Lithuania is a paradise for fintech companies

The country provides excellent conditions for the development and support of start-ups.
Lithuania, a small but dynamic country in the Baltics, is fast becoming one of the leading fintech hubs in Europe and the world. Home to companies such as Vinted and Nord Security, the country offers a number of first-class facilities for fintech companies, both domestic and foreign, looking to establish a base there, reports Euronews.
With a population of 2.8 million, Lithuania is one of the smaller countries in Europe, especially compared to Western European powers such as Germany, the United Kingdom, France and Spain.
However, it has quickly established itself as a country that is much stronger than the rest when it comes to developing and supporting start-ups, especially fintechs.
Lithuanian startups were the fastest growing in the Baltics last year, according to the "Lithuanian Startup Ecosystem 2023" report.
Between 2018 and 2023, the total enterprise value of the country's startups increased 7.1 times. By comparison, in the Baltics this indicator is 2.7x over this period, while in Central and Eastern Europe (CEE) it is 3.6x.
Among CEE countries, Lithuania also ranked second in venture capital funding last year, raising €292 million.
Gintare Narakienė, former head of Startup Lithuania, said, "In 2023, Lithuania's startup ecosystem continued to develop steadily, establishing itself as one of the most promising and dynamic startup hubs in the region."
In addition to Vinted and Nord Security, there are a number of new companies in the country, such as Argyle, CityBee and PVcase. They are valued at between €200 million and €1 billion.
Some of the other fast-growing companies valued at less than €200 million include Affise, Whatagraph and BitDegree. Hostinger, Bored Panda, Omnisend and Kilo Health have also seen impressive growth.
In the capital Vilnius alone, there were more than 170 fintech startups in 2023, with a total value of around EUR 1.8 billion. They raised venture capital worth approximately EUR 228 million in the 18 months to February 2024. Some notable fintech startups based in Vilnius are Amlyze, Kevin, TransferGo and HeavyFinance.
These fintech companies cover various industries such as financial management, payments, mortgages and lending, regulatory technology, cryptocurrencies, wealth management, insurance, crowdfunding, etc.
One of the main reasons why Lithuania attracts so many fintech companies is the high quality of talent, with a diverse set of highly skilled employees.
Lithuania also prioritises employee satisfaction and well-being, which has led to the creation of a healthy, well-developed work environment that places great importance on work-life balance and mental health. As such, they are able to achieve better results, which also leads to easier employee retention.
The above approach resonates particularly well with younger workers, who make up the majority of the workforce of fintech companies in Lithuania.
Employee engagement is also evident in the design of the offices - bright colours, modern design and open, working spaces. Perhaps unsurprisingly, Lithuania also won the top spot as the world's happiest country for people under 30, according to the World Happiness Report 2024.
Strong government support and initiatives
Lithuania offers a strong state support system for fintech companies setting up in the country, as well as several initiatives through organisations such as Startup Lithuania, part of the Lithuanian Innovation Agency, Invest Lithuania, Go Vilnius and Vilnius Techfusion, among several others.
This includes connecting various startup founders, running accelerator programs and workshops, as well as offering support schemes, consulting and much more.
These agencies also provide all the information needed by businesses, relocating employees, founders, investors and visitors to set up a company or relocate privately to Vilnius. Cadres get help on how and where to find an apartment or house, good schools, tax and legal issues, relocation services and much more.
Agencies like Vilnius Techfusion also connect different parties in the fintech, life sciences, IT and game development sectors.
Ease of doing business
The International Tax Competitiveness Index 2024 (ITCI) ranks Lithuania fifth in this indicator. Not only that, but the Business Friendly City Perception Index from Emerging Europe crowned Vilnius the most business-friendly city in Emerging Europe.
This is based on factors such as talent pool, quality of life, business climate, connectivity and infrastructure, brand, smart city development, economic potential and local government support.
Lithuania also ranks fourth in the European Union in average internet speed, according to Invest Lithuania, and is very comfortable with remote working.
Vilnius is ranked eighth in the world for remote working, with 20 co-working spaces, while also being third globally for online security. | BGNES