How to start a business in Lithuania from the UK

If you’re thinking of starting a business in Lithuania, you’re not the only one. It’s fast becoming one of the most innovative startup hubs in the Baltic European region, especially for fintechs.

With a skilled, multilingual workforce, low taxes, ease of doing business and access to both European and Scandinavian markets - it’s easy to see why Lithuania is attractive to foreign entrepreneurs and investors.

But how easy is it to start a business there? Read on for everything you need to know about Lithuania company formation, from legal entity types to registration fees. We’ll cover it all in our handy guide below.

We’ll also show you a smart way to manage your company’s finances in Lithuania and worldwide, using Wise Business - the ideal solution for international businesses.

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Doing business in Lithuania

Lithuania is increasingly becoming one of the most popular places in the Baltic European region to start a business. It’s a fast-growing tech fintech hub, known for a highly skilled, multilingual talent pool.

Looking for business opportunities in Lithuania? It could be worth looking into sectors which contribute the most to the country’s economy, or which are growing fastest. These include:¹

• ICT services, including financial technology
• Petroleum refining
• Food processing
• Energy supplies
• Chemicals
• Biotechnology
• Furniture
• Wood products
• Textiles and clothing industries

As for the business etiquette in Lithuania, it tends to be fairly formal and face-to-face meetings are preferred. English is widely spoken, which is helpful for UK entrepreneurs. Lithuanians also prioritise a healthy work-life balance, with plenty of public holidays, paid leave and time off.

Lithuania company formation

To start a new company in Lithuania, you’ll need to submit your documents to the Register of Legal Entities. This is managed by the State Enterprise Centre of Registers, or _Registrų centras. _You can even do this from overseas, especially if you use a consultancy or other third party to set up the company for you.

But before you can do this, you’ll need to choose a legal structure for your new business. The following are the most common types of business entity in Lithuania:

• Individual enterprise
• Limited Liability Company
• General partnership
• Limited partnership
• Small partnership
• Branch office
• Representative office

We’ll run through each in a little more detail next.

Individual enterprise²

An individual enterprise (IĮ) in Lithuania has just one owner, who is personally liable for the obligations of the business. No minimum share capital is required to start the company.

Limited Liability Company²

Also known as an AB or UAB, a Limited Liability Company is one of the most popular business structures in Lithuania. It’s a separate legal entity from its owner, which means that owners are not personally liable for debts and obligations if the company is wound up.

There are two types of Limited Liability Company - a public liability company (AB) and a private limited company (UAB). The former is designed for medium and large enterprises, as it requires minimum capital of €40,000 EUR. Private limited companies differ in that their shares are not listed for trading on the stock market.

General partnership²

A general partnership or TUB is a company jointly shared by at least two partners. The company is a separate legal entity from the owners, and are taxed the same as companies. But partners can be personally liable for the debts and obligations incurred by the company.

Limited partnership²

A limited partnership or KUB in Lithuania is similar to both a general partnership and a Limited Liability Company. It has both general and limited partners, the former with management responsibilities and unlimited liability for the company’s obligations. Limited partners are only liable up to the extent of their investment.

Small partnership²

A small partnership or MB is designed for smaller business owners wanting to work together, and can be founded by 1-10 members. Partners only have limited liability, and there are no minimum share capital requirements.

Branch office²

A branch office is an entity set up in Lithuania for a foreign parent company based in another country. It is usually run by a manager living in Lithuania. The parent company is responsible for all the obligations and liabilities of the branch office.

Representative office²

Similar to a branch office, a representative office is set up to explore business opportunities in a country. It’s usually set up before a foreign company officially expands their operations to Lithuania, to test the market and promote the parent company. This entity type is not permitted to conduct any business or trade activities.

How to start a company in Lithuania - Step-by-step

Here’s a run-through of the initial steps required to start a company in Lithuania:²

1. Choose a legal structure for your new business
2. Reserve your company name with the Lithuania Register of Legal Entities
3. Prepare your supporting documents for registration - you’ll need Articles of Incorporation, a Business Plan, Company Constitution and personal details, addresses and valid ID for all directors and key shareholders. Some documents will need to be translated into Lithuanian.
4. Use a registered notary to have your founding documents notarised
5. File for registration with the Register of Legal Entities, and pay the registration fee
6. Open a Lithuanian bank account
7. Check if you need a licence or permit for your business activities.
8. Consult accountancy and tax specialists for Lithuania to make sure your records will be compliant with the country’s laws.

Doing business in Lithuania - FAQs

New to Lithuania or starting your very first business? You’re bound to have questions. We’ll tackle some of the most commonly asked questions below, covering everything from fees and costs to business tax.

Is Lithuania a business friendly country?

Lithuania is known to be a business-friendly country, with low taxes and a quick, easy setup process for new companies.

The country is also welcoming to foreign investors and entrepreneurs, with many international companies having a presence there.

Is it easy to start a business in Lithuania?

Yes, it’s pretty quick and easy to start a business in Lithuania. There is some paperwork involved, but registering a new company is a similar process to other countries. The fees are also quite low, and it only takes around 3 working days for your application to be processed.²

How much does it cost to set up a company in Lithuania?

The company registration cost in Lithuania is just €57 EUR. You may also have to pay other fees, such as between €70 and €290 EUR for the services of a registered notary.²

Check below the current conversion rate between GBP and EUR.

Wise Business account is a handy tool for UK business expanding abroad. Once you set up your business in Lithuania you can easily convert British Pounds to Euros to hold money on the currency, receive EUR with your account details or set payments like a local. All conversion is done based on the mid-market exchange rate with low and transparent fees.

Get started with Wise Business 🚀

Can a British citizen start a business in Lithuania?

Foreign citizens including UK nationals can start a business in Lithuania. You may need a valid visa and/or work permit if you plan to live in Lithuania, but otherwise you can open your business from outside the country.

If unsure of the process, it’s easiest to use a third party service or consultancy based in Lithuania to file the paperwork for you.

What is the biggest industry in Lithuania?

The wholesale and retail trade, transport, accommodation and food services sectors contribute the most (nearly 30%) to the economy of Lithuania.³

How do I get a business licence in Lithuania?

Like in other countries, licences and permits are required for some business activities in Lithuania. For example, for providing financial services, insurance and brokerage activities and trading in petroleum products.⁴

There’s no single organisation which issues all licences in Lithuania. So you’ll need to find the authorising body that regulates the business activities you plan to engage in, and apply to them for your licence or permit.

How much is income tax for business in Lithuania?

Corporate income tax in Lithuania is set at a rate of 15%.²

Manage your international company's finances with Wise Business

A Lithuanian bank account will certainly be useful for your new business. But it’s also worth considering alternatives which could save you time and money when managing your finances internationally.

Open a Wise Business account and you can manage your company’s finances in 40+ currencies all in one place, including EUR, GBP and USD. You’ll be able to pay suppliers and staff in their own currency, as well as receiving payments in multiple currencies.

You can even automate payments using the powerful Wise API to save even more time. See how it works here in our case study.

Wise payments are fast and fully secure (even for large amounts). Best of all, you’ll only pay low, transparent fees and always get the mid-market exchange rate.

This is the rate that banks use to buy and sell currency, and is widely considered the fairest rate you can get. When banks carry out currency conversions on behalf of customers, they usually add a mark-up or margin to the exchange rate. This makes it more expensive for your business, as less of your money reaches your recipient.

It’s quick and easy to open a Wise Business account, with a fully digital application, verification and on-boarding process. Check out the requirements here.

Get started with Wise Business 🚀

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And that’s it - our helpful guide on how to register a company in Lithuania, covering the process from start to finish. You should now have all the info you need to get started on setting up your exciting new business venture. Good luck!

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Sources used for this article:

1. Funderbeam - An Overview of the Lithuanian Economy
2. Tetra Consultants - Lithuania Company Registration
3. European Union - Lithuania EU Member Country Profile
4. Tet.lt - Obtaining a Licence in Lithuania

Sources checked on 08-05-2024.