FinTech, short for Financial Technology, has grown from being a term for the technology utilized by financial institutions to an umbrella term for technological innovation in the financial sector, including more consumer-oriented services.
Lithuania as a FinTech-friendly jurisdiction
Lithuania continues to expand its international standing as a FinTech-friendly jurisdiction. The country is developing a FinTech coordination center for the 16+1 group of central and eastern European countries in the its capital Vilnius, while preparations for an international Fintech conference in the city in October 2019 are under way.
At the same time, Lithuania is launching a regulatory sandbox for FinTech companies, as a controlled live environment to test innovative products and solutions, before making them available in a normal business environment. Participants in the regulatory sandbox will be subject to simplified regulations and licensing procedures.
The FinTech sector in Lithuania enjoyed exceptional growth in the past few years. It more than doubled the number of FinTech companies operating in Lithuania, from 45 in 2013 to 177 firms in 2017. Cryptocurrency transfers involving Lithuanian firms reached a whopping $762 million between 2017 and 2018. Notably, the same year The Bank of Lithuania was selected as the winner of the Catalyst Award in the FinTech & RegTech Global Awards 2018 organized by Central Banking, an international journal.
The local authorities and the Bank of Lithuania work together to create an environment that attracts more FinTech companies encouraging them to invest and innovate in the country. Consequently, cultivating a Fintech-conductive regulatory and supervisory ecosystem and fostering innovations in the financial sector is part of the bank’s key strategic goals 2020.
Meanwhile Chinese FinTech companies have been successful and made great amounts of investment in areas with high levels of demand and effectively diversified in other business areas. Many of these companies are at the forefront of customer-centric FinTech services. Now Lithuania is offering those firms an entry point into European markets.
Opportunities for Chinese FinTech investments
During October’s China Investment Forum held in Prague (Czech Republic), Marius Jurgilas, board member of the Bank of Lithuania, emphasized how Lithuania’s experience and future actions are aimed at attracting Chinese Fintech companies to the Central Eastern Europe and the European market. “We have already established close ties with Asian authorities and, maintaining regulatory flexibility, are building bridges for FinTech businesses in the region. Banks, electronic money and payment institutions can all gain easy access to Europe’s fast-paced payments market via infrastructure provided and maintained by the Bank of Lithuania,” said Mr Jurgilas.
In 2015 the Bank of Lithuania signed a co-operation agreement with the China Banking Regulatory Commission. Since then the bank of Lithuania has issued four electronic money institutions authorizations and one payment institution authorization for the Chinese companies. Currently ten more Chinese companies are eager to join the bank’s central payment system, which is a good indicator of the successful collaboration between the Bank of Lithuania and Chinese FinTech sector.
Mr. Jurgilas emphasized on the quick authorization process and broad choice of business models, ranging from electronic money or payment institutions to specialized banks, as the key elements of Lithuania Fintech regulatory regime.
Through its network of firms ECOVIS Beijing is uniquely positioned to advise firms interested in expanding their FinTech businesses to Europe through Lithuania. With its experience in legal, regulatory and financial frameworks in both China and Europe, including Lithuania, ECOVIS and its partner firm in Lithuania can support Chinese firms in their international expansion. Please contact us to find out more about how we can help you.
Forbes: How has Lithuania Become One of Europe’s Most Exciting FinTech Hotspots? https://www.forbes.com/sites/joewalleneurope/2018/10/28/how-has-lithuania-become-one-of-europes-most-exciting-fintech-hotspots/amp/
Bank of Lithuania: Lithuania can serve as a gateway to Europe for China’s FinTech firms https://www.lb.lt/en/news/m-jurgilas-lithuania-can-serve-as-a-gateway-to-europe-for-china-s-fintech-firms
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