(photo credit: JEFF BARAK)
Eager to provide Israeli financial technology (“fintech”) startups with a gateway to European markets, the Bank of Lithuania is encouraging such companies to apply for the Baltic nation’s fast-tracked licensing program.
The Bank of Lithuania is inviting Israeli fintech firms to apply for the country’s Start-up Visa, after kicking off the process at an event in Tel Aviv earlier this week. In addition to providing companies with a European base in Lithuania, the program promises to process their e-money license applications within three months – faster than anywhere else in Europe.
“We want to make Lithuania the most fintech friendly country in Europe. More competition means more innovation, and that can only be a good thing for Europe’s consumers and businesses,” Marius Jurgilas, a Bank of Lithuania board member, said at the event.
In the background of Lithuania’s campaign to attract more fintech companies is the uncertainty facing many such firms due to Brexit. As the UK prepares to leave the EU and threatens to revoke “passporting” rights for UK banking license holders to trade in the rest of Europe, Lithuania is hoping to attract fintech firms looking for a new European base.
While a few other EU countries also offer a Start-Up Visa for non-EU states, Lithuania’s three-month licensing regime for fintech companies is the speediest program of its kind in the EU – allowing companies to start trading immediately upon receiving their license, a spokesman for the bank said. Administered by the Bank of Lithuania, the program is run jointly in partnership with the Invest Lithuania and Go Vilnius organizations.
Among the other perks offered by the new program is direct access to the Single Euro Payment Area (SEPA) through the Bank of Lithuania infrastructure rather than through commercial institutions. In addition, the bank will be treating fintech startups that provide payment services as financial bodies, enabling them to generate IBAN account numbers within 24 hours of operation.
As Lithuania looks to attract Israelis to its capital city, a few companies have already made the move. Among the Israeli fintech firms already active in Lithuania include venture capital firm Moneta, fraud-free payment system Simplex and peer-to-peer lending company BLender. In addition, cloud-based web development platform Wix.com has offices in Vilnius.
“Intensifying trade relations between Europe and the Israeli economy lead to increasing demand for promoting development of the payment and settlement infrastructure, which supports trade activities,” Jurgilas told The Jerusalem Post on Thursday. “The Bank of Lithuania supports the plans of Israeli companies to establish banks or electronic payment institutions in Lithuania and to offer efficient payment services for their customers.”
Operating in Lithuania, Israeli fintech start-ups would be able to maintain foreign exchange services, such as collecting payments from European customers in euros and transferring shekels to Israeli customers, or vice versa, Jurgilas explained.
“Being a member of the EU and euro area, Lithuania stands ready to open a window to the European payment area for Israeli financial institutions,” he said. “On the other hand, Israel also has a lot of innovative solutions and Lithuania hunger for innovations in the financial sector. So it will be a good symbiosis for both countries.”