Why FinTech companies are heading to Lithuania

In recent years, Lithuania has stood out as the go to place for companies within the financial sector to set up shop.

The public authorities have taken great strides to make Lithuania attractive to foreign business by offering not only “FinTech friendly” regulation but also competitive costs, access to a wider talent pool and most importantly, critical support from the government.

These continued regulatory changes coupled with an influx of over 200 fin-tech companies have made Vilnius the second largest FinTech hub in Europe by the number of licensed companies currently operating there.

So why have Lithuania decided to open their doors? FourthLine’s Director, Dan Waltham recently sat down with Ieva Brimeriene, a Legal Counsel and Compliance Advisor operating in the FinTech space, who points out that “on the strategic level, the Banks of Lithuania is very much aiming to become a facilitator of innovation. But at the same time, it expects the licensed entities to do their part of their work properly. Meaning that being an open and flexible regulator is still a regulator whose main duty is to ensure sustainability of the financial sector and the protection of customers”.

Despite the attractive regulatory environment for FinTech’s in Lithuania, there are still challenges for companies to consider, namely in product and IT development, as well as compliance- related issues. However this is most in part due to changes in the regulatory framework at the EU level, with directives such as PSD2 increasing the administrative burden on companies.

For many companies, it seems as though the positives far out-weigh the negatives. In terms of job creation and the sheer number of companies entering the market, Lithuania is set to expand steadily into 2021. In coming years, we should also expect to see further advancement in digital banking specifically, which in turn should increase the demand for SPB and other types of licenses.

As we have seen over the past few years in other countries, open banking is also set to provide welcome diversity into the Lithuanian market, fostering new business models and encouraging more collaboration amongst businesses within the space.

Why now and why Lithuania? After escaping soviet rule and due to its small size, over the last thirty years the country has nurtured the capacity to adapt quickly to the changing markets and innovate. Stellar efforts on part of the government is only half the story. Lithuania itself is among the most bilingual and educated nations within Europe and is hungry to stand-out as a world leader in financial technology innovation.

Invest Lithuania (the official agency for Foreign Direct Investment and Business Development) are  working extensively with firms to ease their transition into the country and getting them off on the right footing. In a recent blog post, they put the success of FinTech's in Lithuania down to the quality of people. Saying that Lithuania "has more STEM graduates per capita than any other country in the EU, and today there are over 31,500 professionals in the country’s ICT sector – over 2,600 of them are working for FinTechs. What’s more, big players in finance like Danske, SEB and Western Union have established multifunctional business service centres in Lithuania, resulting in an abundance of specialists with experience in both finance and IT".

Furthermore, Lithuania’s well-established Global Business Services industry supplies an increasing number of specialists in AML & Compliance, customer support and Finance & Accounting.

Along with a competitive talent market and more and more developers entering the market every year, we should see exponential growth from Lithuania in years to come and many more foreign companies jumping on the bandwagon.


September 14, 2020
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Matthew Fitzsimmons
Written by Matthew Fitzsimmons

Matthew is a Marketing Executive within the FourthLine Marketing Team, helping to drive business growth by creating engaging written and visual content.