Being a bridge to European civilization for centuries, Lithuania has gained many virtues of the advanced world. The country is one of the most favorable places for establishing a profitable company in Eastern Europe. Many investors from different parts of the world come here to start a fintech or blockchain firm. Other popular fields are construction and logistics.
Businesses are attracted here by moderate tax rates and integration with the open market of the European bloc. The national economy of this Baltic state is often rated as one of the freest worldwide. Thus, a Lithuanian business setup attracts quick-witted entrepreneurs hungry for fierce competition that gives them a thrill.
As a matter of fact, most foreigners choose exactly UAB to register their enterprises in the Baltic country. That’s a kind of limited liability firm where a non-resident can be either a director or a shareholder.
Your enterprise establishment: legal requirements
The legal framework Lithuania suggests complying with these criteria:
- Director: You can appoint a private person for this position, but his residence can’t be located in any of the sanctioned states.
- Capital: You are not allowed to deposit less than 1,000 euros.
- Shareholder: This might be a corporate or private participant no matter where he or she resides.
- Legal address: Unlike your shareholder’s residence, this must be very definite – within Lithuania.
- Secretary: This position is not obligatory, at least for registration.
If you think that once your company formation Lithuania is over and you may relax, that can’t be true. It’s time to work hard and…report your results. Exactly reporting justifies the very existence of bureaucracy, but at the same time, it deprives your firm of possible problems with the Baltic state where your startup is registered.
Both non-resident and resident businesses are obliged to keep records about their commercial activities and then submit that stuff to the local Center of the Register on an annual basis. If your enterprise is small, you may do with an abbreviated report, while a bigger enterprise requires submitting more detailed financial records.
If your assets are worth more than 1, 800 000 euros, your annual income exceeds 3, 500 000 euros, and you employ at least 50 staff members, then you can’t evade an audit. As follows from this, smaller businesses are quite trouble-free to run in terms of bureaucracy their owners have to deal with.
Starting a firm: a detailed instruction
Your business establishment Lithuania should begin with the creation of an account in a local bank where your minimal capital should be deposited. It’s not a troublesome thing and should take you no more than one day. The bank will grant you a corresponding certificate. Then, you require registering the trading name. By the way, the whole procedure resembles what you could have faced in Italy, or the Netherlands, for example.
Then, the certificate issued by the bank plus the articles of association needs to be notarized and placed in the firm’s register. Secondly, you require visiting the State Social Insurance Fund Board and Lithuanian State Tax Inspectorate to proceed with the paperwork. Finally, open a settlement bank account. Ensure you have a company seal – it’s a must-have thing for daily operations.
To register a firm (UAB) in this Baltic state prepare come up with these documents:
- Foreign and national passports of your shareholder and director (don’t forget that they both should have their addresses confirmed)
- Their emails and phone numbers
Key benefits of starting a firm in this place
Merchants from different parts of the globe consider moving their enterprises or opening new startups from scratch there. It is not surprising since this place is stuffed with benefits:
- It is real to start an enterprise in the Baltic country remotely. You can do this on your own or hire professional intermediaries who can assist you at each stage of the procedure.
- Starting a company here brings tax bonuses. In particular, you can count on the VAT reserve program if you have an EU partner.
- You know offshore states have a questionable reputation. The Baltic country is transparent in this regard that doesn’t raise unnecessary questions. You’ll automatically enjoy a good business reputation on the international market.
- If your business is small, then a corporate rate won’t exceed 5%.
- If you enjoy this Baltic state and have a desire to stay there for a long time, your undertaking will help. Local laws grant foreigners a residence permit. All you need to do is to start a company here. Stay there and travel across the Schengen region with no hassle.
- Here, startups are free of income tax during the first operational year.
The Lithuanian market: bonuses and challenges
Company registration Lithuania can bring you one challenge and no more. All the papers associated with starting and running your business must be in the Lithuanian language. That could be a trouble if you initially hoped that English alone would be enough. It’s not recommended to rely on Google, but instead, you’d better rely on a professional interpreter. After all, you are starting a firm, so it’s worth spending money on it.
Well, the country’s language is the only barrier on your way to making money there. The rest is beneficial and it has been already mentioned above. However, there’s still something else to add to the list of advantages you are already aware of.
To cut a long story short, 2025 is going to become especially lucrative for foreigners who intend to start a firm in this Baltic country. Next year the Lithuanian authorities are going to attract more foreign investors to the local market. The measure is reportedly expected to generate up to 20,000 extra jobs. Potentially, your company might participate in the upcoming strengthening of the local market.