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Company Formation in Lithuania

Many businesses are seeking to expand their field of activities and to enter new markets or to optimize taxes often by expanding in the European Union countries. If you also want to start your business in one of the countries of EU, it would be advisable to think about company registration in Lithuania. There are many reasons for choosing Lithuania as an attractive country for business registration. To start a business in Lithuania, you need to follow some procedures, to know what type of entity you going to be.

• Small Partnership (MB): minimum amount of capital None (MB members define contributions), stakeholders 1 – 10.

• Private limited liability company (UAB): the minimum amount of capital ≥ EUR 2,500, stakeholders 1 – 249.

• Public liability company (AB): the minimum amount of capital ≥ EUR 40,000, stakeholders 1 – unlimited.

• Individual enterprise (IĮ): the minimum amount of capital None, 1 owner.

• Agricultural Company (ŽŪB): the minimum amount of capital None, Stakeholders 2 – unlimited.

Private limited liability companies (UAB) are considered most common among foreign-based enterprises. When you know which entity suits you there are some necessary steps to do:

• Check and reserve the name of the company (limited liability company), should be completed in 1 day and cost approx. EUR 16.

• Preparing founding documents, there is needed a Lithuanian address for the company registration documents (consent is required from the owner of the premises), free cost (Legal costs, if carried out by a legal advisor).

• Opening an accumulative bank account that is only used for depositing share capital. You can open for free on the same day.

• Transferring share capital to the accumulative account.

• Notarising the founding documents at the notary’s office. Takes time 1-3 days and cost around EUR 60 - 290, depending on the amount of share capital.

• Registering the company in the Register of Legal Entities, cost approx. EUR 58.

A Branch Office

If you don't want to open a company and to seek to expand your business and maybe to save money opening a branch office could be a great idea. A branch established in Lithuania has not considered a legal entity and its assets are not separate from the foreign company’s assets. The full liability for its actions is taken by the parent company all the time. Many companies choose this form of business because of the small costs of registration and administration.

A branch must submit a standard application which contains the name of the foreign company and its registered address, the proof of existence in the foreign country, the name of the directors and their details, the decision of opening a branch. A representative must be chosen to control the office daily and connect it with the foreign company. All the powers owned by this representative must be notarized,

The registration of the branch in the Company Registrar is mandatory as it is for every form of business performed in Lithuania. The department must be registered for the corporate taxes and VAT at the State Tax Inspectorate and the social insurance at the State Social Insurance Fund.

Every year a formed branch must report monthly VAT and deposit the annual tax returns. The branches must also collect the financial statements of the parent companies and the reports about the audited accounts.

Virtual assistance or freelancers

If you don‘t want to invest or open a company in Lithuania, you can always save money by employing freelancers or doing smart business with Lithuanian companies. The dynamic business environment of today brings a lot of challenges for entrepreneurs. Especially in small business, it is tough to follow all the deadlines, have updated accounting and other databases, respond to all customer inquiries or simply do the necessary tasks. The challenge can be the lack of time or the lack of resources to hire additional full-time employees or simply the cost of staff in your location. The decision to employ virtual assistance will assure your daily tasks being done by professionals.

Regardless of the general field which a business falls under, specific daily business activities cross nearly every industry line. Take administrative tasks, for example. The skills needed to schedule business-related events, complete data entry, and type long documents are often delegated to a virtual assistant or remote service, cutting time-cost significantly. These tasks are somewhat repetitive, but that doesn’t mean that they aren’t time-consuming and detail-oriented, which is why outsourcing is often cheaper and more efficient than hiring in-house employees to handle them.

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