Lithuania could become the EU’s crowdfunding business hub.
Beginning November 10, 2021, the European Parliament and European Council regulation on European crowdfunding business service providers will come into power and will bring fundamental changes to the EU’s crowdfunding market. Starting November 10, a company with a crowdfunding licence in any EU country will be able to offer crowdfunding services across the EU. This means that crowdfunding companies established and licensed in Lithuania will be able to serve the entire EU market.
In response to the changes to crowdfunding regulation in the European Union, the Lithuanian creator of alternative financing platforms CreditOnline and the attorney office EXE.legal signed a strategic partnership agreement on providing integrated solutions to crowdfunding service providers. This one-stop-shop of legal and technological services is expected to help the crowdfunding market expand its business in the EU.
According to the head of the attorney office EXE.legal Dr Paulius Astromskis, the Lithuanian business environment and the growing reputation of Lithuania as the EU’s fintech centre could help the country attract new crowdfunding market players who would develop their business from Lithuania. “Lithuania holds 11th place of 190 countries in the global Doing Business ranking. This means that, in general, we can offer especially favourable business conditions to companies that want to build their business in Lithuania. Furthermore, Lithuania has markedly improved its reputation as Europe’s fintech centre over the past few years, with an ideal ecosystem and high-quality oversight. Due to these and a myriad of other reasons, Paulius Astromskis, the head of EXE.legal, says the new crowdfunding market regulations could be especially favourable for Lithuania,”.
According to Juozas Rupšys, the founder and head of CreditOnline, Lithuania has deep traditions in creating alternative financing platforms. As of late, platforms created in our county have been touted as some of the best in the world. For example, the financing solutions created by CreditOnline have appeared among the top 10 best platforms on the prestigious GoodFirms ranking. In addition, one of the world’s leading service, product and software review websites, Digital.com, included CreditOnline among its Top 20 global loan servicing software creators.
Furthermore, the rapid growth of the crowdfunding market in Lithuania shows that our specialists know how to grow this business niche. Lithuanian banking figures indicate that in the first half of this year, crowdfunding platform operators formed a third more contracts than over the entirety of 2020, and the combined value of financed projects has also grown by a third. One of the reasons for such growth lies in how both Lithuania and the entire Eurozone have seen citizen savings fluctuate around the historical maximum and so, people are actively seeking means of effectively utilising their savings. For example, just in Lithuania, the citizens’ banking deposits increased by around 4 billion euros since the beginning of the covid pandemic, reaching 19.4 billion euros. Similar trends acan also be seen in other Eurozone countries. Thus, the new regulations will open up new opportunities for these investors to invest, for project developers to receive necessary financing and for crowdfunding platforms to facilitate the aforementioned parties’ deal-making.