Lithuania is a sizeable global fintech hub, and the second jurisdiction in the European Union is by the amount of registered crypto entities. For large and middle-level blockchain companies, it’s easy to get a VASP license there. Also the country has wide range of options to relocate and get residence permit, such as: education, business, work permit, blue card, investor visa and family visa. After living 5 years in Lithuania a foreigner can get permanent residence. There is an option to get citizenship by naturalization after 10 years living in the country.
Country overview
#8
LithuaniaCountry stats
Rating Points
420
This indicator describes the overall rating of a given jurisdiction on several parameters according to cryptocurrency operations - market volume, crypto regulation, business climate, taxation framework.
Crypto Penetration
1.2%
Estimated percentage of crypto users out of the country's total population based on public data.
Legal Entities
444
Number of crypto companies registered in the country based on regulator data if available or other types of public data.
Regulation Points
220
An overall assessment of the granularity of crypto regulation in a given country. A high score is also given to countries where cryptocurrency transactions are highly regulated.
Amount of crypto users
33 600
Total amount of crypto users out of the country's total population based on public data.
Taxation points
50
This figure, according to our analysts' calculations, indicates the overall level of tax burden for cryptocurrency transactions in a given country. The higher the indicator, the lower the burden.
Market volume points
54.2
A rough estimate of this jurisdiction's retail crypto market relative to the rest of the world. The higher the indicator, the higher the market potential.
Status of crypto
Legally allowed
General status of cryptocurrency regulation in this jurisdiction.
Crypto payments
Legally allowed
The legal status of cryptocurrency payments for goods and services in a given country based on information from regulators, public data and feedback from our community.
Security Level
Considerable danger
The overall level of security in a given country based on open data.
Crypto Salaries
Only part
The legal status of cryptocurrency salaries to employers in a given country based on information from regulators, public data and feedback from our community.
Business Climate
Very Good
Overall assessment of the friendliness of this country for crypto-business. This indicator takes into account the cost of obtaining a license and the attitude towards crypto entities in the country.
Stablecoin Regulation
Basic
This indicator is evaluating the regulation of stablecoins in a given country. Complex regulation means that it is possible to issue steiblcoins and obtain a license for this activity. Basic regulation means that the issuance of stablecoins is possible, but not all legal aspects are defined in the law. Standard regulation means that there is a legal practice of steylcoin circulation in a given country.
Bad Factors
No
This section describes the unfavorable economic factors for crypto-business in a given country. These are countries that are under sanctions or on the FATF grey list and other factors.
Types of licenses
Crypto-to-crypto
This license type allows VASP to provide legal exchange from one cryptocurrency to another.
Crypto-to-fiat
This type of license regulates the exchange from cryptocurrency to fiat.
Wallet/Custody
This country has a legal licensing procedure for companies that store cryptocurrency - - crypto wallet providers and custodians.
Good
Medium
Bad
Lithuania has a considerable danger security level according to our rating. Jurisdiction has 66.8 points (from 100) for safety level in Numbeo crime rating (1). Homicide level (2) is 2.6 per 100,000 inhabitants a year.
According to the guide of consulting company Eli Lithuania (3), crypto payments are legal in the country, and gains from them are taxable. There is a legal taxation procedure for crypto payments.
According to Eli Lithuania (4), salaries in the country must be paid in fiat money. However, it’s legal to pay bonuses and benefits in crypto.
In Lithuania, an entity may offer two types of virtual asset activities: virtual currency exchange operator and virtual currency wallet operator. These activities are not subject to licensing; however, specific requirements, as foreseen in the Law on the Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania(4¹), must be abided by to be recognized as a VASP.
Financial Crime Investigation Service and its definition of legal entities
According to the Financial Crime Investigation Service of Lithuania (5)
Virtual currency exchange operator shall mean a legal person who is established in the Republic of Lithuania or who is a branch, established in the Republic of Lithuania, of a legal person of a Member State of the European Union or a foreign state and who provides services of virtual currency exchange, purchase and/or sale for remuneration.
The legal document that regulates most crypto entities in the country is the Law on the Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania (6). To be licensed in Lithuania, a legal entity must get approval from the Financial Crime Investigation Service of Lithuania (7) and The Commercial Register (Registrų Centras) (8). Also, partially crypto entities in the country are regulated by The Bank of Lithuania (9).
From November 2022, this jurisdiction has provided some changes (10) in VASP regulations. According to rue.ee guide (11), the most significant changes are:
The Commercial Register will be the supervisory authority to comply with formal requirements (deposit of initial capital, presence of a local AML manager in the structure of the company, etc.).
The minimum authorized capital of a cryptocurrency company will be increased to 125,000 EUR.
Instead of MLRO and a non-local AML manager, VASP will be required to have a local AML manager (working only in a single cryptocurrency company).
Also, according to Coinfirm (12), new rules have increased the required capital for customer insurance. That’s why registered companies have decreased from 800 to 200 in 2022.
The VASP must prove they hold EUR 100 000 per customer claim for indemnity and EUR 500 000 for all customers’ claims for indemnity with a guarantee document issued by an insurance undertaking
However, now the amount of operating entities is increasing. In August 2023, there were 444 companies registered (13). One of them is Bifinity UAB (Binance payment provider).
After 30th December of 2024 regulation rules in Lithuania will change because of MiCA implementation. Based on Ellex (14) All VASP providers operating in the country need to register as CASPs until the end of 2024. There is no transition period for this purpose, according to the press release (15) of the Lithuanian Central Bank (Lietuvos Bankas), which is the main regulator for CASPs, all licensing procedures for existing VASPs should be finished by the end of 2024 to continue operations in the country. The capital minimum of 125,000 euro is essential for any CASP.
| Tax name | Index |
| PIT tax Max | 32 |
| PIT tax Min | 5 |
| Corporate tax (CIT) | 15 |
| Max Individual CGT (for crypto) | 20 |
| Min Individual CGT (for crypto) | 15 |
| Wealth tax Max | 0 |
| Wealth tax Min | 0 |
CGT
In most cases in Lithuania, CGT applied for crypto income as “any income not from employment.” Taxation of digital asset income in Lithuania was defined in 2018 by the local tax authority (VMI) in a letter dated 11/06/2018 (16). Income less than 2,500 EUR per year is tax-free. Then, a 15% tax rate is applied. In case annual income is higher than EUR 148,968 - 20%.
PIT
According to PWC (17) and ESA Consulting (18), any income from employment is taxable between 20-32%. However, in some cases, for example, for professional traders, it’s possible to implement a CIT tax for small businesses of 5-15%.
CIT
CIT - 15%, Tax on dividends – 15%
1)Crime Index by Country 2023 Mid-Year
2)List of countries by intentional homicide rate
3 and 4)Crypto and taxes in Lithuania. Article
4¹)Тhe Law on the Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania
5) Financial Crime Investigation Service of Lithuania. INFORMATION FOR LEGAL ENTITIES CARRYING OUT THE ACTIVITIES OF VIRTUAL CURRENCY EXCHANGE OPERATORS AND (OR) DEPOSITORY VIRTUAL CURRENCY WALLET OPERATORS IN THE REPUBLIC OF LITHUANIA
6) Law on the Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania
7)Financial Crime Investigation Service of Lithuania
10)Lietuvos Respublikos pinigų plovimo ir teroristų finansavimo prevencijos įstatymo Nr. VIII-275 2, 9, 25 straipsnių pakeitimo ir Įstatymo papildymo 25-3 straipsniu įstatymas (Money Laundering and Terrorist Financing Prevention Law of the Republic of Lithuania No. VIII-275 Law amending Articles 2, 9, 25 and supplementing the Law with Article 25-3)
11)CRYPTO REGULATION IN LITHUANIA. Article
12)Lithuania removes hundreds of VASPs from operating in the jurisdiction.
13)List of legal entities operating as depository virtual currency wallet operators
14)Ellex Guide
15)Lietuvos Bankas Press Release on MiCA implementation
16)PERSONAL INCOME TAX ON CRYPTOCURRENCY TRADE IN LITHUANIA
18)PERSONAL INCOME TAX CHANGES IN LITHUANIA 2020. Article
Last update: November 2024