The Eastern European nation is planning to make the most of Brexit, with the aim of becoming a fintech hub and attracting the development of British subsidiaries.
As BusinessInsider reveals, Lithuania “is betting that Brexit can help it become a global fintech hub” as the country “seeks to attract British companies setting up subsidiaries in the EU.”
“I cannot deny that,” explained Marius Jurgilas, a member of the board of the Bank of Lithuania.
“We are not saying that we will be attracting top firms from the fintech hub of the world, which is and always will be London, to the new booming financial sector in Lithuanian, no,” Jurgilas said. “But there is a huge flow of firms — and we want to participate in that flow — who want to hedge the risk of Brexit.”
“This is the state of affairs that everyone has to deal with and we’re just part of the game,” Jurgilas continued.
With finance firms facing the risk of losing passporting rights, “which allow them to sell services across the 27 member bloc”, due to Britain’s uncertain future relationship with the EU, “many businesses are setting up licensed subsidiaries in other EU countries.”
Lithuanian MEP Antanas Guoga, explained: “I think [Brexit] is a big opportunity because we’re cost-wise a very competitive country, people are very diligent and hard-working, and, because of Brexit, a lot of companies are in a position to move out of the United Kingdom to make sure they’re safe and secure.”
While Lithuania may seem like something of an “unlikely contender” when it comes to transforming the nation into a fintech hub, the country already has 117 fintech companies operating within its borders, which demonstrates “impressive” growth. Among these are UK start-ups Revolut and TransferGo. TransferGo’s CEO is originally Lithuanian, but explained that he also selected Vilnius as his start-up’s base due to its “innovative regulating body”.
But what are the benefits of choosing Vilnius above other European capitals?
“Being in the eurozone gives us the same status of Frankfurt,” Guoga said. “We’ve got a lot of hard-working people with knowledge of fintech who are not costing as much as they would in other cities because of the living costs. The country is very clean. There’s a lot of different benefits and that’s why there’s only more and more people coming here.”
“I’m just in the blockchain centre here and I can see the building next to me is all filled by Barclays,” he continued. “Barclays has the biggest centre of development here in Vilnius. Further on I can see Nasdaq. A lot of the IT is all done from here.
“Having Barclays here, having Danske Bank, having Nasdaq here and having many many other startups and also big multinationals have cemented our place as a place for fintech development.”
“I think we’ll be on target to do a lot more [e-money licenses] this year. The momentum is definitely there. We should aim to issue 100 a year as soon as possible. The demand is very wide.”
