Lithuania plans to create a blockchain-powered system to permit foreign businesses to register their operation in the EU remotely. The initiative is supported by the central bank, and it will allow 'Virtual Limited Liability Companies' to benefit from Lithuania’s innovation-oriented regulatory sandbox framework.
The project will be welcomed by many companies that want to remotely create and run a business in the EU. It is expected to be especially relevant for those operating in the fintech space. Analysts from business development agency Invest Lithuania believe that this type of service would be welcome by companies from the US, Singapore, and Israel, among others.
Central bank board member Marius Jurgilas was cited as saying:
“Bank of Lithuania is already building LBChain - blockchain-based solutions accelerator for fintechs. [The] Initiative to create virtual companies on blockchain is a move towards even more ambitious goal - creating LTChain, i.e. moving relevant public services on blockchain.”
Mantas Katinas, managing director of Invest Lithuania, said that countries endorsing instant solutions would benefit in the long run as the world moves to a paper-free future.
“As of now, the country already offers fintech companies the ability to receive a payments institution (PI) or e-money institution (EMI) license in just three months, which is 2-3 faster than in other EU countries. These draft proposals on the possibility of establishing a virtual company which can be managed remotely is another step in the right direction,” he added.
Katinas stressed that Virtual Limited Liability Companies could range from small enterprises owned by a single person to large publicly traded companies. Lithuania would recognize them as corporate entities with full rights, and they would have to present financial reports and pay taxes in Lithuania.
If the initiative is successfully implemented, companies from across the globe may register in Lithuania starting from 2019.
Lithuania is one of the 22 EU countries that recently signed the declaration on the establishment of the Blockchain Partnership Initiative at the EU Digital Day 2018.
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