Lithuania is a small country, only 3 million people, but within only six years it went from having 55 FinTechs in 2014 to 230 in 2020. Germany in comparison had about 1,000 start ups in 2021 in a country with 83 million people. Once the UK left the European Union, a number of their FinTechs moved to Lithuania. The country facilitated EMI or electronic money institution licenses for European business.
Lithuania encourages this development
Getting the license doesn’t take that long, only about a year. It makes business sense to move operations there, especially when Marius Jurgilas, a board member of the Bank of Lithuania, regularly gives speeches about the FinTech friendly environment.
The knowledge base and regulatory atmosphere facilitate expansion. But Russia’s invasion of the Ukraine poses a problem so the country has declared a state of emergency.
Internet problems
Dimitri Gugunava of Sumup spoke of the country’s meteoric rise in this sector. “Lithuania ended up in the right place at the right time. It will be hard for others to follow. Lithuania is ahead now in building a self-reinforcing ecosystem of attracting more FinTech — which attracts more talent, which attracts more FinTech investors. It will be hard, just by copying the model, to achieve the same results.”
But Russia may not stop at Ukraine. Internet outages will create problems. Kerry Hallard is a CEO of the Global Sourcing Association. He mentioned a company in Kharkiv had only 20% internet.
Some evacuations happening
Some companies are helping their workers move to less volatile areas. Wix has evacuated staff to Poland and Turkey. Revolut is offering financial help to those who wish to move.
Lithuania belongs to NATO and the Union so it would receive military support. Unlike the Ukraine, the FinTech sector is huge with lots of corporations because of that EMI license. Employees might be located in different places though. Russia hasn’t been terribly happy with the three Baltic nations. Lithuania, Estonia and Latvia are the only former Soviet countries that joined NATO.
