Which jurisdiction is best suited for obtaining a crypto license?

Many have managed to appreciate the benefits of using blockchain technologies, so it is not surprising that every year, more and more organizations use crypto. Crypto Regulations in Lithuania are much better than in other countries, which is why many companies seek permission to work in this jurisdiction.

Last changes

Previously, the government offered crypto companies to obtain 2 types of licenses for exchanges and wallets separately. Now the authorities have decided to combine them into one single license.

In addition, the rules regarding compliance with the KYC/AML policy have also changed. Licensed companies cannot maintain anonymous accounts and must check all accounts more carefully to ensure they are not serving fraudsters or people involved in money laundering.

The changes will also affect the minimum amount of the authorized capital. Previously, this was only 2,500 euros, but now the government wants to increase this to 125,000 euros. Earlier, this jurisdiction issued a license to both large companies and small start-ups, but now this opportunity will be limited.

In addition, now in your company, one of the top managers must have been a citizen of this jurisdiction. It should simplify communication between the company and government agencies.

These amendments come into effect in November 2022, and from February 1, 2023, regulators will publicly disclose the list of companies that operate legally in this jurisdiction. It will ensure greater market transparency.

Why do companies choose this jurisdiction?

Interest in cryptocurrency in Lithuania is growing at a fast pace. This country has become a major European financial center, as small start-ups and large corporations operate here.

Very soft crypto regulations apply here, making this jurisdiction attractive to large companies. As you know, there are specific tax incentives for small companies.

The number of companies that want to obtain a license in this jurisdiction is snowballing, especially against the fact that Estonia has tightened the requirements for getting a permit.

Do crypto organizations have to pay taxes?

Every company is required to pay taxes regularly. Quite simple taxation rules apply in this jurisdiction – tax on dividends – 15% and income tax – 15%.

The country’s government is interested in developing small and medium-sized businesses, so if the company employs up to 10 people and the annual gross income is up to 300 thousand euros, you must pay only 5% income tax.

In addition, exchange services are not subject to VAT.

How difficult is it to get a license in this jurisdiction?

If you want to get a Lithuania crypto permit, then there will be no big problems with this.

Both businessmen from this country and foreigners can register a company here. However, the company itself must be registered in that country. Recent changes in legislation say that the director of the company must have the citizenship of this jurisdiction.

Particular attention should be paid to compliance with KYC and AML policies, but we will talk about this in more detail below.

What papers need to be prepared?

To obtain a license, you must collect a large document package. For individuals and legal entities, this list is different.

Private individuals need to prepare a copy of their passports. This must first be certified by a notary. A bank statement or utility bill can serve as proof of address. It will also be good if you provide documents on education. All documents must be in Lithuanian. If you are a resident of another country, you must provide documents in two versions – copies of the original and the translation.

Legal entities need to pay more attention to creating a business plan. All the company’s activities, profits, and costs should be included. The more realistic your business plan is, the better.

Collecting all the necessary documents is a crucial step that is best left to specialists. Our lawyers will check the list of papers and the correctness of their filling.

Basic requirements for a security specialist

As already mentioned, a security specialist should work in the state, whose duties should include monitoring the work of company employees to prevent fraud and money laundering on their part. Also, specialists must create reports on the company’s activities and provide the necessary information to government agencies.

The choice of such a specialist must be given a lot of time. This person must live in this jurisdiction and have a specialized higher education and work experience in this field. This person must have an excellent reputation.

An AML specialist can be a company shareholder but cannot be an owner.

A simple guide to obtaining a work permit

To obtain a work permit, you need to go through several necessary steps:

  • Register a company in this jurisdiction;
  • Open an account with a local bank;
  • Pay the fees;
  • Check how your company meets the requirements of the regulator;
  • Apply for a license.

Before registering a company, you need to decide on a business model and consider what services you plan to provide.

Developing good software and creating a well-thought-out business plan are also necessary. You can register a company remotely, which takes an average of 5 days.

After registering a company, you need to open an account in a local bank and deposit the authorized capital here. Money must be credited to the account in one payment. Also, at this stage, you must pay the state fee. The amount of this is fixed for all companies.

Terms of receipt of the document and how much does it cost?

On average, it takes about a month to get a license – several days to register a company and check whether it meets all the requirements, and 2 weeks for government agencies to consider your application. You can obtain a work permit in this jurisdiction faster than in any other foreign country.

If state bodies find document errors, they give 2 months to eliminate them.

The cost of obtaining a license is calculated for each client individually. It includes required payments (authorized capital and duty) and additional services our company provides.

You can write a power of attorney for our specialists, and your participation in obtaining a license will be reduced to a minimum. Still, if you want to save money, you can look for the office or employees of the company yourself.

Our experts will tell you what you need to pay attention to, first of all, what additional services you should order and what problems your organization may face.

AML/KYC Policy 

As already mentioned, your company must adhere to the AML / KYC policy, but only some understand.

Your organization must carefully check each client and has no right to provide services to people who have been involved in fraud or money laundering. In addition, before you register a company, you must assess the risks.

You must prepare the relevant documents to confirm that you have considered all the risks. To do this, you need to seek the help of specialized lawyers. They will help to assess the risks and help prepare the paperwork correctly.

Government authorities pay a lot of attention to compliance with this policy, so this aspect must be crucial to avoid problems with Lithuanian cryptocurrency regulation.

Can a company lose its license?

A license is issued indefinitely, but you can still retain it if government authorities suspect you of fraud, money laundering, or terrorist financing. In the future, you will not be able to obtain a work permit again in any jurisdiction.

Conclusion

Obtaining a work permit is a critical step in the mind of any crypto organization. Thanks to this, you can not be afraid of problems with government agencies, and you can also work successfully and attract new investments and a large number of customers. Since obtaining a license is a complex process, you need the help of professionals.

FAQ

Yes, this jurisdiction has the most straightforward and convenient rules for regulating the crypto industry among all EU countries, so many companies seek permission to work in this jurisdiction.

Yes, every crypto company is required to pay taxes. Their size depends on the size of the commission. Above, we have described the terms of taxation

To make it easier for you to obtain a work permit, it is better to seek help from lawyers who will conduct a full consultation and help you collect the necessary documents.

Cryptocurrencies cannot be used for fraud, money laundering, or financial terrorism.