Brexit was a shock for the European Union however, for a lot of member states, it was additionally a chance. Lithuania was amongst them: as Frankfurt, Paris and Amsterdam vied to lure monetary companies away from London, Vilnius made a play for the world’s fintechs.
Its technique based mostly on streamlining regulation to entice fintechs to arrange their “EU shop” in Lithuania seems to be paying off. In 2014, there have been simply 55 fintechs based mostly in Lithuania. Now, there are 265. Forty per cent of those have headquarters in different international locations.
It has not all been plain cruising. The involvement of an area fintech UAB Finolita Unio within the Wirecard scandal rattled regulators, and buyers acknowledge that it’s going to take greater than well-crafted guidelines for Lithuania to meet up with the UK.
Part of the nation’s enchantment for entrepreneurs is, as policymakers hoped, the regulatory regime, which is run by the Bank of Lithuania (BoL), the central financial institution. As effectively as overseeing a well-respected “sandbox” facility that enables fintechs to check their concepts underneath regulatory supervision, the BoL enjoys a popularity for effectivity and transparency within the licensing course of.
Understanding regulatory processes is usually a large drain on assets for fledgling fintechs, however early-stage corporations cite their constructive expertise of the Lithuanian regulator’s transparency.
In different respects, too, Lithuania’s regulators look like doing an excellent job. The nation is the eighth lowest-risk jurisdiction for cash laundering on the planet, in keeping with the AML Basel Index, which ranks the UK twelfth and the US thirtieth.