CASP License in Lithuania
The CASP license in Lithuania represents the new unified authorization standard for crypto-asset service providers operating within the European Union, established under the Markets in Crypto-Assets Regulation (EU 2023/1114), which entered into full application on 30 December 2024 and replaced the previously fragmented national VASP registration regimes across Member States. Lithuania, having positioned itself as one of the leading European fintech hubs since the introduction of its initial virtual currency operator framework in 2017, now offers crypto-asset businesses a regulated pathway to obtain CASP authorization through the Bank of Lithuania, with successful licensees gaining passporting rights to provide services across all 27 EU Member States without requiring additional national authorizations.
What Is a CASP License in Lithuania?
A CASP license constitutes the mandatory authorization framework for crypto-asset service providers under the Markets in Crypto-Assets Regulation (EU 2023/1114), replacing the fragmented national VASP regimes that previously governed digital asset operations across EU Member States. Lithuania formalized its MiCA implementation through the Law on Markets in Crypto-Assets (Lietuvos Respublikos kriptoturto rinkų įstatymas), adopted on 11 July 2024, which designated the Bank of Lithuania (Lietuvos bankas) as the competent authority for evaluating applications, granting crypto licenses, and conducting prudential oversight of authorized entities.
Since 30 December 2024, the licensing regime has been fully operational, establishing a dual supervisory structure: the Bank of Lithuania handles authorization decisions and ongoing prudential monitoring, whereas the Financial Crime Investigation Service (Finansinių nusikaltimų tyrimo tarnyba, or FNTT) exercises dedicated AML/CFT oversight, performing scheduled and unscheduled inspections to verify that licensed operators maintain transaction monitoring systems, suspicious activity reporting mechanisms, and customer due diligence procedures aligned with FATF Recommendations and EU anti-money laundering directives.
While both terms refer to entities providing crypto-related services, the regulatory distinction between VASP and CASP reflects a fundamental shift in the European approach to digital asset supervision, and understanding this transition proves essential for operators planning their market entry or expansion strategy with LegalBison advisory support.
VASP (Virtual Asset Service Provider):
- National registration regime administered by Registrų centras (Centre of Registers), with AML/CFT supervision exercised by FNTT under the Law on Prevention of Money Laundering and Terrorist Financing
- No passporting mechanism for cross-border service provision within the EU
CASP (Crypto-Asset Service Provider):
- Full licensing procedure conducted by the Bank of Lithuania under MiCA (EU 2023/1114)
- Heightened prudential standards, including tiered own funds requirements (EUR 50,000 to EUR 150,000 depending on service classification) as a minimum
- Comprehensive fit and proper assessments for shareholders, directors, and key function holders
- EU-wide passporting rights enabling service provision across all 27 Member States upon single authorisation
Existing VASP operators registered prior to 30 December 2024 benefit from transitional provisions permitting continued operations until 31 July 2025, provided they submit a complete CASP application to the Bank of Lithuania before this deadline expires. The LegalBison team maintains deep expertise across both regulatory frameworks, assisting clients navigating the transition from legacy VASP registration to full MiCA-compliant CASP authorization through tailored compliance gap analysis and application documentation preparation.
Who Needs a CASP License in Lithuania?
The MiCA Regulation establishes a clearly defined regulatory perimeter under Article 3, specifying which business activities fall within scope and consequently require CASP authorization from the Bank of Lithuania prior to commencing operations.
Entities requiring CASP authorization:
- Centralised cryptocurrency exchanges (CEX) and DEX platforms where developers or operators retain ability to modify smart contracts or manage key protocol functions
- Exchange service providers facilitating crypto-to-crypto and crypto-to-fiat conversions
- Custodial wallet operators providing storage services with encrypted private keys on behalf of clients
- Platforms engaged in the placement and marketing of crypto-assets to third parties
- Entities receiving and transmitting client orders for crypto-asset transactions
- Portfolio management services handling discretionary crypto-asset allocation for clients
- Advisory firms providing recommendations on crypto-asset acquisitions or disposals
Activities falling outside MiCA scope:
- Self-custody solutions where users maintain exclusive control over private keys
- Fully decentralised protocols (DeFi) operating without identifiable central operators capable of protocol modification
- Technical infrastructure providers delivering hardware, software, or node services without direct access to client assets
Determining whether a particular business model triggers licensing obligations requires careful regulatory analysis. Cases frequently arise where operational structures blur the distinction between custodial and non-custodial arrangements, or where ostensibly decentralized protocols retain centralized control elements that bring them within the MiCA Regulation perimeter.
MiCA establishes a tiered classification system for CASP authorization, with minimum own funds requirements scaling according to the risk profile and operational complexity of services provided, distinct from the more demanding capital thresholds associated with a banking license Lithuania entities must satisfy.
Class 1 CASP (EUR 50,000 minimum own funds): Entities providing advisory services on crypto-asset transactions, reception and transmission of orders on behalf of clients, execution of orders on behalf of clients, placing of crypto-assets, portfolio management services, and transfer services for crypto-assets on behalf of clients.
Class 2 CASP (EUR 125,000 minimum own funds): Operators offering custody and administration of crypto-assets on behalf of clients through custodial wallets with encrypted private keys and exchange services facilitating crypto-to-crypto and crypto-to-fiat conversions.
Class 3 CASP (EUR 150,000 minimum own funds): Trading platform operators providing multilateral systems where multiple third-party buying and selling interests interact, representing the highest regulatory tier with comprehensive market integrity obligations.
Advantages of Getting a CASP License in Lithuania
Lithuania presents a compelling jurisdictional proposition for crypto-asset service providers seeking MiCA-compliant authorization, combining regulatory maturity with operational efficiencies that distinguish it from other EU Member States.
EU Passporting Rights: A single CASP authorization from the Bank of Lithuania grants access to provide services across all 27 EU Member States, reaching a consumer base exceeding 450 million individuals without requiring additional national licenses.
Regulatory Experience: The Bank of Lithuania has supervised crypto-asset operators for years, having registered hundreds of virtual currency companies under the previous VASP framework, accumulating institutional expertise that facilitates structured application review processes.
Competitive Timelines: CASP license applications typically undergo assessment within 3 to 6 months, subject to documentation completeness and the regulator’s prevailing caseload.
Favorable Tax Environment: Corporate income tax stands at 16% as of 2025, with reduced rates of 6% available for small enterprises generating annual revenues below EUR 300,000. Also, Lithuanian companies are exempt from taxation in their first year of operations.
Fintech Ecosystem: Vilnius has emerged as a prominent European fintech hub, hosting a concentration of digital asset businesses, payment institutions, and Electronic Money Institutions (EMIs) that create synergies for new market entrants.
Streamlined Incorporation: Company registration Lithuania procedures allow UAB (private limited liability company) formation within approximately two weeks, with the entire process from incorporation through license application submission conducted remotely via the LBIS e-portal.
Banking Infrastructure: Established relationships exist between crypto-asset operators and crypto-friendly EMIs operating within Lithuania, addressing the banking access challenges frequently encountered in other jurisdictions.
Lithuania CASP License Requirements Under MiCA
Corporate Requirements
Applicants must establish a UAB (Uždaroji akcinė bendrovė), the Lithuanian private limited liability company form, with a registered legal address within Lithuania and demonstrable operational substance, meaning that a material portion of business activities, decision-making processes, and client-facing operations must be conducted from the jurisdiction rather than serving merely as a brass-plate arrangement.
Capital Requirements
Minimum own funds range from EUR 50,000 to EUR 150,000 depending on the CASP service classification, with these thresholds representing permanent prudential obligations subject to ongoing supervisory monitoring rather than one-time capitalization requirements. The Bank of Lithuania requires maintenance of additional capital buffers proportionate to operational risk exposure, and notably, initial capital contributions may be denominated in qualifying crypto-assets, presenting a distinctive advantage for digital-native businesses structuring their balance sheets.
Governance Requirements
All directors, senior managers, and ultimate beneficial owners (UBOs) holding qualifying stakes must satisfy the fit and proper assessment conducted by the Bank of Lithuania, demonstrating absence of criminal convictions related to financial crimes, money laundering, or fraud, alongside a minimum of three years of professional experience in financial services, technology, or related sectors.
Staffing Requirements
The organizational structure must include distinct key function holders: a Chief Executive Officer (CEO), Chief Compliance Officer (CCO), and Money Laundering Reporting Officer (MLRO), requiring a minimum of three qualified professionals with Lithuanian presence, although smaller-scale operators may combine CCO and MLRO functions within a single role subject to regulatory approval.
AML/CFT Compliance
Comprehensive internal control frameworks encompassing KYC policies, risk-based transaction monitoring systems, suspicious activity reporting procedures aligned with FNTT requirements, and Travel Rule compliance mechanisms for crypto-asset transfers must be documented and operationally implemented prior to license approval.
Operational Requirements
Technical infrastructure standards mandate robust IT security protocols, documented business continuity and disaster recovery plans, GDPR-compliant data protection measures, and formalized client complaint handling procedures demonstrating capacity for orderly operations under both normal and stressed conditions.
Economic Substance Requirements in Lithuania
The Bank of Lithuania enforces substance requirements designed to ensure that licensed CASPs maintain genuine operational presence, with specific obligations varying according to the scale and complexity of authorized activities.
A registered office address in Lithuania constitutes the foundational requirement, with virtual office arrangements permissible during the initial licensing phase provided the applicant demonstrates a credible plan for establishing physical premises as operations scale. At least one member of the management body must hold EU residency.
Since 1 January 2025, applicants must maintain a corporate bank account with either a Lithuanian credit institution or a foreign bank operating a licensed branch within Lithuania, representing a tightening of previous requirements that permitted accounts held elsewhere in the EU. Annual financial statements require certification by a Lithuanian-registered auditor, and the Bank of Lithuania expects demonstrable evidence that a material portion of operational activities, including client onboarding, transaction monitoring, and compliance decision-making, occurs within Lithuanian jurisdiction.
Company Formation for CASP License in Lithuania
Establishing a UAB (Uždaroji akcinė bendrovė) constitutes the prerequisite corporate step before initiating a CASP license application, with the incorporation process following a structured sequence that LegalBison manages comprehensively on behalf of clients seeking Lithuanian market entry.
- Company name verification through the Registrų centras (Centre of Registers), ensuring the proposed designation does not conflict with existing registered entities or protected trademarks.
- Preparation of founding documentation, including Articles of Association specifying share capital structure, management arrangements, and authorized business activities aligned with intended CASP services.
- UAB registration completed remotely through a Lithuanian notary utilizing electronic signature and video identification procedures, eliminating the requirement for founders to travel to Lithuania.
- Corporate bank account opening with a Lithuanian credit institution to receive the mandatory share capital contribution.
- Share capital contribution ranging from EUR 50,000 to EUR 150,000 depending on the targeted CASP service class, with Lithuanian law permitting crypto-asset contributions provided valuation is certified by a sworn appraiser (prisiekęs vertintojas).
- Registry extract issuance confirming the company's legal existence and readiness to proceed with the CASP license application.
The complete incorporation timeline typically spans 2 to 4 weeks, enabling swift progression to the regulatory authorization phase.
CASP License Application Process in Lithuania
The CASP authorization pathway administered by the Bank of Lithuania follows a structured multi-phase procedure, with LegalBison providing end-to-end support throughout each stage to ensure application completeness and regulatory alignment.
- Preparatory Phase: Selection of the appropriate CASP service class based on intended business activities, completion of UAB registration through Registrų centras, and contribution of requisite share capital to a Lithuanian corporate bank account.
- Documentation Preparation: Compilation of a comprehensive regulatory-grade business plan, AML/KYC internal control policies, business-wide risk assessment (BWRA), compliance monitoring manual, IT security protocols, and business continuity arrangements conforming to MiCA requirements.
- Key Personnel Appointment: Designation of CEO, CCO, and MLRO with supporting documentation evidencing professional qualifications, relevant experience, and clean criminal records for fit and proper assessment purposes.
- Application Submission: Filing through the LBIS e-portal operated by the Bank of Lithuania, with all documentation submitted in Lithuanian or accompanied by certified translations from authorized translators.
- Completeness Review (25 working days): The Bank of Lithuania conducts a preliminary assessment of application integrity, potentially issuing requests for supplementary information or clarification on specific elements.
- Substantive Assessment (40 working days): Detailed evaluation of the business model viability, source of funds verification, governance arrangements, and fit and proper determinations for shareholders and management, with a potential extension of 20 additional working days for complex applications.
- Authorization Grant: Issuance of CASP license and entry into the official register maintained by the Bank of Lithuania, enabling lawful commencement of crypto-asset services.
- Ongoing Compliance: Post-authorization obligations, including periodic supervisory reporting, annual external audit, capital adequacy maintenance, and continuous adherence to AML/CFT requirements monitored by FNTT.
MiCA Transition Timeline in Lithuania
Lithuania's MiCA implementation follows a defined regulatory calendar establishing critical milestones for market participants:
- 11 July 2024: Adoption of the Law on Markets in Crypto-Assets (Lietuvos Respublikos kriptoturto rinkų įstatymas)
- 30 December 2024: CASP licensing regime becomes fully operational under Bank of Lithuania supervision
- 29 April 2025: Complete alignment of national legislation with MiCA requirements
- 31 July 2025: Expiration of transitional provisions for existing VASP operators
Following the 1 January 2026 deadline, provision of crypto-asset services without valid CASP authorization constitutes a regulatory breach carrying potential criminal liability, making early initiation of the licensing process essential for operators seeking continued market access across Lithuania and the broader European Union.
Costs and Fees for CASP License in Lithuania
Establishing a licensed CASP operation in Lithuania requires careful financial planning across both initial setup expenditures and recurring operational costs, with total investment varying significantly based on the intended service scope and regulatory classification.
The aggregate launch budget for establishing a fully licensed CASP operation in Lithuania typically ranges with a starting budget from €70,000 to €200,000, with variation attributable to the complexity of intended services, staffing requirements, and whether the applicant leverages existing corporate infrastructure or commences from the incorporation stage.
Taxation for CASP Companies in Lithuania
Lithuania's fiscal framework presents a competitive tax environment for CASP operators, positioning the jurisdiction favorably among EU Member States for digital asset businesses seeking to optimize their corporate structure.
Corporate Income Tax stands at 16% as of 1 January 2025, representing one of the lowest rates within the European Union. Small enterprises meeting qualifying criteria (fewer than 10 employees and annual revenue below €300,000) benefit from a 0% rate during their first fiscal year, transitioning to 6% in subsequent periods, providing meaningful relief for early-stage crypto ventures scaling their operations.
VAT treatment follows European Court of Justice jurisprudence exempting cryptocurrency exchange services from value-added tax, while ancillary activities including consulting, software development, and technical services remain subject to the standard 21% rate. Dividend distributions to shareholders attract a 15% withholding tax, although Lithuania imposes no taxation on retained earnings, enabling reinvestment of profits without immediate fiscal burden.
As an OECD member maintaining an extensive network of double taxation treaties, Lithuania offers additional structuring advantages for international crypto-asset groups establishing their EU operational hub.
FAQ
The complete process, encompassing UAB registration, documentation preparation, and Bank of Lithuania review, typically spans 3 to 6 months, with variation depending on application completeness and regulator workload.
Own funds requirements range from €50,000 to €150,000 based on CASP service classification, with higher thresholds applying to trading platform operators and custody service providers.
Substance requirements mandate a registered address in Lithuania, with virtual office arrangements permissible during the initial licensing phase, transitioning to physical premises as operations scale.
CASP authorization from the Bank of Lithuania grants the right to provide crypto-asset services across all 27 EU Member States without obtaining separate national licenses in each jurisdiction.
The Bank of Lithuania accepts applications through the LBIS e-portal, enabling completion of the entire authorization process without physical presence in Lithuania.
Post-authorization requirements include quarterly and annual supervisory reporting, continuous capital adequacy maintenance, AML/CFT compliance monitoring, and annual external audit certification.
Following expiration of transitional provisions, provision of crypto-asset services without valid CASP authorization constitutes a regulatory breach carrying potential criminal liability under Lithuanian law.
