acquire a crowdfunding license in lithuania

How to Acquire a Crowdfunding License in Lithuania 

Crowdfunding’s rapid rise in Lithuania has paralleled growth in the country’s financial technology (fintech) industry. Supportive regulations and thriving startup ecosystems have positioned Lithuania as a regional crowdfunding leader. This article explains licensing requirements and industry best practices for companies looking to operate crowdfunding platforms in Lithuania’s flourishing market legally.

What is a Crowdfunding License and Why it Matters

A crowdfunding license from the Bank of Lithuania authorizes a company to operate an online crowdfunding platform legally. Obtaining this license involves meeting capital requirements, implementing investor protections, and adhering to transparency standards.Lithuania’s Regulatory Landscape for Crowdfunding Platforms

Holding a valid license signals to investors, entrepreneurs, and industry partners that a platform is adequately regulated and trusted. It cultivates confidence in the platform as well as broader industry growth. For example, Lithuania’s licensed platforms facilitated over €80 million in funding last year.

Types of Crowdfunding Business Models

Lithuania follows European Crowdfunding regulation, which permits platforms to offer equity, lending, and reward-based crowdfunding. Each model serves different funding needs:

Equity-based Crowdfunding

Equity models allow investors to purchase shares in startups or small businesses seeking funds. In return, investors gain partial ownership and potential profits if the company performs well. Lithuania’s equity crowdfunding niche is still emerging but has high growth potential. For instance, the real estate startup Innovage raised €3.1 million last year through its equity campaign.

Peer-to-Peer Lending

Also called debt-based crowdfunding, peer-to-peer connects investors directly with borrowers seeking loans. Investors enjoy set interest rates and loan repayment over a fixed term, usually six months to 5 years. Lithuania now has over a dozen active P2P lending platforms like FinBee and Savy offering business and consumer loans.

Reward-based Crowdfunding

This model provides investors with non-financial rewards for backing creative, cause-based, or entrepreneurial projects. Rewards can include:

  • First-access product discounts.
  • VIP event access.
  • Public recognition.
  • Consumer goods produced by the company.

Go Vilnius’s tourism-focused platform collected over €27,000 last year utilizing this model.

Obtaining a national crowdfunding license from Lithuania’s central bank signals regulatory vetting and approval to operate. This distinction fosters investor and industry trust that licensed platforms implement governance controls, transparency measures, and ethical practices. Research suggests Lithuanian consumer perceptions of licensed platforms are up to 68% more buoyant than those of unlicensed entities. Hence, licensing plays an integral trust-building role.

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Lithuania’s Regulatory Landscape for Crowdfunding Platforms

As a European Union member state, Lithuania’s crowdfunding laws fall under wider EU statutes focused on harmonizing capital markets and cross-border investing norms. Key directives involve disclosure procedures, authorized investment ceilings, and operational risk principles. It shall be noted that with the Lithuanian (EU) crowdfunding license, businesses may actively operate throughout the EU and fundrise the projects outside EU according to the reverse solicitation basis. 

However, Lithuania supplements pan-European financial regulations with specialized national crowdfunding policies tailored to local fundraising ecosystem nuances and investor protections. Oversight bodies include:

  • Bank of Lithuania: Lithuania’s central bank and lead crowdfunding sector regulator. Sets operational rules and licensing protocols.
  • Ministry of Finance: Coordinates with EU regulatory bodies and updates national crowdfunding laws accordingly.
  • Lithuanian FinTech Association: Industry group providing best practice guidance and investor education.

Below are some examples of Lithuania’s unique domestic crowdfunding statutes:

  • Annual fundraising caps of under €5 million per crowdfunding offer/project
  • Mandatory licensing requirement for all equity and lending platforms
  • Clear “Know Your Customer” and other AML related protocols

Step-by-Step Licensing Application Process

Earning a Lithuanian crowdfunding license involves extensive disclosures and multi-phase reviews by regulatory authorities. Key steps include:

Incorporation and Capitalization

Before applying, crowdfunding companies must legally register as Lithuanian corporate entities and hold a minimum of €25,000 in capital. It demonstrates essential operational capacity and financial credibility.

Submission of Comprehensive Operational Materials

The licensing application itself requires detailed paperwork including but not limited to:

  • Business plan (including proposed services, target markets, and fundraising models)
  • Policies and procedures for the assessment of projects for fundraising
  • Internal governance arrangements
  • Organizational structure and internal reporting systems 
  • Business continuity plan, risk management procedures
  • Data privacy and security policies
  • Transparency procedures for users and backers

Preparing this stack of materials enables evidence-based assessment of the platform’s long-term viability and ethical alignment by regulatory bodies.

Final Review and Approval

Once application materials have been vetted for completeness, accuracy, and regulatory adherence, the Bank of Lithuania conducts a final compliance review. If satisfied, officials will formally approve and issue a national crowdfunding license.

Post-Licensing Operating Requirements

Maintaining an active crowdfunding license depends on ongoing adherence to Lithuania’s statutory expectations around reporting volumes, capital levels, investor protections, and risk mitigations. For example:

  • Submitting monthly fundraising summaries
  • Holding minimum capital reserves based on average monthly transaction volumes
  • Following identity verification protocols like Know Your Customer (KYC) checks
  • Implementing anti-fraud and anti-money laundering monitoring

Such requirements safeguard the platform’s financial health and credibility. Regulators may revoke licenses for consistent failings.

Industry Best Practices and Final Takeaways

Beyond base regulatory requirements, Lithuania’s leading crowdfunding platforms also implement recognized customer service, technology, and social responsibility best practices for optimal integrity and reliability. These include:

  • Proactive user communication and education
  • Intuitive investor tools and platform interfaces
  • Supporting inclusive funding opportunities
  • Security protocols exceeding legal minimums
  • Partnerships with legal/compliance/accounting experts


Lithuania’s supportive regulatory environment and expanding FinTech ecosystem have cultivated one of Europe’s most dynamic crowdfunding markets. For platforms seeking to leverage Lithuania’s growth while ensuring ethical standards, obtaining the required crowdfunding license remains an essential first step.

Meeting ongoing governance expectations and embracing industry best practices will determine which market players translate compliance into leadership. Ultimately, Lithuania’s transparent approach bodes well for consumers and visionaries alike.