Lithuania is the biggest of the Baltic states and regards itself as the region’s economic powerhouse. Certainly it has succeeded in attracting significant inflows of foreign direct investment, with investors encouraged by a combination of a stable economy, low inflation, low labour costs and a liberal business environment. Corporation Tax is 15%, one of the lowest rates in the EU. But investors are still advised to tread carefully.
If you’re considering how to set up a Lithuanian company then please contact us for expert advice and information.
A summary of Lithuanian Corporate Taxes is available here.
Frequently Asked Questions about Lithuania
What are the main types of Lithuanian company formation?
There are four main forms of company for foreign investors to incorporate in Lithuania:
– Public Limited Company (AB)
– Private Limited Company (UAB)
– Partnership
– Branch or Representative Office
What are the main features of a Lithuanian Public Limited Company?
– The most common business vehicle for medium/large companies
– Minimum share capital is €43,443, at least 25% to be paid up
– Minimum of three board or supervisory council directors
– Auditors required to prepare annual financial statements
– Company and its shareholders have limited liability
What documents are required to register a Public Limited Company?
– Incorporation agreement or act of incorporation
– The company’s articles of association
– Minutes of the founding meeting
– Confirmation of Lithuanian bank account
– Confirmation of share registration with Securities Commission
– Report on company together with auditor’s opinion
What are the main features of a Private Limited Company?
– This is the most popular format for smaller foreign investors
– Minimum share capital is €2,896, with at least 25% to be paid up
– No requirement for board or supervisory council
– Maximum number of shareholders is 250
– Company and its shareholders have limited liability
– Conditional requirement for auditors (e.g. if annual revenue exceeds €1.4m)
What documents are required to registered a Private Limited Company?
– Incorporation agreement or act of incorporation
– The company’s articles of association
– Minutes of the founding meeting
– Confirmation of Lithuanian bank account
What are the main features of a Lithuanian Partnership?
– Available as a General or Limited Partnership
– General Partnerships have unlimited liability
– Limited Partnerships have limited liability
What are the main features of a Branch or Representative Office in Lithuania?
– Foreign parent is responsible for all liabilities
– Branch can conduct trade within scope set by parent
– Representative Office can promote but cannot trade
– At least one manager must reside in Lithuania
– No formal auditing requirements
Are there financial incentives available in Lithuania?
For foreign investors considering company registration in Lithuania, investment incentives are centred on three Free Economic Zones in the cities of Klaipeda, Utena and Kaišiadorys. They include the following:
– Tax holidays and tax reductions for companies investing over €1 million
– No taxes on dividends paid on foreign investments
– EU support funds for companies setting up in Klaipeda
How easy is it to close a Lithuanian company?
Please contact us in order to discuss closing your company in Lithuania.
How easy is it to recruit staff in Lithuania?
Lithuania used to be known as Soviet Silicon Valley, such was the reputation of its workforce for innovation and productivity. The Soviet era may now be over but its reputation remains intact.
Lithuania’s workforce is generally young, well educated and very highly motivated, while labour costs are among the lowest in Europe.
If you want the pick of the crop, our recruitment specialists are ready to help.
What about banking facilities in Lithuania?
Lithuanian banks offer the standard range of facilities, including foreign exchange and international payments. There are no foreign exchange restrictions.
For assistance with opening a bank account in Lithuania, please contact us.
What is the regulatory environment like in Lithuania?
– Government committed to a free-market economy and a liberal business environment
– Member of the WTO and has ratified most international treaties
– Investment laws conform to European Union standards
– Foreign investors are free to buy Lithuanian companies
– Unrestricted movement of capital and dividends
– Double-taxation agreements with many countries
