P2P Lending in Lithuania

June 19th, 2020
4 minutes read

The Lithuanian Market for Crowdfunding

According to data from the latest report by Cambridge Centre for Alternative Finance (CCFA) on the global market of alternative finance and crowdfunding, Lithuania had a total funding volume of €121.8 million in 2018, up from €61.3 million in 2017, which corresponds to an impressive growth rate of 98.7%. This places Lithuania’s crowdfunding market as number 15 in Europe and as number 31 (same ranking as last year) in the worldwide crowdfunding statistics. The countries topping the list in Europe are the United Kingdom, the Netherlands, Germany, France, and Italy. However, it is worth noting that Lithuania, together with the other two Baltic countries Estonia and Latvia, is home to some of the largest European-based peer-to-peer lending platforms operating on an international scale.

Best Peer-to-Peer Lending Platforms in Lithuania

Here, you will find a list of the best peer-to-peer lending platforms in Lithuania. When choosing the best peer-to-peer lending sites in a country we consider a variety of factors that you can find in the Methodology below.

More P2P Lending Platforms in Lithuania

Below, you will find a list of the remaining peer-to-peer lending platforms located in Lithuania. If a new platform has been launched since this article was published and you do not see it here, please feel free to submit the platform by using the submit formula.

Logo of Finbee Lithuania
Finbee Lithuania
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Logo of Finomark
Finomark
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Logo of Heavy Finance
Heavy Finance
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Logo of Lenndy
Lenndy
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Logo of Letsinvest
Letsinvest
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Logo of Nordstreet
Nordstreet
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Taxation on Peer-to-Peer Lending in Lithuania

For individuals, interest earned from peer-to-peer lending is taxed at a flat rate of 15% in Lithuania. The same rate applies to companies, who are taxed with a corporate income tax of 15% – and unlike the other two Baltic countries, Latvia and Estonia, there is no tax relief of interest income for companies in Lithuania.

To get a more in-depth overview of the Lithuanian tax system for both companies and individuals, we can recommend this overview made by PwC.

Keep in mind that this should not be considered tax advice and can be outdated, why you should always contact a tax adviser when handling your taxes.

Regulation on P2P Lending and Crowdfunding in Lithuania

Lithuania is one of 11 member states of the European Union that has national laws to specifically regulate crowdfunding. This regulation framework was adopted with the aim of making Lithuania an attractive place for FinTech companies as well as to enable citizens to invest in the domestic economy and create new funding channels for Lithuanian companies. Especially, the Lithuanian Law on Crowdfunding (Lietuvos Respublikos sutelktinio finansavimo įstatymas) enabled the development of debt-based P2P lending platforms and equity crowdfunding platforms by breaking down regulatory barriers.

Below, you will find an overview of some of the most important aspects of the regulatory framework for crowdfunding in Lithuania. These highlights can also be found in the impact assessment accompanying a proposal for a regulative framework on crowd and P2P finance presented by the European Union in March 2018. You can also read more about the Lithuanian Law on Crowdfunding here.

  • Bespoke Regime: Yes
  • Scope of lenders and borrowers: Securities and lending (to businesses).
  • Entry into force: 1 December 2016.
  • Passport: Yes, if MiFID platforms. No for platforms registered under exemption (Art.3 MiFID).
  • Authorisation: Registration with the Bank of Lithuania.
  • Minimum capital requirements: €40,000 or professional liability insurance (not less than €100,000 for a single liability claim and €500,000 in total); capital requirements to be re-calculated at the end of each year and must equal 0.2% of the amount of loans that have yet to be repaid.
  • Services provided: N/A.
  • Financial instruments: Financial Instruments.
  • KYC rules (suitability or appropriateness; AML checks): Suitability test for first-time engagement with each product. Risk warnings must be issued if product is deemed unsuitable.
  • Size of offer (limitations or prospectus requirements): Lower than €5 million over a 12-month period.
  • Maximum investable amounts: No limit – appropriateness test and risk warning.
  • Disclosure to investors by the issuer: The following information has to be disclosed: project & project owner characteristics, proportion of own funds used, details of the offering, security measures, existence of secondary markets. Information document needs to be prepared when the amount is between €100,000 and €5 million. At least 10% of the project has to be financed using own funds.
  • Information requirements & risk warnings by platforms: Information on the platform itself, investment risks associated with crowdfunding, project selection criteria, crowdfunding information booklet (fees, taxes, procedures). Monthly and yearly progress updates.
  • Due Diligence: Platform shall conduct project due diligence as well as publicly display the applicable criteria.
  • Conflict of interest: Platforms must disclose the fee structures for investors and project owners as well as provide applicable tax information.
  • Professional requirements: Criminal record check for platform operators, board members, and significant stakeholders.
Methodology

At P2PMarketData we are dedicated to providing an unbiased overview of the Peer-to-Peer Lending market and platforms. Among other, in our mission to bring more transparency to the market for online lending we track over 70 platforms funding volumes.

When choosing the best platforms in a country we have considered a variety of factors such as:

  • Number of investors
  • Minimum investment requirement
  • Historical annual returns
  • Diversification opportunities
  • Reinvestment opportunities
  • Educational and informational offerings
  • Platform fees
  • Total capital invested
  • Features (such as secondary market and automatic investing)
  • General transparency (the difficulty of finding who the owners are, how they make money on the platform (fees), terms & conditions and more)
  • Management team

We also look into the company’s online reputation (for example customer reviews, news, complaints, average monthly searches and social media).