Lithuanian laws do not establish any special/simplified regime for EU sub-threshold AIFMs. EU sub-threshold AIFMs (i.e. registered only, not authorized) must not market any AIFs to investors in Lithuania. Any marketing of AIFs in Lithuania requires i) an authorization by the home member state of EU-AIFMs and a marketing notification, or ii) an authorization of a non-EU-AIFM by the state of reference and a marketing notification.
Reverse solicitation in the context of marketing of AIFs is not specifically defined by the Lithuanian law. However, we note that principle of "reverse solicitation" as introduced by Directive 2014/65/EU on markets in financial instruments (MiFID II) is now established in Lithuanian laws implementing MiFID II. This principle provides that where a client initiates at its own exclusive initiative the provision of an investment service or activity by a third-country firm, the requirement for authorization shall not apply to the provision of that service or activity. Even if, MiFID II is not relevant in the context of activities of AIFM, however, it should be expected that the regulator might apply this principle when determining the limits of permitted reverse solicitation with respect to other financial services and activities.
Thus, in case of reliance on "reverse solicitation", German sub-threshold AIFMs should have evidence of prior initiative of Lithuanian investors to invest into AIFs managed by such AIFMs. This also means that fundraising activities shall avoid targeting of the Lithuanian market.
As such, we understand that the most practical way to get some comfort in true reverse solicitation scenarios is to have evidence of the initiation of communication by the investor. Alternatively, the Lithuanian regulator could be asked to issue a non-binding opinion based on a defined set of facts.
Local counsel notes, that even if the concept of reverse solicitation is known to the regulator, however, it has not yet been tested in Lithuanian courts. Consequently, there is a great degree of uncertainty when it comes to its interpretation and application.
The information in our toolbox provides managers of private equity or venture capital funds with an initial overview of certain framework conditions in the respective country. It does not provide advice on the law of any country, neither does it substitute such advice. Before marketing a fund into the respective country, it is at all times necessary to seek expert advice. Our team is happy to assist you with all questions at any time.