Nestled in Europe’s Baltic region, Lithuania is known for the fresh and lucrative business opportunities it offers. The country boasts impressive biotechnology, laser, aviation, information technology, and telecommunications industries.
The largest among the three Baltic States, Lithuania, features an abundance of natural resources. In fact, it has the highest standard of living among the three Baltic States. Located conveniently close to the Baltic Sea shelf, Lithuania has sizable oil reserves. The profitable and plentiful resource is exported to the rest of the world, using the country’s sophisticated transportation network that comprises rails, roads, airports, and seaways.
The Lithuanian ICT, metal processing, heavy machinery, and electrical equipment sectors are all viable investment opportunities. The wood industry and related sectors, including the paper and furniture making industries, have risen to prominence over the years and continue to be a notable business area in the country. Biotechnology and outsourcing are also two of the most thriving branches of the Lithuanian economy.
The Lithuanian government is well aware of the country’s investment potential and continues to provide various incentives to foreign investors who wish to expand to Lithuania. Tax benefits and low-rate bank loans are just a few of the plethora of these powerful incentives!
Forms Of Companies In Lithuania
- UAB – “Uždaroji akcinė bendrovė” – Private Limited Liability Company
- AB – “Akcinė bendrovė” – Public Limited Company
- KŪB – “Komanditinė ūkinė bendrija” – Limited Partnership
- TŪB – “Tikroji ūkinė bendrija” – General Partnership
- “Individuali veikla” – Sole Proprietorship
What is the difference between UAB and AB in Lithuania?
Most entrepreneurs choose to establish a UAB, as a low capital deposit of 10,000 LTL is required by the government. 25% must be paid before the company’s formation. It has very simple structure and is easy to establish remotely.
An AB is suited for large-scale business operations; it must have at least 40,000 EUR of share value deposited in its business bank account, and at least 1 shareholder and 1 director are mandatory. The company can trade publicly.
Fundamentals Of A Limited Liability Company
Corporate Tax in Lithuania
VAT in Lithuania
15%, 5% or even 0%
Fundamentals of limited liability companies in Lithuania
|Limited liability company||UAB|
|Minimum Share capital||2500 EUR. Min 25% needs to be paid up|
|Registered office required||Yes|
|Physical office required||No|
|Min. number of Shareholders||1|
|Min. number of Directors||1|
|Local Director required||No|
|Bank signatory must travel||Yes|
|Timescale for company formation||5 - 10 days|
|Timescale for bank account opening||7 day|
|Timescale for obtaining VAT number||7 days|
|Statutory audit requirements||Yes, if turnover exceeds EUR 1.4m|
|Shelf companies available||Yes|
How can I set up my company in Lithuania?
The process of registering a new company in Lithuania is pretty straightforward as long as the correct documentation is submitted.
The first step is preparing the Articles of Association and reserving a company name. Upon completion, a specific bank account must be opened, which is only intended for the purpose of the share capital payment. We can do that on your behalf remotely.
The last step is having all the required documents notarized. At CompyCo, we can notarize the documents on your behalf so a visit isn’t required. Only then can the company be registered with the Lithuanian Register of Legal Entities.
It will take 5 business days for the Register to issue the company documents.
Once the company has been set up, the client can choose to:
- Take the online business bank account
- Open the bank account in a high street bank (In this case, a visit will be mandatory and CompyCo can provide assistance accordingly)
The option of remote company registration and bank account opening is possible.
Setting up a company in Lithuania can pose to be a challenge, to say the least. Our experienced team is equipped with the knowledge and expertise required to handle company registrations so you don’t have to worry about stressful paperwork and hassle.
Over the years, we’ve helped countless entrepreneurs kick-start their businesses in Lithuania. By taking care of the convoluted start-up procedures, we help each client save time, money, and valuable resources.
Make the most of Lithuania’s growing industries and lush, green landscapes so you can balance work and play without feeling overwhelmed about where and how to start.
We’ll take care of all the anxiety-ridden procedures so your business can hit the ground running!
As a full-service company, we offer individualized expertise to further facilitate the process. From taking care of the financial, legal, and corporate intricacies to equipping you with the required information, our professionals will give your business the boost it deserves in a foreign environment!
Bank Account Opening
Each year, Lithuania welcomes a large number of passionate and motivated individuals who are seeking a fresh start. Whether you’re moving to Lithuania to crystallize your business plan or wish to join forces with an established company, opening a bank account should be high up on your priority list.
Confused about where to start? We’ll help make things much easier.
The Lithuanian banking system is extremely advanced, so the process is quite straightforward. The two essential documents required to open a bank account in Lithuania include:
- Passport or ID (e.g. national identity card)
- A residence permit
Start the process by selecting a bank and finalizing the requested paperwork. We suggest choosing a reputable bank that can serve all your needs as a non-resident.
Here are six of the most established and trusted banks in Lithuania:
Familiarize yourself with the banking fees, which generally include ATM fees, normal bank fees, and fees for internal transfers. You’ll be assisted with the proceedings along the way. Learn more about opening a bank account here.
Accounting & Taxation
The accounting and taxation obligations to take into consideration are:
- The corporate income tax is levied at 15%. However, small companies can apply a reduced rate of 0% or 5% if certain conditions are met.
- Annual tax returns must be paid every year by the 1stof June. Penalties are applied in case this filing is not on time, up to 50% of the amount of tax returns of the company.
- VAT returns must be filed every month.
How can you employ staff in Lithuania?
CompyCo takes care of your registrations, writing employment agreements, PEO or direct employing, recruiting, and payroll, among a wide range of other requirements.
We handle each aspect of employment so you can have ample time to focus on your business!
If you wish to develop a deeper understanding of the requirements in Lithuania, we can help you out. Our experienced team will set up an account with state-of-the-art software that provides you with comprehensive insights into HR and payroll requirements and obligations.
With each concern taken care of, you can handle the complexities and intricacies of the process with ease and adroitness. This will ultimately help you gain full control over your obligations as an employer.
Have any questions? Take a look at our HR services page for more information about our International HR services!