Lithuania’s proposed rules for securities crowdfunding


A draft Law on Crowdfunding is on its way in Lithuania. Despite its small size, the country has an active crowdfunding scene, counting five active peer-to-peer platform to date. The law, which has been registered with the national Parliament, if approved, would introduce a new regulation framework for crowdfunding -i.e. peer-to-business lending and equity crowdfunding- as illustrated below.


Under the draft Law on Crowdfunding, natural persons, legal entities and other subjects (e.g., investment funds) will be able to invest vi securities crowdfunding. However, the platform operator will have to ensure that a single investor will not be able to finance projects with an amount exceeding EUR 1,000 in 12 months through the relevant platform. This restriction will not apply if:

  • the operator of crowdfunding platform assesses suitability of a specific financing transaction to an investor before presenting the latter with an opportunity to enter into the financing transaction through that crowdfunding platform (i.e., the operator assesses knowledge and experience in the area of investments)
  • the investor is a well-informed investor.


The owner of the project eligible for financing could be a natural person or a legal entity who/which has duly registered their activities for which funding is sought. Financing transactions could be made for the purposes of business, professional, scientific, research or other needs, except consuming. The project owner will be able to receive financing as a loan or in other monetary form, or through acquisition of financial instruments issued by the project owner.

The draft law distinguishes the following requirements for attracting funds:

  • if the amount to be raised is lower than EUR 100,000 in 12 months, no additional requirements for attracting funds are applied;
  • if the amount to be raised is EUR 100,000 or higher, but does not exceed EUR 5 million in 12 months, the owner of the project eligible for financing will have to draft an information document and submit it to the crowdfunding platform operator for approval. Such information document is subject to the criteria similar to those stipulated in the Law on Companies for an information document regarding public offerings of mid-range value issues;
  • if the amount to be raised is EUR 5 million or higher in 12 months, the owner of the project eligible for financing will have to issue securities in the manner prescribed by the Law on Securities, i.e., having prepared a prospectus and obtained an approval of the Bank of Lithuania. In such case only a legal entity can be the project owner.

Where the project owner seeks to enter into a financing transaction for EUR 100,000 or a larger sum through a crowdfunding platform, such project owner will have to allocate at least 10 per cent of its own funds to finance the project.


Under the draft law, only a legal entity can be the operator of a crowdfunding platform. The legal entity may gain the right to engage in such activities only when the Bank of Lithuania includes it in the Public List of Crowdfunding Platform Operators. The crowdfunding platform operator will also be able to render other financial services subject to licensing (e.g., payment services, investment services), but only after obtaining a relevant licence, save for one exception where the crowdfunding platform operator intends to engage in activities of a financial advisory firm, then such operator will not need to apply separately for an authorisation to operate as a financial advisory firm.

Only persons of impeccable reputation may act as managers of platform operators, or participants directly or indirectly holding 20 (and more) per cent of voting rights or authorised capital, or those who can exert decisive influence on the operator.

In addition, the crowdfunding platform operator will be subject to certain requirements in terms of own equity, or the requirement to have a suretyship insurance bond issued by an insurance company, or a suretyship or guarantee from a financial institution for an amount no less than EUR 100,000 per claim, and for EUR 500,000 in the annual aggregate.

The crowdfunding platform operator will also have to comply with certain organisational requirements, for example, the operator will need to assess of project owner’s reliability, will need to have a plan for continuity of activities of the crowdfunding platform operator, will need to disclose certain information, etc.


A company from other EU (EEA) Member States, which is authorised and has the right to provide financial services in its “home” Member State, can act as the operator of a crowdfunding platform in Lithuania after the Bank of Lithuania has included such company into the Public List of Crowdfunding Platform Operators. Thus, the draft law provides good possibilities for cross-border activity for operators of crowdfunding platforms from other EU (EEA) Member States.

ECN welcomes this draft law and the fact that it adopts an open attitude to other European players, thus encouraging cross-border activities.


Reference and further information: Tomas Talutis, Tvinslaw


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