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Vilnius, the capital of the Republic of Lithuania, serves as a growing hub for funds and asset management activities within the Baltic region. Lithuania has developed a modern and business-friendly legal and regulatory framework for the establishment, operation, and supervision of investment funds, asset managers, and other financial institutions. The sector covers a variety of undertakings, including investment funds, pension funds, private equity, venture capital, and wealth management services. Both institutional and private investors can find significant opportunities in Vilnius, given the city’s position within the European Union and its alignment with EU directives and regulations applicable to the financial sector.
There are several common situations in which individuals or businesses might need legal help in the field of funds and asset management in Vilnius:
Funds and asset management activities in Vilnius are primarily governed by the legal acts of the Republic of Lithuania and European Union legislation. The key local law is the Law on Collective Investment Undertakings, which regulates the formation, operation, and supervision of investment funds in Lithuania, including retail and professional funds. Additionally, the Law on Management Companies of Collective Investment Undertakings, the Law on Markets in Financial Instruments, and the Law on Securities provide specific guidelines on licensing, investor protection, and ongoing obligations for fund managers and advisors.
The Bank of Lithuania acts as the main supervisory authority for funds and asset management. It is responsible for the licensing of asset management companies and funds, monitoring compliance, and providing guidance on regulatory changes. Lithuania has harmonized its legal framework with EU directives such as UCITS (Undertakings for Collective Investment in Transferable Securities), AIFMD (Alternative Investment Fund Managers Directive), and MiFID II (Markets in Financial Instruments Directive), which ensures that Lithuanian-licensed funds and asset managers can operate across the European Economic Area, subject to passporting rights.
Additional regulations relate to anti-money laundering, risk management, governance, and disclosure requirements. There are also specific taxation rules for funds and asset management activities, which are important for both managers and investors to consider.
The primary regulator is the Bank of Lithuania, which oversees licensing, supervision, and ongoing monitoring of financial services providers, including funds and asset managers.
Lithuania allows the establishment of retail funds, alternative investment funds (AIFs), UCITS funds, venture capital funds, real estate funds, and pension funds, among others.
The process involves creating the necessary legal entity, preparing fund documentation, meeting minimum capital requirements, and obtaining a license from the Bank of Lithuania. The requirements vary depending on the type of fund.
Asset management companies must be licensed, maintain adequate capital, establish risk management systems, and comply with AML requirements and investor protection obligations.
The licensing process may range from three months to one year, depending on the complexity and completeness of the application.
Yes, Lithuanian law and EU passporting rights allow both local and foreign investors to participate in investment funds established in Lithuania.
Funds and their investors may be subject to taxation on income and returns according to Lithuanian tax law and any applicable double taxation treaties. Some funds enjoy tax exemptions on certain types of income.
Lithuanian law includes strict requirements on transparency, disclosures, information to investors, segregation of client assets, and complaint mechanisms. EU directives provide additional protection.
Disputes are typically resolved through negotiation, mediation, or litigation in Lithuanian courts. Some agreements may also include arbitration clauses.
Asset managers must implement effective AML policies, conduct customer due diligence, monitor transactions, report suspicious activities, and regularly train staff on AML matters.
The following organizations and resources can provide additional guidance and support:
If you require legal assistance in funds and asset management in Vilnius, consider the following steps:
Taking these steps with the help of a legal professional can help you protect your interests, navigate local laws confidently, and make informed decisions in the field of funds and asset management in Vilnius, Republic of Lithuania.
