Lithuania, a vibrant Baltic nation, has become a sought-after destination for entrepreneurs and firms looking to expand into the European market. Known for its robust digital infrastructure, business-friendly policies, and strategic location within the European Union (EU), Lithuania offers an ideal circumstances for startups, SMEs, and large corporations alike. Whether you’re a local entrepreneur or a global investor, understanding the operation of company registration in Lithuania is crucial to setting up your enterprise operations successfully.
This complete guide will take you through the key measures, demands, and deliberations for enrolling a company in Lithuania.
Why Choose Lithuania for Your Business?
Lithuania’s growing reputation as a business hub stems from several factors:
- Favorable Business-Company Environment: Country ranks high in the World Bank’s Ease of Doing Business index, thanks to streamlined processes and supportive governmental policies.
- Strategic Location: Situated in the heart of Europe, Lithuania offers access to EU markets and serves as a gateway to Scandinavia, Eastern Europe, and beyond.
- Digital Infrastructure: Lithuania is recognized for its advanced digital economy, including an e-residency program that allows non-citizens to establish enterprises remotely.
- Tax Benefits: With competitive corporate tax rates and incentives for small business-companies and startups, Lithuania is an attractive destination for cost-proficient processes.
- Skilled Workforce: The country boasts a highly educated, multilingual workforce, which is an asset for businesses across industries.
Step 1: Choose a Business-Company Structure
The 1 step in enrolling a corporation in Lithuania is deciding on the lawful form of your firm. The most common types of enterprise entities include:
Private Limited Liability Company (UAB)
- The UAB is the most popular choice for small to medium-sized enterprises.
- Requires a minimum share capital of €2,500.
- The liability of shareholders is limited to their capital contributions.
- A UAB can have one or more sharers, and they can be individuals or lawful entities.
Public Limited Liability Company (AB)
- Ideal for larger enterprises that may want to trade shares publicly.
- Requires a minimum share capital of €40,000.
- More regulatory demands compared to a UAB.
Sole Proprietorship (Individuali Veikla)
- Best suited for small-scale entrepreneurs and freelancers.
- No minimum fund demand.
- The owner is personally liable for business-debts.
Branch or Representative Office
- Allows non-citizen companies to establish a presence in Lithuania.
- A branch office can engage in commercial activities, while a representative office is limited to non-commercial functions like marketing or customer support.
Partnerships (TŪB or KŪB)
- Includes general partnerships (TŪB) and limited partnerships (KŪB).
- Partners share profits, losses, and liabilities according to their agreement.
Step 2: Reserve a Company Name
Before proceeding with enrollment, you must assure your chosen firm name is unique and complies with Lithuanian naming rules. The name must not:
- Be identical or too similar to existing enterprise names.
- Mislead the public about the nature of the enterprise.
- You can check the availability of a business-name through the Lithuanian Register of lawful Entities. Once approved, the name will be reserved for your use during the roll process.
Step 3: Register the Company
To enroll your enterprise, you need to submit the needed preparation to the State Enterprise Centre of Registers (Registrų Centras). The enrollment process can be completed online or in person.
Required Documents
The specific papers needed depend on your chosen business structure but generally include:
- Articles of Association: A formal paper outlining the company’s purpose, structure, and operational rules.
- Founding Agreement or Act: A paper signed by the founders that formalizes the organization of the firm.
- Shareholder Info: Details about the sharers and their contributions.
- Proof of Enrolled Address: A physical or virtual address within Lithuania for official correspondence.
- Proof of Capital Contribution: Bank statements confirming the deposit of the minimum share fund into a Lithuanian bank account (for entities like UAB or AB).
- Director Details: Info about the appointed director or management board.
Registration Fees
The enrollment fee depends on the type of business-entity and the chosen enrollment method (online or offline). The fee for registering a UAB online typically ranges from €57 to €70.
Processing Time
The standard processing time is 2-3 business days for online applications and up to 5 business days for paper-based submissions.
Step 4: Obtain a Business License (If Required)
Certain industries in Lithuania require a business license or permit to operate. These include sectors like finance, healthcare, real estate, and transportation. Check with the relevant rules bodies to determine if your business activities require permitting.
Step 5: Register for Taxes
Once your business-company is enrolled, you must register with the Lithuanian State Tax Inspectorate (VMI) for tax purposes. Depending on your corporation actions, you may need to enroll for:
- Corporate Income Tax (CIT): The standard rate is 15%, but reduced rates (as low as 5%) are available for small enterprises meeting certain criteria.
- Value Added Tax (VAT): Enrollment is mandatory if your annual turnover exceeds €45,000 or if you conduct intra-EU trade. The standard VAT rate is 21%.
- Payroll Taxes: If you hire employees, you must withhold and remit income tax and social security contributions.
Step 6: Open a Corporate Bank Account
Opening a corporate bank account in Lithuania is a critical step for managing your company finances. Most stakes in Lithuania require:
- Company enrollment papers.
- Proof of identity for sharers and managers.
- A business-plan or characterization of intended activities.
- Alternatively, Lithuania’s e-residency program enables non-residents to open virtual bank accounts, which is particularly convenient for slim enterprises.
Step 7: Comply with Employment Regulations
If you plan to hire employees, you must comply with Lithuania’s employment regulations, which include:
- Signing employment contracts.
- Providing mandatory social security and health guarantees.
- Adhering to minimum wage restrictions(as of 2025, the monthly minimum wage is approximately €924 gross).
- Ensuring workplace safety and equality.
Additional Tips for Foreign Investors
- E-Residency Program: Lithuania offers an e-residency program, enabling non-citizen enterpreneur to start and manage a business remotely. This is particularly beneficial for digital nomads and startups.
- Legal Assistance: Hiring a local lawful or enterprise consultant can simplify the registration method, especially for non-citizen investors unfamiliar with Lithuanian laws.
- Grants and Incentives: Lithuania provides various financial encouragements, including EU-funded grants and tax relief programs, to support inventive startups and industries in priority sectors like technology and green energy.
Conclusion
Enrolling a firm in Lithuania is a straightforward technique, thanks to the country’s efficient rules substructures and business-friendly surroundings. By carefully picking the fitting business structure, preparing the needed papers, and adhering to lawful and tax debts, you can establish a solid foundation for your business in this dynamic EU member state.
Whether you’re a provincial entrepreneur or a transnational investor, Lithuania’s strategic location, skilled workforce, and advanced digital infrastructure make it a compelling choice for venture expansion. With the right planning and aid, your venture in Lithuania can thrive in the heart of Europe.