Lithuania is one of the few UN member countries that are welcoming of the exchange of cryptocurrency. If you meet the conditions set by the Lithuanian Financial Crime Investigation Service (FCIS), you will get a crypto license. So, this article highlights the requirements for a Lithuanian crypto exchange license. For further information you can go to https://inteliumlaw.com/crypto-license/lithuania/.
Capital Requirements
If you intend to operate a cryptocurrency exchange business in Lithuania, you need a registered shared capital. The updated legislation says the capital must be at least €125,000, which was recently increased from €2,500.
Local AML Officer
A legal crypto exchange operator in the Republic of Lithuania must have an anti-money laundering specialist. Such a person must also be a Lithuanian resident. You must have an AML officer or MRLO who is a permanent resident of the country.
Requirements
While running a crypto exchange business in Lithuania does not require an office, there are still requirements to follow. Here are the different sets of requirements each legal crypto exchange entity must fulfill to get a Lithuanian license:
For Company Members
- Owners, whether legal or natural, must be present. However, company members are not restricted based on their nationality or residence.
- There must be an owner; their citizenship and residency do not matter either.
- The AML compliance officer may be the same owner, but they must have professional experience.
- There must be an office, although it doesn’t have to be physical; it can be virtual.
- Data of all UBOs (beneficiary owners) must be supplied at the point of application.
AML/CFT Policies
- The crypto company is mandated to follow strict regulations. This is to prevent financing criminal purposes such as money laundering.
- Implementation of due diligence measures in accordance with KYC rules is mandatory. This can include identification and verification of potential customers. Also, individual transactions of current customers must be verified. It becomes necessary when transactions exceed the established €15,000 limit.
- Customer information must be stored so that it can be transferred to the regulatory authority when demanded.
- The legal entity running a crypto exchange business must regularly submit reports to FCIS. Also, they must promptly answer all inquiries about their activities.
- All financial operations must be well monitored. Also, suspicious transactions should be suspended.
- Readiness to submit reports to the regulator and to supply information on individual requests.
- Diligent and regular conduct of a comprehensive audit of financial activities. This is to enable timely identification of risks, threats, and vulnerabilities.
Requirements for Reporting
There are no special requirements when it comes to reporting to tax authorities. However, the crypto exchange company needs to provide accounting in the same way other companies do. Also, the FCIS can request and make prescriptions about their activities at any time.
Taxation Requirements
Taxes vary for crypto companies, depending on the activities of the crypto company. There are no taxes on tokens you get, whether through nesting, exchange, or any other means. While VAT is required on crypto offers, it does not apply to crypto exchange services. In addition, there is a 15% corporate income tax imposed on the profit obtained from a crypto exchange activity, for small businesses with less than ten employees and not more than 500000 LTL of income the decreased rate of 5% applies.
Documentation Requirements
One of the crypto exchange license requirements has to do with documentation. To obtain the license, Lithuania will require the following documents:
- Passports of all beneficiaries, directors, and stakeholders
- CVs of all mentioned above
- Proof of zero criminal record
- KYC/AML policies, procedural rules, and business plan
- Among others.
Conclusion
Lithuania is the most popular jurisdiction, especially among crypto enthusiasts. It is also the leading choice for whoever is looking to start a cryptocurrency business. Once you know how to get crypto exchange license, the process becomes easy.