Lithuania is one of the three Baltic states that gained independence from Russia in 1990. The country is an unexpected tax paradise offering corporate tax rates similar to Cyprus or Malta while offering benefits akin to any European state.
Lithuania is a member of the EU, Eurozone, NATO, and the OECD; thus, allowing non-EU company owners visa-free travel across Europe. A low tax regime, easy access to European markets, and business-friendly policies make Lithuania one of the most attractive locations for new business ventures.
Non-EU residents can either acquire an established Lithuanian company or establish a new one. Acquisition of the existing firm is easier as the registration and incorporation formalities are already taken care of whereas for establishing a new company the entire process needs to be followed anew.
Types of permissible business structures in Lithuania
Corporations, companies, and organizations in Lithuania are governed and guided by the Civil Code of Lithuania. Per the law, companies in Lithuania are considered legal persons; enjoying certain rights while bound to perform various duties.
The first step to establishing a company is to select what type of business structure one deems most suitable for their trade/service/product. The table below describes the types of business structures to choose from.
| Type | Lithuanian term | Min. paid up capital req. | |
| 1. | Joint Stock Co. (JSC/Public Limited Co. (PLC)) | Akcinė Bendrovė (AB) | €40,000 |
| 2. | Limited Liability Co. (LLC/Pvt.Ltd.) | Uždaroji Akcinė Bendrovė (UAB) | €2,500 |
| 3. | General Partnership | Tikroji Ukinė Bendrija (TUB) | No minimum requirement |
| 4. | Limited Partnership | Komanditinė Ukinė Bendrija (KUB) | No minimum requirement |
Joint stock company
A Joint Stock and public limited company refer to a company whose shares are traded on a stock market. The company generates working capital through the Initial Public Offering (IPO) against a certain sum of money pledged to a commercial bank. While the bank receives its due, the surplus is utilized by the company.
In Lithuania, a JSC can be created with almost €40,000 of which 25% has to be paid up to the bank. The entire pledged amount is broken into shares which are then listed on a stock exchange. The members of the JSC have limited liability to the extent of their investment whereas the shareholders assume no responsibility.
Companies looking to set up IPO may encounter an initial cost of around €2,000 in lieu of registration, office address, documentation, notary services, etc.
Limited Liability Company (LLC/Pvt.Ltd)
Depending on where the company is registered, an LLC, Pvt. Ltd. or GmbH are names assigned to the same business structures in most cases. These structures may differ minutely from one another in terms of operations and management structure; however, the basic principle remains the same, i.e., the owners do not assume any liability in a personal capacity, only the company as a legal person is liable to the extent of its assets and capital.
In Lithuania an LLC requires a minimum share capital of €2,500; the capital is divided into shares that are owned by the owners in accordance with their investment. The state fee for registering LLC is around €60, notarization and translation of documents may cost an additional €200 approximately.
The process of registration may take up to 5 business days from the day of submission of documents. The estimated state fees involved in the entire registration process may vary between €300 – €600, including bank account fees, and local govt. fees etc.
General & Limited Partnerships
Probably the simplest business structure to initiate is a partnership. Two or more like-minded persons come together to promote common commercial interests, this interaction when given a legal cover is called partnership.
The difference between a general and limited partnership is that in the latter there may be one or more limited partners who are only liable to the extent of their share in the company – unlike general partners who are responsible to the full extent of the loss/debt/bankruptcy, etc.
There is no minimum requirement for paid-up capital to register a partnership business, however, a bank account in a commercial bank is compulsory. The foundation agreement between the partners must be notarized, verified, and legalized by a court and later submitted to the company’s register of Lithuania – the process may involve state fee, notarization & translation cost, court fee, and other sundry expenses.
Incorporation procedure
The first step to establishing any type of company is to open a temporary bank account by depositing the minimum share capital (refer to the table above for the minimum required capital). Secondly, an article of association is drawn up, notarized, verified, and accordingly, a management body is appointed. Additionally, acquiring a virtual or physical address of the company, and assigning and registering trade name, designation, and roles of personnel, are steps that run parallel to the process.
Lastly, the AoA along with other legal documents are submitted to the “Register of Legal Entities” for registration. All documents must be in Lithuanian language, if not, they may be translated by a certified translator and attached along with the originals. Each page may cost around €25 to translate, costing nearly €300 in total.
The list of required documents is as under:
- Details of owners/members/partners (names, addresses, ID numbers, passport numbers, bank details, etc.)
- Legal address of the company
- Bank details
- Articles of Association
- Bank certificate verifying deposit of minimum paid-up capital.
Working hours and minimum wages
Most likely businesses will hire locals to run their operations. Fortunately, Lithuanians are found to be very hard working and eager to put in lengthy work hours including overtime. Workers seldom require micro monitoring and generally prove to be loyal to their work.
A work week in Lithuania consists of five days and 40 hours officially, though a person is free to work more than that, but not more than 48 hours a week except for special circumstances. Overtime for an employee cannot exceed 8 hours during 7 consecutive working days. The overtime compensation during regular hours is 150% of the normal wage, 200% if worked between 10pm and 6am and 250% if overtimed on a weekend or public holiday.
The minimum wage in Lithuania is set at €380/month or €2.5 – €2.7/ hour.
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