Advantages of Establishing a Company in Lithuania

Advantages of establishing a company in Lithuania

Lithuania is the largest, as well as the most populous, state among the Baltic countries. It is located on the Baltic Sea coast, a member of the Schengen Treaty and a member of the World Trade Organization. In recent years, Lithuania has made significant progress by attracting foreign capital to the economy of the country, mostly at the expense of cheap labour, a stable developing economy, low inflation, etc. Opening a company in Lithuania gives the possibility not only to experience the economic stability of the country, but also to enter the European market without restrictions on the export of goods in the EU.

As more and more promising entrepreneurial projects make their way into Lithuania, local authorities are working to ensure even possibilities for national and international players. That creates an environment which supports new initiatives and encourages collaborative growth – an environment of fast-growing international companies and start-ups that we see in Lithuania today. Attracting investment to Lithuania is one of the most important strategic goals of the State. To implement it, Lithuania constantly improves its image and its attractiveness among investors not only within the country, but also in relations with foreign States or individuals residing in foreign States.

Lower bar on immigration requirements

According to Lithuanian law, investing in a business in Lithuania is a valid reason for foreign nationals to immigrate and reside in the country. This decision was taken to encourage investment in business and has already attracted many foreigners who come to live here on the basis of legal activity. Foreigners have the right to join the management of the already established legal entity in Lithuania (to become shareholders of the enterprise) or to establish a new legal entity.

Simple establishment process

Equal opportunities also translate into new digitization projects and advanced, well-protected platforms that make it possible to submit the necessary paperwork on a remote basis.

Whereas some business owners may still choose to create a business by physically going to a state institution and filing the paperwork in person, there is another, significantly more efficient way to do it. To simplify the procedure and make it more accessible, Lithuania is offering a very convenient and reliable digital registration platform. Establishing a business online is significantly cheaper, takes only 3-4 business days (otherwise it may take up to 8 business days), and requires only an electronic signature for identity verification and legal commitment.

Other advantages

  • Establishing a company in Lithuania grants access to an advantageous tax system.
  • Lithuanian companies have a high reputation on the market as they are not offshore companies. This advantage makes it possible to be a reliable business partner, but also comes with certain tax benefits.
  • All enterprises registered in Lithuania and having accounts with local banks do not have exchange control. This allows free movement of funds.
  • Lithuanian companies have the right to receive a VAT number and to use VAT reverse order when working with partners from the EU.
  • Opening a company in Lithuania gives the right to obtain a Residence Permit, which in turn allows free movement in Schengen countries and unlimited number of days of residence in Lithuania.

Company formation

There are four main legal forms of companies in Lithuania, namely:

  1. Open Limited Company (AB), equivalent to a joint-stock company (JSC);
  2. A Closed Limited Liability Company (UAB), analogous to a Limited Liability Company (LTD);
  3. Full Partnership (TUB) or Limited Partnership (UB);
  4. Branch or representation.

The most common form among local and foreign citizens in Lithuania is the Closed Limited Liability Company (UAB).

Company in Lithuania UAB is a team of competent specialists who will help you open a company and develop a business in Lithuania.