A statement or certification confirming that you have made the required financial transfers to your business account, together with information verifying the source of those funds.
Information on the ultimate beneficial owners and directors, including their employment histories and credentials. All relevant parties must meet the 'Fit and Proper' standards.
Internal operating processes should include control tools to trace transactions, confirm the source of funds, and prevent financial irregularities through (1) anti-money laundering and (2) counter-terrorism funding methods. This section should also include a description of the compliance department's responsibilities and organisational structure.
A successful application for a Lithuanian payment services licence depends on the reliability, comprehensiveness, and logical coherence of these documents.
Contact our experts and get answers to your questions.
Licensing phases
Acquiring a payment system authorisation in Lithuania is a clear and open process that is conducted under the rules set forth by the Bank of Lithuania.
You must set up a registered office in Lithuania if you are a private limited liability corporation (UAB). You can use this UAB structure to carry out restricted fund transfers in accordance with EU legislation after you get the necessary license. You will also need to open a bank account with a Lithuanian or European financial institution in order to deposit the legally needed capital.
This phase entails properly arranging the documentation. This includes the actual application form, internal operating procedures, incorporation paperwork, a business plan, proof of required funding, personnel information, and business setup details. The information must be arranged in accordance with the regulations and presented in either Lithuanian or English. If any original documents are in a different language, a certified translation with the translator's signature and official stamp must be supplied.
Your application for a Lithuanian payment system licence must be reviewed in the 'Submission of papers' part of the 'E-gate system' after you have registered online. Within five working days, the Bank of Lithuania will then confirm that you have completed it accurately and included all necessary information. If everything is in order, they will forward your application for a complete examination.
The Bank of Lithuania will carefully review your proposals' organisational, technological, legal, and financial aspects. They might ask for further details or explanation on specific topics to allay any concerns they might have, which could take some extra time.
After the document analysis is complete and all requested clarifications have been answered, the Bank of Lithuania decides whether to grant or reject a payment system licence in Lithuania. The final decision is made by the board of the regulating organisation. Rejections typically occur when there are significant discrepancies or when not enough information is supplied.
Timeline and costs
A payment system licence in Lithuania is granted via a formal process that includes deadlines and a certain fee set by the government.
Average time spent applying for a licence to use the Lithuanian payment system
|
Stage |
Average duration |
|
Company setup (UAB) |
5–10 working days |
|
Document preparation |
4–6 weeks |
|
Application submission and acceptance |
Up to 5 working days |
|
Application review and negotiations with the regulator |
From 2.5 to 4 months |
|
Timeframe for obtaining the licence |
From 3 to 6 months |
It takes two months to obtain a Lithuanian payment licence that only grants access to account information; complex situations usually require an extra two months. Among the costs associated with the acquisition are the state obligation, legal counsel, corporate strategy development, and communication fees with the Bank of Lithuania.
- The typical permit application fee is EUR 898. If your operations are a little more limited, like just accessing account information, you will pay a discounted price of EUR 693, and in some cases, EUR 682.
- It can range from EUR 20,000 to EUR 125,000, depending on the services you plan to offer.
- The cost of hiring solicitors, accountants, and specialists to manage your application ranges from EUR 5,000 to EUR 15,000.
- Right then. IT and technical documentation covering subjects like security setups and disaster recovery plans should cost you between EUR 3,000 and EUR 10,000.
If all the relevant documentation is in order, the complete process of acquiring a Payment Institution licence in Lithuania, including the requisite fees and minimum capital, could take three to four months. For more complicated operations with all the bells and whistles, the total cost may be as much as EUR 150,000. Now let's discuss the payment services tax in Lithuania.
Payment services’ taxation in Lithuania
The internal fiscal laws of Lithuania offer a strong argument to organisations considering a payment system authorisation application because of their predictable rates, existing incentives, and thorough compliance with international agreements.
The standard corporate tax rate in Lithuania is sixteen percent, and it will go into effect in 2025. This fee is imposed to all taxable earnings, whether they are earned in Lithuania or somewhere else, depending on whether the firm has domestic tax residency.
Smaller firms, including new financial and technological initiatives, are entitled for a zero percent rate in their first year of operation. A six percent rate is then imposed beginning in 2025, as long as the company's annual revenue remains below three hundred thousand euros and it has no more than ten employees.
Payment service providers and other credit organisations with annual revenue over two million euros are subject to a 21 percent charge, which combines the standard 16 percent with an additional 5 percent.
The bulk of goods and services are subject to a 21% tax, except for transactions that are specifically exempt by law. Generally speaking, VAT does not apply to financial services, which typically include payment processing services. Although these businesses do not charge VAT to their clients, they are unable to recoup input VAT on costs such as marketing or IT.
Transactions subject to VAT are subject to reduced rates of 9.5% or a zero tax for exports to non-EU states.
- Research & development costs can be subtracted from the usual tax burden by a ratio of three, but the profits from patented discoveries are taxed at a rate of six percent.
- Gains up to 100% of the investment purchase price may be deductible in relation to investment programs.
- Zones of Free Economy: Businesses that meet the standards for capital, income, and personnel are exempt from corporation tax for ten years, after which the standard sixteen percent rate is substituted with an eight percent rate.
Actions after obtaining the licence
As soon as the Lithuanian payment system receives a licence, legal operations begin.
Upon approval, applicants fulfil the long-term requirements set by the regulator. Failure to abide by these terms may result in the suspension or revocation of authorisation.
The aforementioned organisation must certify the start date of its operations with the Bank of Lithuania after being authorised to operate in the financial market. This formal statement is an essential step to ensure that the company is recognised as a valid supplier of payment services.
After operations begin, the aforementioned operator will be continuously supervised by the authorities. The following conditions should be met:
- Regular reporting on operational financial indicators, internal audit, and regulatory compliance
- Configuring transaction anomaly checks, customer verification procedures, and AML/KYC identification systems
- The appointment of a financial fraud prevention officer (MLRO)
- Compliance with the storage of documents, transaction logs, and client data.
By creating separate bank accounts or putting the money in regulator-approved insurance or guarantee systems, the business can keep consumer money apart from its own.
Every component of the e-payment platform needs to operate safely and dependably.
Required steps:
- Upkeep of IT infrastructure
- Protection against failure and backup
- Continuous evaluation of risk and vulnerability
- Adherence to cybersecurity safeguards.
After the payment system is registered in Lithuania, the regulator has the authority to carry out both scheduled and ad hoc inspections. It is necessary to:
- Respond to questions from the Bank of Lithuania
- As needed, provide more information
- Report on authorised structural, managerial, or both types of modifications to corporate capital.
Following the approval, ensure everything proceeds as planned and adhere to the rules.
Your primary priorities should be keeping an eye on your users, reporting to the appropriate authorities, and following operating guidelines. They are all covered by EU law and are necessary to create a solid and respectable business as a payment institution in Lithuania.
Final notes
Getting a payment operator licence in Lithuania is essential to your ability to access the EU market for consistent, legal operations.
Establishing your company, organising the paperwork, corresponding with the authorities, and confirming the services you intend to offer are all part of the process.
Following reporting regulations, safeguarding client assets, and maintaining technological stability after receiving your licence are essential if you want to ensure that you're operating legally and can grow sustainably inside the European financial market.
In addition to assessing your ideas, our specialists will draft documentation, communicate with the regulator, and provide follow-up help as part of our comprehensive legal aid.
We make sure you're following the law, minimise potential hazards, and set up your business properly.
Would you like a quote for establishing a legitimate and long-lasting payment system in Lithuania?
We are available to assist you!
Our telegram channel
