The Baltic state of Lithuania has announced it is to create ‘Virtual Limited Liability Companies’, registered and administered using blockchain technology, in keeping with the region’s trend towards hi-tech solutions.
The service is expected to become available as soon as 2019 with the process of making legal updates already underway. The format will allow companies registered this way to will be subject to low regulations, in the form of an ‘innovation-friendly regulatory sandbox’. Further to this, companies can be remotely managed making it much easier to have a company registered in the EU without actually being located there. This programme will remain transparent through the use of blockchain tech, making all records immutable and administration which can be done online will make running these entities much quicker.
Ieva Tarailiene, acting Director General for the Centre of Registers stated: “Physical borders between countries are becoming a thing of the past. This ambitious project is the next logical step for Lithuania, given our track record in the field of financial technology”
Her colleague, Jonas Udris added to this: “We are striving to become the first country to offer companies the possibility to register and manage companies remotely using blockchain technology, thus ensuring transparency and security.”
The project has already received the backing of the Bank of Lithuania, an institution becoming well-known for its innovative and progressive approach to developments in fintec. Marius Jurgilas, who sits on the bank’s board has already discussed the developments with enthusiasm.
“The Bank of Lithuania is already building LBChain – a blockchain-based solutions accelerator for fintechs. The initiative to create virtual companies on the blockchain is a move towards an even more ambitious goal – creating an LTChain, i.e. moving relevant public services on blockchain.”
This is a process already established in Lithuania’s Baltic neighbour, Estonia, which currently offers more than 4,000 public services through its government’s online portal, X-road. Mantas Katinas, Managing Director of Invest Lithuania stated:
“As the world is moving towards a paper- and bureaucracy-free future, jurisdictions that adapt to the increasing demand for instant solutions will win in the long run. 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”.
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