How to start a business in Lithuania – company formation, trading with Russia and Ukraine & tax advantages

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

Requirements for company formation in Latvia

  • Minimum share capital to be deposited: €2,896, to be fully paid up.
  • No requirements for board or supervisory council.
  • Maximum number of shareholders is 250.

What are the main types of company in Lithuania?

There are four main kinds of business entity for foreign investors, and they are as follows:

  • Public limited company (AB)
  • Private limited company (UAB)
  • Branch
  • Representative office

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 a Lithuanian bank account
  • Confirmation of share registration with the Securities Commission
  • Company and auditor’s report

What documents are required to register a private limited company?

  • Incorporation agreement or act of incorporation
  • The company’s articles of association
  • Minutes of the founding meeting
  • Confirmation of a Lithuanian bank account

What are the main features of a branch or representative office?

  • The foreign parent company is responsible for all liabilities
  • A branch office can conduct trade within a scope set by parent company
  • A representative office can promote and advertise but cannot trade
  • At least one manager must reside in Lithuania
  • No formal auditing requirements

How easy is it to recruit staff in Lithuania?

Lithuania used to be known as Soviet Silicon Valley due to 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. Recruitment is straightforward – contact us if you require local help with this.

What is the regulatory environment like?

  • The government is committed to a free-market economy with a liberal business environment
  • A member of the WTO with 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

Are there financial incentives available?

Investment incentives in Lithuania are centered 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

What about banking facilities?

Lithuanian banks offer the standard range of facilities, including foreign exchange and international payments. There are no foreign exchange restrictions. You will need a local bank account if you open a company in Lithuania which we can help you with.

For more information about company incorporation in Lithuania or opening a bank account, along with any other issues including tax advantages in the free economic zones and trading with Russia and Ukraine, please contact us on 0033 (0)1 53 57 49 10 or email us from our contact page and we’ll be happy to help.