Crowdfunding license in Lithuania

Execute your plan to obtain a crowdfunding license in Lithuania with our assistance, ensuring an efficient and unhindered access for your investment business to the progressive European financial services market.

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Realize your potential and become a leader in the European collective investment industry. Begin your journey to obtaining a crowdfunding license in the European Union today – contact Eesti Firma for the first step towards international success.

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Unlock Opportunities with a Crowdfunding License in Lithuania

In recent years, crowdfunding has gained increasing popularity as an innovative and accessible method of financing various projects and startups, opening new horizons for entrepreneurs and investors across the European Union.

What is Crowdfunding?

Crowdfunding is the process of raising financial funds to support projects from a wide audience, predominantly through online platforms. This method allows individuals, startups, and small to medium-sized enterprises to attract capital, not from traditional investors, but from the public. Participants in crowdfunding, contributing funds, can receive various rewards in return, from souvenirs to shares in the project, depending on the terms of financing.

How Collective Funding is Changing European Financial Markets

Collective fundraising in the EU is not just a new financial instrument but also reflects broader social and economic changes associated with digitalization and democratization of financial markets. This movement opens doors for a wide range of entrepreneurs and innovative startups, providing them with the opportunity to realize their ideas and projects with public support.


Development of the Collective Fundraising Industry in the EU: Regulation 2020/1503

In response to the growing number of successful crowdfunding campaigns and increasing interest in this area, the European Union is actively working on creating a favorable and regulated environment for collective investing. A major step in this direction is the introduction of Regulation (EU) 2020/1503, which includes requirements for the licensing of crowdfunding platforms.

Licensing of Crowdfunding Platforms in the European Union

Licensing is an important element in ensuring transparency, security, and reliability in the field of fundraising. This requirement ensures that collective investing platforms meet strict standards in risk management, user data protection, and providing fair conditions for all participants. Thus, licensing contributes to increasing trust in crowdfunding platforms among investors and entrepreneurs, which in turn promotes further development and growth of this sector in the European Union.

Crowdfunding Service Provider is a company or platform that provides the necessary infrastructure for conducting crowdfunding campaigns. These organizations offer a wide range of services, including the development and support of web platforms for fundraising, payment processing, marketing support, and project management consultations.

Crowdfunding License in Lithuania: Your Key to Success in Europe

On this page, we will take a detailed look at the process of obtaining a crowdfunding license in Lithuania, which in recent years has established itself as one of the most favorable and attractive countries for fintech companies and innovative startups in Europe. Unique conditions for the development of collective funding have been created here, including progressive legislation and support for fintech initiatives. In our review, we will thoroughly examine the key aspects and advantages of obtaining a crowdfunding license in Lithuania, discussing how it can contribute to the growth and success of your business within the European Union.


Understanding Lithuanian Collective Funding Legislation and Compliance

Embarking on the journey to apply for a Crowdfunding License in Lithuania can be a pivotal step for your business. This comprehensive guide is designed to walk you through the meticulous process set by the Bank of Lithuania. From the careful evaluation of application documents to understanding the defined timelines for licensing, we cover every aspect of this crucial procedure.

Navigating the Path to a Crowdfunding License in Lithuania

You will learn about the importance of submitting a complete and well-prepared application, the detailed evaluation process by specialists, and the proactive communication approach adopted by the Bank of Lithuania to facilitate a smooth licensing process. We also delve into the financial aspects, highlighting the license fee payment to the State Tax Inspectorate and providing guidance on expanding your services across the European Union.

Lithuania’s Crowdfunding Platforms: Regulation 2020/1503 Comes into Effect

Starting from November 10, 2023, only licensed Crowdfunding Platforms (CSPs) as per Article 12 of the Regulation 2020/1503 will be operational in Lithuania. These platforms serve as intermediaries between project owners and investors, focusing strictly on business financing. This means that consumer loans, charitable fundraising, and non-financial return funding are not within their scope. The regulation specifically targets startups, medium, and small business entities, capping the maximum funding for a single project at 5 million Euros over a 12-month period.

Investment Dynamics in CSPs

Investing through CSPs offers flexibility and control, allowing investors to:

  • Invest both small (up to a few tens of euros) and large sums (up to several tens of thousands of euros);
  • Independently select projects for funding, determine desired returns, and manage risk levels;
  • Actively monitor and manage their investment portfolio within a CSP.

It’s crucial to note that each project must present a Key Information Document (KID), and the funds raised are strictly for business purposes, not for consumer needs.

Licensing and Operations of Crowdfunding Platforms (CSPs) in Lithuania

In Lithuania, CSPs must hold a license in accordance with Articles 12 and 18 of the Regulation to operate, as issued by the Bank of Lithuania (LB). The list of licensed CSPs supervised by the LB is publicly available on their website. A CSP license not only allows operations in Lithuania but also extends to other EU member states, given the CSP informs the licensing authority about its intentions to offer services in those states, as outlined in Article 18 of the Regulation. The European Securities and Markets Authority (ESMA) maintains a comprehensive list of licensed CSPs across member states.

Criteria for License Issuance by the Bank of Lithuania

When issuing licenses, the Bank of Lithuania rigorously evaluates the applicant’s readiness to:

  • Conduct business in line with the regulatory framework;
  • Uphold investor protection in projects.

This evaluation process includes assessing:

  • The company’s business plan and organizational structure;
  • The reputation of its management and owners;
  • Compliance with risk management requirements;
  • Suitability of the crowdfunding service for investors;
  • Credibility of project owners, including their reputation and creditworthiness;
  • Project credit score (rating) and pricing of offers;
  • Provision of individual loan portfolio management services;
  • Contractual agreements with clients;
  • Safekeeping of client assets (funds and financial instruments);
  • Conflict of interest management;
  • Operational and business continuity strategies;
  • Disclosure practices;
  • Client complaint handling mechanisms.

Special emphasis is placed on protecting investors’ interests, particularly in areas like asset safekeeping, transaction appropriateness, project owner evaluation, and conflict of interest management.

In Lithuania’s collective investing landscape, the strict regulatory standards and thorough licensing processes set by the Bank of Lithuania ensure a secure and reliable environment for investors and project owners alike. Investors enjoy flexibility in funding various scales of projects while benefiting from robust investor protection measures. This regulatory rigor upholds the integrity of the crowdfunding ecosystem in Lithuania, fostering a trustworthy and dynamic market for financial innovation within the EU.


Introduction to Lithuanian Collective Funding Licensing Requirements

As we approach a significant shift in the crowdfunding landscape in Lithuania, it’s crucial for current and aspiring fundraising platforms to understand the upcoming regulatory changes. Effective November 10, 2023, Lithuania is set to introduce a new framework that will redefine how crowdfunding operates within the country. This pivotal move aims to streamline the collective funding process, ensuring greater transparency and security for both project owners and investors.

Navigating Lithuania’s Collective Investing Landscape

Entities aiming to offer crowdfunding services in Lithuania must adhere to specific regulatory requirements. This involves submitting a comprehensive application to the Bank of Lithuania to get a license as a Crowdfunding Service Provider. The regulatory framework, as outlined in the Crowdfunding Regulation and supplemented by the technical standards from the European Securities and Markets Authority (ESMA), dictates the operational criteria for these providers.

Detailed Application Process

The application must encompass all components mandated by Article 12(2) of the Collective Funding Regulation 2020/1503. ESMA provides a standard application form for authorization, ensuring a uniform approach across applicants.

Core Requirements for Applicants

Business Program Specifications

Applicants must detail the types of crowdfunding services they intend to provide and the operational aspects of their fundraising platform, including trading methods and locations.

Payment Service Provision

Clear strategies on how payment services will be integrated with fundraising offerings must be outlined.

Management and Compliance Procedures

Applicants should have established management procedures and internal controls, including risk management and accounting, to comply with the Crowdfunding Regulation.

Data Management and Operational Risks

Systems and procedures for data management, protection, and operational risk assessment need to be thoroughly prepared.

Prudential Safeguards

A description of prudential safeguards must be included, with evidence of adherence to these measures.

Key Information Document Clarity

Procedures to verify the clarity and completeness of information in the key information document about investments should be prepared.

Investor Protection Measures

Processes related to investment restrictions for inexperienced investors are required.

Business Continuity Plan

An extensive business continuity plan considering the scale and complexity of the intended crowdfunding services is mandatory.

Management and Ownership Credibility

Information about management and evidence of their good reputation, knowledge, skills, and experience is essential. Shareholders holding significant stakes must also demonstrate good repute.

Internal Control Rules

Rules to prevent conflicts of interest among shareholders, directors, employees, or related entities are crucial.

Customer Complaint Handling Procedures

Descriptions of processes for managing customer complaints should be prepared.

Documentation of Compliance

All documents submitted to the Bank of Lithuania must explicitly demonstrate compliance with the Crowdfunding Regulation and readiness to provide services.

Adherence to these comprehensive requirements ensures that entities seeking a crowdfunding service provider license are fully prepared and equipped to operate within the regulated framework, prioritizing investor protection and service integrity.


Comprehensive Guide to Licensing Process in Lithuania

In today’s dynamic financial landscape, securing a crowdfunding license in Lithuania stands as a gateway to innovative funding and business growth. This guide is tailored to provide a comprehensive overview of the licensing process, ensuring that aspiring Crowdfunding Service Providers (CSPs) are well-equipped with the necessary information to navigate this complex journey.

The Road to Collective Investing Success: Licensing in Lithuania Explained

From the meticulous evaluation of application documents by the Bank of Lithuania to understanding the essential fees and expansion possibilities within the EU, each step of the process is crucial. Our guide delves into the details of each phase, offering insights and practical advice to streamline your application, meet the stringent criteria, and ultimately expand your crowdfunding services across European markets.

Evaluation of Application Documents

The Bank of Lithuania employs a meticulous approach to evaluate documents submitted for a Crowdfunding Service Provider license. Specialists from relevant departments collectively analyze the application to form conclusive opinions on licensing eligibility. In cases of application deficiencies, they engage directly with the applicant for necessary corrections. The assessment duration varies, hinging on the application’s comprehensiveness and quality. Throughout this period, the Bank of Lithuania maintains proactive communication and organizes meetings with applicants, fostering a cooperative relationship.

Defined Timelines for Licensing

Initial Evaluation: Within 25 working days from receiving the application, the Bank of Lithuania confirms its completeness. Incomplete applications may lead to a set deadline for additional information submission, failing which the application may be rejected.

Final Decision: A thorough assessment within 3 months from receipt of a complete application determines the applicant’s adherence to Crowdfunding Regulation requirements. The license can be denied if the applicant fails to meet these standards or poses management risks that could affect operational continuity and client interests.

License Fee Payment

Prospective applicants must pay a state levy of 710 Euros to the State Tax Inspectorate (STI) prior to application submission. This fee, established by the Lithuanian government, is a prerequisite for license processing. Detailed payment instructions and account information are available on the STI website.

Expanding Services across the EU

Crowdfunding Service Providers licensed in Lithuania and aspiring to operate in other EU states must submit specific information to the Bank of Lithuania, including:

  • A list of EU member states and specific services they intend to offer;
  • Identification details of individuals and legal entities responsible for these services;
  • Proposed service commencement dates.

Upon submission, the Bank of Lithuania informs both the relevant member state authority and ESMA. Providers can commence services in another EU state post notification from the Bank of Lithuania or after 15 calendar days from the information submission date.

The licensing process for Crowdfunding Service Providers in Lithuania is designed to be thorough, transparent, and cooperative. This ensures only qualified entities can offer these services, maintaining high standards of investor protection and market integrity.


Eesti Firma – Your Reliable Partner in Collective Investments

By choosing us, you are not just opting for a service, but a partner who deeply immerses in your business goals and strives for their realization. We offer not only expert knowledge in the field of collective investing and finance but also a personalized approach that sets us apart from others. Below are the key reasons why working with us will be a beneficial and productive experience for you.

Experience and Expertise

Our team possesses deep knowledge and years of experience in the field of crowdfunding and financial services. We understand the nuances of regulation and can effectively guide you through the complex licensing processes.

Personalized Approach

Each client is unique to us. We carefully study your situation and goals to offer solutions that best meet your needs.

Complete Transparency and Openness

We value the trust of our clients and always act openly and honestly. You will always be informed of all aspects of your project.

Connections and Resources

Having a broad network of professional contacts and access to cutting-edge resources allows us to provide high-quality services.

Reliable Results

Our goal is your success. We are committed to achieving your business goals and guarantee that we will work tirelessly to deliver the best results.

Your success and satisfaction with our services are our top priorities. We are confident that our expertise, personalized approach, and continuous support will help you reach new heights in the world of fundraising. Don’t miss the opportunity to take advantage of the unique possibilities we offer, and join our satisfied clients. Contact us today to start your journey to success!


Your Path to Success in Crowdfunding Starts Here!

Don’t miss the opportunity to bring your crowdfunding project to success in the European Union – get your Crowdfunding License in Lithuania! Our team is ready to answer all your questions and discuss the nuances of your business model. Contact us now to bring your ideas to life together.

A Service Provider You Can Trust

Choosing us means selecting a reliable partner with proven experience and professionalism. We commit to providing you with the highest quality of service, ensuring that every aspect of your Lithuanian crowdfunding startup is implemented considering all your requirements and expectations.

FAQ | Crowdfunding License in Lithuania

Looking for answers to your crowdfunding queries? You’ve come to the right place! In this FAQ section, we’ve gathered some of the most frequently asked questions to help guide you through the world of fundraising. Whether you’re just starting out or looking for advanced tips, these answers are designed to clarify your doubts and assist you in your fundraising journey.

  • What is crowdfunding?

    Crowdfunding is a method of raising capital through the collective efforts of friends, family, customers, and individual investors. This approach taps into the collective efforts of a large pool of individuals—primarily online via social media and fundraising platforms—and leverages their networks for greater reach and exposure.

  • How do I start a crowdfunding campaign?

    To start a collective investing campaign, first define your project or idea clearly. Next, choose the right fundraising platform that aligns with your project’s goals. Prepare a detailed plan including your funding goal, a compelling story, and marketing strategies. Finally, launch your campaign and actively manage it by engaging with your backers.

  • What are the benefits of crowdfunding?

    Crowdfunding offers numerous benefits, including access to a wide pool of potential funders, validation and feedback for your idea, marketing and public relations exposure, and the opportunity to refine your concept and business model. It also fosters a strong community around your project, enhancing customer loyalty and engagement.

  • Are there different types of crowdfunding?

    Yes, there are primarily four types of collective funding: donation-based, reward-based, debt-based, and equity-based. Donation-based crowdfunding is where people donate to a cause, project, or organization. Reward-based crowdfunding involves people contributing to your project in exchange for a reward or product. Debt-based, also known as peer-to-peer lending, involves individuals lending money in return for interest payments. Equity-based crowdfunding allows people to invest in a company in exchange for equity shares.

  • What should I consider before starting a crowdfunding campaign?

    Before starting a fundraising campaign, consider the following: Is your idea or project clearly defined and compelling? Have you chosen the right collective investing platform? Do you have a solid marketing strategy to attract backers? Are you prepared to manage and fulfill backer rewards? Understanding these elements is crucial for a successful collective funding campaign.

  • How can I promote my collective funding campaign?

    To promote your fundraising campaign, leverage social media, email marketing, and personal networks. Create engaging content, such as videos and updates, to share your story and progress. Consider collaborating with influencers or industry professionals to broaden your reach. Consistent communication and building a community around your project are key to successful promotion.

  • What happens if my fundraising campaign doesn’t reach its funding goal?

    If your campaign doesn’t reach its funding goal, the outcome depends on the type of collective funding model you’ve chosen. With ‘all-or-nothing’ models, funds are returned to the backers. In ‘keep-it-all’ models, you may keep the funds raised, but you should communicate clearly with your backers about how you plan to proceed.

  • What is the process for obtaining a crowdfunding license in the EU and Lithuania?

    To obtain a crowdfunding license in the EU and Lithuania, you must submit an application to the relevant authority, such as the Bank of Lithuania. The application must meet the requirements set out in the EU’s Crowdfunding Regulation, including detailed information about your business model, management procedures, and internal controls. The authority will review your application and assess your compliance with regulations.

  • What are the main requirements for a crowdfunding service provider in Lithuania?

    The main requirements for a CSP in Lithuania include having a clear business plan, robust risk management and internal control mechanisms, effective data management systems, prudential safeguards, and a comprehensive investor information program. The provider must also demonstrate the credibility of its management and a commitment to investor protection.

  • How long does it take to obtain a crowdfunding license in Lithuania?

    The duration to obtain a crowdfunding license in Lithuania typically depends on the completeness and quality of the application. The Bank of Lithuania evaluates whether the application is complete within 25 working days and makes a decision within 3 months from the receipt of a comprehensive application.

  • Is there a fee for the crowdfunding service provider license in Lithuania?

    Yes, there is a state levy fee for obtaining a CSP license in Lithuania. The fee is 710 Euros, and it must be paid before submitting the application.

  • Can a licensed crowdfunding service provider in Lithuania operate in other EU countries?

    Yes, a licensed CSP in Lithuania can offer services in other EU member states. However, they must inform the Bank of Lithuania about the member states where they intend to provide services and comply with the regulatory requirements of those countries.

  • What happens if a crowdfunding service provider violates regulations in Lithuania?

    If a CSP violates regulations in Lithuania, they may face penalties, including fines, suspension of the license, or other regulatory actions by the Bank of Lithuania. Serious violations could lead to the revocation of the license.

  • What types of projects are suitable for crowdfunding in Lithuania?

    In Lithuania, collective investingis suitable for a variety of projects, especially those that resonate with a broad audience and have clear, achievable goals. This includes startups, small and medium enterprises, innovative projects, and community-driven initiatives.

  • How does the Bank of Lithuania ensure the protection of investors ?

    The Bank of Lithuania ensures investor protection in collective investing through strict regulatory measures. These include assessing the credibility of CSP, monitoring their compliance with financial safeguards, and ensuring transparent and fair dealings with investors.

We hope this FAQ section has provided you with valuable insights and answers to your questions about crowdfunding in Lithuania and the EU. If you have any more queries or need further assistance, please don’t hesitate to contact us. We are here to support you every step of the way in your collective funding journey.

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