Jurisdictions - Lithuania

LITHUANIA

Lithuania

Over the last few years, Lithuania has become one of the most attractive states for foreign investors, being the largest country within the Baltic States and a part of the Schengen area and Euro Zone. The country provides an ideal environment for the expansion of shared service and Business Process Outsourcing projects due to its competitive business operating and labor costs, highly educated workforce, and its strategic location at the crossroads of 3 markets: Western Europe, the CIS, and the Nordic region. In addition to that, Lithuania also has a well-developed transport infrastructure, which includes:

  • 4 international airports;
  • Ice-free seaport;
  • 2 trans-European network corridors;
  • Around 600 000 m2 of logistics and warehousing facilities;

Furthermore, Lithuania has a contemporary banking and financial system with more than 90% of financial operations being conducted via e-banking.

Most popular legal entities in Lithuania:

  • Uždaroji Akcinė Bendrovė (UAB) - Limited Liability Company;
  • Akcinė Bendrovė (AB) – Joint-Stock Company;
  • Tikroji Ūkinė Bendrija (TŪB) – General Partnership;
  • Komanditinė Ūkinė Bendrija (KŪB) – Limited Partnership;
  • Branches and Representative Offices of foreign companies;
  • Sole Proprietorships incorporated by natural persons;

In accordance with the Lithuanian Law, legal entities acquire their legal status from the date they are registered with the Lithuanian Register of Legal Entities. After the registration process is completed, full disclosure of essential information becomes public and available for anyone.

The Register accepts only original documents in Lithuanian or originals accompanied by translation from any other language. Some documents filed to the Register require notarial certification, i.e. Articles of Association, Deed of Incorporation, or Founding Agreement concluded between shareholders. Nevertheless, the whole process of incorporation can be handled remotely.

What services do we offer?

  • Company formation in Lithuania – any type of entity and structure;
  • Lithuanian ready-made companies – newly established with a clean history;
  • VAT number registration in Lithuania for Limited Liability Companies and Branches;
  • Registered Office and mail processing services for your company;
  • Accounting services for Lithuanian companies and Branches of foreign companies;
  • Assistance with opening of business bank accounts;
  • Assistance with application for acquiring temporary residence permit in Lithuania;

For more information on prices, please follow the link.

Basic information about Lithuanian legal entities

UAB:

  • More suitable for small and medium-sized business;
  • Company name: it must meet the norms of standard Lithuanian language;
  • Shareholders allowed: natural persons and/or legal entities, residents and/or non-residents;
  • Maximum number of shareholders: 250;
  • The minimum share capital: EUR 2500;
  • Time scales for registration: within 5 working days;

AB:

  • More suitable for large business;
  • Company name: it must meet the norms of standard Lithuanian language;
  • Shareholders allowed: natural persons and/or legal entities, residents and/or non-residents;
  • Shares can be publicly traded on a stock exchange, so the rules regulating trading in securities apply;
  • The minimum share capital: EUR 40 000;
  • Time scales for registration: within 5 working days;

Partnership:

Generally, Partnerships are entities of unlimited liability, which are founded on the basis of a partnership agreement, which may be concluded between several natural persons or legal entities, combining their property under the partnership agreement in order to carry out joint business activities on behalf of the same company name.

There are 2 types of Partnerships in Lithuania: TŪB and KŪB, which are described below.

TŪB:

  • General Partnership;
  • Partners are jointly or separately liable for its obligations and debts;
  • Minimum number of partners allowed: 2;
  • Maximum number of partners allowed: 20;
  • Partners: residents and/or non-residents allowed;

KŪB:

  • Limited Partnership;
  • Minimum number of partners allowed: 3, meaning at least 2 general partners and 1 limited partner;
  • Maximum number of partners allowed: 20;
  • General partners are jointly or separately liable for its obligations and debts;
  • Limited partner has limited liability (limited to the amount of his/her contribution);
  • Partners: residents and/or non-residents allowed;

Branch and Representative Office in Lithuania:

Branches and Representative Offices do not have the status of a legal entity. However, a Branch is entitled to carry out commercial activities in Lithuania on behalf of its parent company. Therefore, a Branch is a subject to the same treatment and taxes as a local Lithuanian company. Moreover, a parent company is liable for its Branch and the Branch is liable for the obligations of its parent.

Representative Office is entitled to represent its parent company by carrying out non-income generating activities in Lithuania, i.e. developing business opportunities and concluding agreements on its parent’s behalf. It is not allowed to act as an independent subsidiary and to perform commercial activities itself, therefore it is not a subject to taxes and accounting requirements.

Taxes in Lithuania:

Corporate Income Tax – 15%;
Personal Income Tax – 15%;

Withholding taxes:

  • Dividends – 0%*, 15%;
  • Interest – 0%**, 10%;
  • Royalties – 0%***, 10%;

*The rate applies if dividends are paid to a legal entity holding not less than 10%, except offshore companies.
**The rate applies if interest is paid to an EEA or Double Tax Treaty legal entity.
***The rate applies if royalties are paid to associated EU companies.

Value Added Tax:

  • The standard VAT rate – 21%;
  • Reduced rates – 9%*, 5%**;

*The rate applies to the following: certain periodicals and non-periodicals, (e.g. books, magazines, newspapers), regular passenger transportation, heating energy and hot water for residential premises, certain accommodation services.
**The rate applies to the following: compensable pharmaceuticals and medical devices, technical devices for disabled and their repair.

Social Security:

  • Employer’s rate – 30,98%;
  • Employee’s rate – 9%*;

*The rate is withheld by the employer and consists of 3% social insurance and 6% health insurance.

Minimum salary: 325 EUR.

Contact Us

UNITED AGENTS ​

Tel: +371 26133646
Tel: +371 28223563
Email: info@unitedagents.eu
Address: 76/78 Matīsa St. Rīga, LV-1009, Latvia

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