Company Incorporate in Lithuania: A Comprehensive Guide
Are you a foreign investor considering Lithuania as your next business destinatigmon? The process of company incorporation may seem daunting if you’re unfamiliar with the local regulations. In this comprehensive guide, we will walk you through the key steps and pain points of company incorporate in Lithuania, empowering you to navigate the process with confidence.
Step 1: Selecting a Company Type
These are the types of companies in Lithuania:
Sole Proprietorship (IĮ): This is suitable for individuals who want to operate a business as a sole proprietor. It offers simplicity in terms of legal structure and fewer regulatory requirements. However, it does not provide limited liability protection.
Partnership (TĮ): A partnership is formed by two or more individuals who agree to carry on a business together. It can be a general partnership (TĮ) or a limited partnership (KŪB). Partnerships have different requirements and levels of liability protection.
Limited Liability Company (UAB): A popular choice for foreign investors, UAB offers limited liability protection and flexibility in management structure, making it suitable for small to medium-sized enterprises. It requires at least one shareholder and a minimum share capital of €2,500.
Joint Stock Company (AB): AB is suitable for larger businesses with multiple shareholders, offering greater opportunities for fundraising through public offerings. It requires a minimum share capital of €40,000 and has more stringent reporting and governance requirements.
In most cases, only applications for UAB and AB are approved. Sole Proprietorship and partnership are more fitted for smaller businesses run by locals.
Step 2: Company Name Reservation
Company name reservation in Lithuania is done through an application submitted to the Register of Legal Entities (RLE). The RLE conducts a thorough review to ensure the proposed name is unique and compliant with legal requirements.
The name reservation process typically takes a few working days. Upon successful name reservation, its held for 6 months. You must complete the company registration process to secure the name within this time.
Step 3: Preparing the Documents
Generally, these are the main documents needed for a company incorporate in Lithuania:
- Articles of Association
- Formal Application Form
- Proof of Identity
- Shareholder and Director Details
- Notarized Copies: Notarized copies of relevant documents, such as passports or identification cards
- Certificate of Incorporation (for foreign companies establishing a subsidiary in Lithuania)
- Registered Address Confirmation
Step 4: Submit the Application and Pay Government Fees
The state fee for registering a UAB (private limited liability business) is 574 EUR. However, notary fees, ranging from 102 EUR to 232 EUR, are additional and not included in the state fee.
Registering as a VAT payer does not incur any governmental cost in Lithuania. However, you may need to pay certain fees to your bank for helping you to do so.
Step 5: Opening a Bank Account
Lithuania requires a separate accumulative bank account solely to deposit the share capital during the company incorporation process. Any bank can be used for subsequent business activities. The minimum share capital required is €2,500.
Which Pass Do Foreigners Need to Register and Operate a Company in Lithuania?
EU/EEA citizens can stay in Lithuania for up to 90 days using an ID card or passport. They must register and obtain a residency permit from the Migration Department to stay longer.
Non-EU/EEA citizens have specific visa and permit requirements for starting a business in Lithuania. They can acquire a Schengen visa for a 90-day stay within 180 days. An EU Blue Card is available for highly skilled non-EU nationals, providing a combined work and residence permit for up to three years, with the possibility of renewal and family reunification.
Another option is a 2-year residence permit, which requires the company to be operational for at least six months, have €28,000 in equity, and foreign investors to have invested a minimum of €14,000.
Conclusion
The process of company incorporate in Lithuania can be a rewarding venture, but the company incorporation process can be overwhelming without the right information. Our comprehensive guide equips foreign investors with the knowledge and insights necessary to navigate the registration process smoothly. Contact us to confidently embark on your journey to establish a successful business presence in Lithuania.
