Company Formation in Lithuania
Top 5 Advantages of company registration in Lithuania
- Business-friendly taxation policy
- Appealing tax incentives
- Membership with EU and NATO
- Advanced Information and Communications Technology (ICT)
- Highly educated and multi-lingual workforce
How long does it take to register a company in Lithuania?
- 3-5 days for remote registration provided all requirements are intact and completed
- 5-10 days additional for the opening of a bank account
- If everything is in order, the registration process will not take more than 3 weeks
What are the steps to register a company in Lithuania?
The registration process of a company in Lithuania is very simple. The experts of LegalBison will assist you throughout every step of it:
- Initial consultation and agreement
- Payment of the full invoice
- [IF REMOTELY]: Notarization of POA by client
- Preparation of registration documents
- Document signed at the notary
- Official register validity: immediately
How high are the corporate income tax in Lithuania?
The general Corporate Income Tax (CIT) is 15%
- Companies with 10 or less employees or with and less than EUR 300,000 in gross annual revenue may seek for a lower CIT rate of 5%
- All income derived from local and worldwide activities are taxable
What Double-tax treaties has Lithuania?
Aside from the prevention of tax evasion, Lithuania also wants to give investors legal certainty, hence, it has entered into tax treaties with the following states:
Armenia, Austria, Azerbaijan, Belarus, Belgium, Bulgaria, Canada, China, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Greece, Georgia, Germany, Hungary, Iceland, India, Ireland, Israel, Italy, Kazakhstan, Kyrgyz, Korea, Latvia, Luxembourg, Macedonia, Malta, Mexico, Moldova, Netherlands, Norway, Poland, Portugal, Romania, Russia, Serbia, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, Ukraine, United Arab Emirates, United Kingdom of Great Britain and Northern Ireland, USA, Uzbekistan, Turkey, and Turkmenistan
Status: End of 2020
Without VAT number
- It is unlikely for legal entities not to be VAT registered since almost all economic activities are charged with VAT (important: B2B payments between two VAT exempt companies are not more expensive)
- Your company will not have to file monthly tax returns (prerequisite: no one receives a salary), which means low costs
With VAT number
- Your company will be eligible to receive VAT refunds, which means you can make use of the reverse-charge mechanism
-BULLETRegistration for VAT is before the State Tax Inspectorate and takes more or less 10 days
- Legal entities or companies may voluntarily register for VAT but are already required to do so when their annual economic activity turnover exceeds EUR 45.000
- 19% VAT imposed on goods and services
- 9% or 5% on select goods and services
- VAT relief is also possible
- Tax period is a calendar month and payable every 25th day of the subsequent month
Before we help you to apply for a VAT number (in Lithuania 19%) you should carefully think about the advantages and obligations that go along with it.
- Registration may be done in person or remotely.
- You can either register a new company or buy a ready-made company or buy shares in an existing Lithuanian company.
- The third option, however, is more complicated and requires more resources.
Speak to our consultants to get a free consultation and guidance on how to choose the best jurisdiction based on your business model.
Documents to provide for company registration in Lithuania
- All business entities must register with the unified Register of Legal Persons (The Registrar), administered by the State Enterprise Centre of Registers
- Articles of Association, along with Establishment Act where you will need a Lithuanian business address (required for the company registration documents) and an appointed a general manager
- Application for the reservation of a temporary company name (form JAR-5)
- Proof of deposit of the required share capital (minimum of EUR 2,500)
- Passport copies (a scan) of shareholder/s and director/s, also beneficiary owner if applicable
Information needed to get company registration in Lithuania
- The popular legal entity in Lithuania is a private limited liability company and if you chose to incorporate one, the following are needed:
- 3 alternate options for your desired company name ranked from most desired to least desired
- At least one 1 founder or share holder (Natural or Legal)
- The whole process may be done remotely and if you opted to act with a representative to prepare everything for you, a Power of Attorney must be issued and apostilled or legalized in Lithuania. The POA must include all authorities from the reservation of temporary company name
- Notarization of the founding documents at a registered notary’s office will also be done
- If the documents are issued from or executed in Russia, Ukraine, Belarus, Moldova, Estonia and Latvia, legalization or certification by Apostille is not required
Accounting and auditing
- Lithuania requires that accounting activities shall be done and recorded in EUR denomination and in Lithuanian language and in accordance with International Financial Reporting Standards (IFRS)
- All companies, even those with no financial transactions, are required to file their annual report within six months following the closing of the financial year with the Central Commercial Register which can be done online and which shall include the following:
- Management report, balance sheet, income statement, cash flow statement, statement of changes in equity, notes to the annual accounts
- Auditor's report is required if the company was subjected to audit (otherwise the annual report will do)
Note: Companies or enterprises must maintain more than 2500 EUR equity and ensure that their capital is at least 50% of the registered shared capital. The moment the aforesaid are not met, the owners or shareholders of the company or enterprise are either shall either restore their equity capital or proceed to dissolve the company.
What are the residential requirements in Lithuania?
- No residency requirement is mandated for any foreign investors (natural or legal person) who wish to incorporate in Lithuania
LegalBison offers help with all of the above requirements. We assist and are local on ground. Speak now for free with one of our consultants to get your business started.
FAQs about company registration in Lithuania
- 0% tax
- Perfect to begin with
- Easy process
- Fast incorporation
- 0% tax
- Everything remote
- Very low tax
- Foreigner friendly
- Everything remote
- Lowest tax rate in the EU
- Favorable for business
- Simple and fast
- Very business friendly
- Competitive tax rates
- A growing EU economy