Growing fintech hub Lithuania has welcomed roughly 100 financial companies and start-ups from the UK and other countries, who have applied for a licence in order to safeguard their access to the EU after Brexit.
Speaking to Reuters, Lithuania’s central bank said that several firms have applied for a licence to ensure that access to the European Union is not cut off after Britain departs from the bloc on March 29.
With the deadline fast approaching, the UK has not yet finalised a deal regarding ties with the EU post-Brexit. As a result, several firms with licences issued in Britain may no longer reserve the right to provide their services in the eurozone.
The companies, of which a quarter are UK-based, are now looking to acquire electronic money institution licences, said a member of the board at the central bank Marius Jurgilas, speaking to Reuters in an interview.
“It seems that the companies, many of which are quite large, are behaving like a student who only starts worrying on the eve of an exam,” he said.
Mr Jurgilas added that Lithuania offers the opportunity of processing an electronic money institution licence in three months, versus other EU countries which may take up to a year to complete the same process, giving it an advantage over other fintech hubs such as Luxemburg, Ireland or Belgium.
According to Jurgilas, who refrained from exposing company names due to confidentiality laws: “It is an onslaught… We do not have the resources to process all the applicants. We have to pick-and-choose, prioritising the least risky applicants.”
In October, Ireland’s central bank announced that the number of financial services firms looking to set up offices in Ireland due to Brexit concerns had hiked, adding that it is processing over 100 applications.
According to government data, as of January, Lithuania has issued a total of 83 licences to fintech companies and start-ups, second to Britain among European countries. The sudden spike in applications arrives after Vilnius began drawing in fintech firms only a few years ago.
Jurgilas rejected the implication that companies were attracted to Lithuania because of its benign regulatory regime.
The “European Union has institutions which make sure that market supervisors in all its countries, including Lithuania, work to the same standard, and if any Lithuanian-registered bank grows into significant size, its supervision will be taken over by the European Central Bank”, he said.