Lithuania Company Formation

Lithuania, a Baltic nation with a strategic location and a business-friendly environment, is increasingly attracting international entrepreneurs seeking a reputable and accessible jurisdiction for Lithuania company formation. While not traditionally considered a “prestige offshore jurisdiction” in the same vein as some Caribbean islands, Lithuania offers a compelling alternative with its EU membership, stable economy, and transparent legal framework. This guide provides a comprehensive overview of forming a company in Lithuania, specifically tailored for non-residents.

Lithuania Company Formation: Your Gateway to the EU Market

Lithuania offers a unique blend of advantages that make it an attractive option for businesses looking to expand into the European market:

• EU Membership: Access to the vast EU market with its free movement of goods, services, capital, and people.
• Strategic Location: A gateway between Eastern and Western Europe, facilitating trade and logistics.
• Competitive Tax Rates: Corporate income tax is generally 15%, with potential reductions for small businesses.
• Simplified Business Environment: Streamlined registration processes and a supportive government attitude towards foreign investment.
• Skilled Workforce: A highly educated and multilingual workforce, particularly strong in IT and technology.
• Stable Economy: A resilient and growing economy with a strong focus on innovation and technology.

Types of Companies for Non-Residents in Lithuania:

Non-residents can choose from several company structures in Lithuania, the most common being:

• Uždaroji akcinė bendrovė (UAB) – Private Limited Liability Company: This is the most popular choice for small and medium-sized businesses. It requires a minimum share capital of EUR 2,500 and offers limited liability to its shareholders.
• Akcinė bendrovė (AB) – Public Limited Liability Company: Suitable for larger enterprises seeking to raise capital through public offerings. It requires a higher minimum share capital and more stringent regulatory requirements.
• Individuali įmonė (IĮ) – Individual Enterprise: A simpler structure suitable for sole proprietorships. The owner is personally liable for the company’s debts.
• Mažoji bendrija (MB) – Small Partnership: A simplified form of a limited liability company with fewer administrative requirements.

Advantages for Non-Residents:

• EU Market Access: As mentioned above, this is a significant advantage.
• Relatively Low Setup Costs: Compared to other EU countries, the cost of Lithuania company formation is relatively affordable.
• Simplified Tax System: The Lithuanian tax system is relatively straightforward and easy to understand.
• Access to EU Funding: Lithuanian companies are eligible for various EU funding programs and grants.
• No Residency Requirement for Directors: You don’t need to be a resident of Lithuania to be a director of a Lithuanian company.

Disadvantages for Non-Residents:

• Language Barrier: While many Lithuanians speak English, some official documents and procedures may require translation.
• Cultural Differences: Understanding the local business culture is crucial for successful operations.
• Compliance Requirements: Adhering to Lithuanian laws and regulations is essential, which can be complex for non-residents.
• Bank Account Opening: Opening a corporate bank account can sometimes be challenging for newly formed companies.

What is Required for Company Registration in Lithuania?

The requirements for Lithuania company formation typically include:

• Company Name: A unique company name that is not already registered.
• Registered Address: A physical address in Lithuania where the company is registered.
• Shareholders and Directors: Information about the shareholders and directors of the company.
• Articles of Association: A document outlining the company’s purpose, structure, and rules.
• Share Capital: The minimum share capital required for the chosen company structure.
• Power of Attorney (if applicable): If you are not physically present in Lithuania, you will need to grant power of attorney to a representative to act on your behalf.
• KYC (Know Your Customer) Documentation: Banks and other institutions will require KYC documentation to verify the identity of the company’s beneficial owners.

Procedure for Lithuania Company Formation:

The process of Lithuania company formation generally involves the following steps:

1. Choosing a Company Name: Verify the availability of your desired company name with the Register of Legal Entities.
2. Preparing the Articles of Association: Draft the Articles of Association, outlining the company’s purpose, structure, and rules. This document is crucial and should be carefully prepared.
3. Opening a Temporary Bank Account: Open a temporary bank account to deposit the share capital.
4. Notarization of Documents: Have the Articles of Association and other relevant documents notarized.
5. Registration with the Register of Legal Entities: Submit the required documents to the Register of Legal Entities.
6. Registration with the Tax Authority: Register the company with the Lithuanian Tax Authority to obtain a tax identification number.
7. Opening a Corporate Bank Account: Open a permanent corporate bank account for business operations.
8. Registration with the Social Security Fund (SoDra): Register the company with SoDra if you plan to employ staff.

Timeframe for Company Registration:

The timeframe for Lithuania company formation can vary depending on the complexity of the case and the efficiency of the registration process. Generally, it takes approximately 1-3 weeks to complete the registration process. This includes preparing the necessary documents, notarizing them, and submitting them to the relevant authorities.

How We Can Help You with Our Professionals:

Navigating the complexities of Lithuania company formation can be challenging, especially for non-residents. Our team of experienced professionals can provide comprehensive support throughout the entire process, ensuring a smooth and efficient setup. We offer a range of services, including:

• Company Name Search and Reservation: We can help you find a unique and available company name.
• Drafting of Articles of Association: Our legal experts can draft the Articles of Association tailored to your specific business needs.
• Assistance with Bank Account Opening: We can assist you in opening a corporate bank account with a reputable Lithuanian bank.
• Registration with the Register of Legal Entities: We will handle the entire registration process with the Register of Legal Entities.
• Tax and Legal Advice: We provide expert tax and legal advice to ensure compliance with Lithuanian regulations.
• Registered Office Services: We can provide a registered office address for your company in Lithuania.
• Accounting and Bookkeeping Services: We offer comprehensive accounting and bookkeeping services to help you manage your finances.
• Ongoing Support: We provide ongoing support to help you manage your company and navigate the Lithuanian business environment.

By partnering with us, you can benefit from our expertise and experience, saving you time and resources. We are committed to providing you with the highest quality service and ensuring that your Lithuania company formation is a success. Contact us today to discuss your specific needs and learn how we can help you achieve your business goals in Lithuania. We are your trusted partner for Lithuania company formation.