What to Know about Lithuania

Basic information

Brief  History

In the 1230s, Lithuanian lands were united by Mindaugas, founding the Kingdom of Lithuania on 6 July 1253. In the 14^th century it was called the Grand Duchy of Lithuania, being the largest country in Europe. On these days Lithuania, Belarus, Ukraine and parts of Poland and Russia were also lands of the Grand Duchy. In 1569, the Kingdom of Poland and the Grand Duchy of Lithuania concluded the Union of Lublin, establishing the Polish-Lithuanian Commonwealth. The Commonwealth was a political union with a common elected monarch and parliament, while Poland and Lithuania retained certain separate institutions, including legal systems, armies and treasuries. The union continued until the final partition of the Commonwealth in 1795. In World War II Lithuania was occupied first by the Soviet Union and then by Nazi Germany. In 1944, when Germans were retreating, the Soviet Union reoccupied Lithuania. On 11 of March 1990, Lithuania passed the Act of the Re-Establishment of the State of Lithuania, becoming the first Soviet republic to proclaim its independents.

Geography

Lithuania is in the Baltic region of Europe and covers an area of 65,200 km^2. It has around 99 kilometres of sandy coastline, only about 38 kilometres of which face the open Baltic Sea. The rest of the coast is sheltered by the Curonian sand peninsula. Lithuanias major warm-water port Klaipėda lies at the narrow mouth of the Curonian Lagoon (Kuršių marios). The main and the largest river in Lithuania is called Nemunas River and some of its tributaries carry international shipping.

Lithuania lies at the edge of the North European Plain. Its landscape was smoothed by the glaciers of the last ice age. It is a combination of moderate lowlands and highlands. Its highest point is  Aukštojas Hill at 294 metres.  The terrain features numerous lakes and wetlands, also a mixed forest zone that covers over 33% of the country. Drūkšiai is the largest, Tauragnas is the deepest and Asveja is the longest lake in Lithuania.

Climate

Lithuania has a temperate climate with both maritime and continental influences. It is defined as humid continental. Average temperatures on the coast are −2.5 °C in January and 16 °C in July. In Vilnius the average temperatures are −6 °C in January and 17 °C in July. The average annual precipitation is 800 mm on the coast, 900 mm in the Samogitia highlands and 600 mm in the eastern part of the country. Snow occurs every year, it can snow from October to April. In some years sleet can fall in September or May.

Administration

The current system of administrative division was established in 1994 and modified in 2000 to meet the requirements of the European Union. The country’s 10 counties are subdivided into 60 municipalities. Lithuania is divided into 10 counties and 60 municipalities. By geographical area, the three largest counties are Vilnius, Šiauliai and Panevėžys. Vilnius County is also the country’s most populous administrative region. Utena County and Telšiai County should not be identified as the second and third largest counties.

Government System

Lithuania restored its independence on 11 March 1990, following the first multiparty elections to the Supreme Council of the Lithuanian SSR in February and March 1990. The first parliamentary elections under the Constitution adopted in October 1992 were held later that year. Lithuania operates as a democratic parliamentary republic with a directly elected President and a unicameral parliament, the Seimas. Lithuania was one of the first countries in the world to grant women a right to vote in the elections. Lithuania exhibits a fragmented multi-party system with several small parties in which coalition governments are common. Ordinary elections take place every four years. A president is a head of state of the country that is elected every 5 years.

Economy

Lithuania has open and mixed economy that is classified as high-income economy by the World Bank. According to data from 2016, the three largest sectors in Lithuanian economy are – services, industry and agriculture. World Economic Forum’s Global Competitiveness Report ranks Lithuania 41st (of 137 ranked countries). On 1 January 2015, euro became the national currency replacing litas.

On average more than 95% of foreign investments in Lithuania comes from European countries. Lithuania was third country by the average job value of investment projects.

Lithuania applies a combination of progressive Personal Income Tax rates and differentiated Corporate Income Tax rates. From 1 January 2026, the standard Corporate Income Tax rate is 17%, while qualifying small companies with annual revenue not exceeding EUR 300,000 may apply a reduced rate of 7%, subject to statutory conditions. Eligible newly established companies may benefit from a 0% Corporate Income Tax rate during their first two tax periods. Personal Income Tax on employment income and other income subject to the general progressive regime is charged at rates of 20%, 25% and 32%, depending on annual taxable income. Certain categories of income, including dividends, are subject to separate taxation rules.

Popular services

• Company Registration
• Purchase of a Ready-made Company
• Opening a Company in Lithuania by a Power of Attorney
• Subsidiary/Branch Registration in Lithuania

Cases

• Setting up a UAB in Lithuania under the client's brand name without a personal visit
• Buying a ready-made company in Lithuania over three years old to take part in a tender
• Support with opening a business and obtaining a residence permit in Lithuania for an entrepreneur from India

Benefits of doing Business in Lithuania

Lithuania is a convenient and inexpensive jurisdiction to register a company in and do business with good development prospects. As they have strong emphasis of creating new jobs, they are happy to support businesses who are planning to invest in Lithuania and to grow using local specialists. Lithuanian companies are popular as having low costs of accounting and administration, low taxes and great geographical position.

A few few facts about that:

• Lithuania is a member of EU, NATO and part of Eurozone
• Lithuania has double taxation agreement with 57 countries
• A country with relatively inexpensive labour, low price level and no exchange controls

• Lithuania is one of the leaders in world’s freest economies on the ease of starting a business, as well as one of the leaders in Europe according to the index of investment attractiveness.
• Legitimate ways to reduce tax payments
• Lithuania offers a structured tax system with a standard Corporate Income Tax rate of 17%, a reduced rate of 7% for qualifying small companies, and a 0% rate for eligible newly established businesses during their first two tax periods. Personal Income Tax generally follows a progressive system, with separate tax treatment for certain income categories. Businesses may also benefit from qualifying investment, research and development, and Free Economic Zone tax incentives, subject to statutory requirements.

Lithuania, officially the Republic of Lithuania, is a country located in northern Europe, on the southeastern coast of the Baltic Sea. It covers an area of ​​65,300 km².

Lithuania is one of the Baltic states. The country borders upon Latvia (the land borderline is 588 km long, the sea borderline is 22 km long), Belarus (the borderline is 677 km long), Poland (the borderline is 104 km long), Russia (along the Kaliningrad Region, the land borderline is 255 km long; along the Curonian Lagoon, the borderline is 18 km long, the sea borderline is 22 km long). The length of the Baltic Sea coast is 90.66 km.

After declaring its independence in 1918, the country was named “Lithuania”. On September 22, 1921, Lithuania was admitted to the League of Nations. On July 30, 1940, a delegation of confidants headed by Justas Paleckis set off to Moscow by train in order to submit an application for Lithuania’s membership in the Soviet Union on August 3 at the meeting of the Supreme Soviet of the Soviet Union. The Supreme Soviet satisfied the Lithuania’s application. Lithuania became part of the Soviet Union. Lithuania formally restored its independence on 11 March 1990, when the Supreme Council adopted the Act of the Re-Establishment of the State of Lithuania. Lithuania’s independence was internationally recognised during 1991, before the formal dissolution of the Soviet Union in December 1991. Lithuania joined the United Nations on 17 September 1991.

On September 17, 1991, Lithuania was admitted to the UN. On October 7, 1991, Lithuania joined UNESCO. Since May 1, 2004, Lithuania has been a member of the European Union that is part of the Schengen Area, which allows free travel between member countries. On March 29, 2004, Lithuania joined NATO.

BACKGROUND INFORMATION

As of June 1, 2022, the population of Lithuania was 2,797,950. Since the beginning of the year, the population change has been -8,053, or -0.29% (compared to January 1, 2022 when the population was 2,806,200).

The official language of Lithuania is Lithuanian; English and Russian are also widely spoken. The ethnic groups represented in the country are as follows: 84.6% are Lithuanians, 6.5% are Poles, 5% are Russians, 1% are Belarusians, and 2.9% have another ethnicity.

There are 103 cities in Lithuania. The largest Lithuanian cities include (as of 2021) Vilnius (556,100), Kaunas (292,512), Klaipėda (148,348), Šiauliai (100,970) and Panevėžys (83,770). The territory of Lithuania is divided into 10 counties, which consist of 60 municipalities. Lithuanian counties: Alytus, Kaunas, Klaipėda, Marijampolė, Panevėžys, Šiauliai, Tauragė, Telšiai, Utena and Vilnius.

Beauty of nature

Abundant shades of green, the freshest and purest water and enchanting landscapes are the gifts of Lithuanian nature to its inhabitants and guests that seem inexhaustible. Enjoy them, but remember to protect and cherish the greatest assets of Lithuania. Forests cover 1/3 of the country’s area. There are about 3,000 natural lakes in Lithuania, covering 880 km².

Lithuania is famous for its landscapes, plains, abundant forests, lakes and swamps. The Baltic Sea coast with its sandy beaches where you can find amber and the Curonian Spit with breathtaking views and dunes are also popular among tourists. The main resorts of Lithuania are the cities of Palanga, Neringa, Druskininkai and Birštonas rich in nature and various areas for recreation.

Nature

Nature is considered a great asset of the country, and it is cherished. Therefore, many national parks and landscape reserves have been created in Lithuania, which are a must-see. Currently, there are 5 national parks in Lithuania: Trakai Historical National Park, Aukštaitija National Park, Dzūkija National Park, Žemaitija National Park and Curonian Spit National Park.

All national parks occupy 1523 km², which is more than two percent of the territory of Lithuania. The oldest one, Aukštaiti National Park, was created in 1974 and includes as many as 104 lakes surrounded by pine forests. An interesting fact is that there are about 850 hills in Lithuania.

Most of the lakes are located on the Baltic and Samogitian Uplands, in the lowlands of Dainava and the rivers of Zheimena and Neris. The northern part of the arc of the Baltic Upland, the Aukštaičiai Upland, is particularly rich in lakes. Lakes Molėtai, Dubingių and Zarasaitis can be found here. The largest (Drūkšiai, Dysnai), deepest (Tauragnas, Malkėstaitis) and longest (Asveja, Sartai) lakes of the country are located on the Aukštaičiai Upland.

STATE SYSTEM OF LITHUANIA

Lithuania is a multi-party parliamentary democratic republic. The fundamental law of the country is the Constitution adopted by referendum in 1992. The Constitution establishes the rights and obligations of citizens of the country and determines the concept of separation of powers on the basis of which the power is exercised by the Seimas, the President, the Government and the Court.

The highest body of legislative power is the Sejm (unicameral parliament) consisting of 141 deputies elected for 4 years by universal, direct, secret suffrage. Legislative power is held by the unicameral Lithuanian Parliament (Seimas). 141 members of the Seimas are elected for four years either directly (half of them, or 71 members) or on a party list basis (the remaining 70 members) (proportional election system). Only those on the party list who win more than 5% get seats in the Seimas.

In the Republic of Lithuania, the supreme body of executive power is the Government headed by the Prime Minister and ministers heading 14 ministries.

The head of state of Lithuania is the President of the Republic elected directly by citizens for 5 years. The same person may be elected to the office of the President no more than twice in a row. One of the main functions of the President is the formation of foreign policy. The President appoints ministers, the Prime Minister and judges and is the Commander-in-Chief of the Armed Forces.

The Lithuanian judicial system is made up of the Supreme Court, the Court of Appeal, regional and district courts. According to the Constitution, courts of special jurisdiction may be established for considering administrative, labor, family and other cases.

ECONOMY

Lithuania has a developed, high-income economy based on private enterprise, market competition and integration into the European Union’s Single Market. Its principal economic sectors include services, manufacturing, trade, transport and logistics, information technology, and financial services. Lithuania is a member of the EU, the euro area and the OECD. The country’s economic performance should be assessed using current GDP, productivity, investment and employment indicators rather than an unsupported historical ranking of EU economies.

As per the World Competitiveness Index 2022, Lithuania moved up one position and was ranked 29^th among 63 countries (while in the previous year it was ranked 30^th).

In 2022, the minimum wage has changed. In 2022, the minimum wage is 730 euros. The minimum hourly wage is 4.47 euros. In 2022, the minimum net wage is 518 euros.

FOREIGN POLICY

Lithuania has been a member of the WTO since May 31, 2001. Today’s Lithuania is integrating into Western military and economic unions.

Since May 1, 2004, Lithuania has been a member of the European Union that is part of the Schengen Area, which allows free travel between member countries. On March 29, 2004, the NATO Parliamentary Assembly was held. Lithuania became a full member of NATO.

In 2015, Lithuania joined the euro area, it is also a member of the Council of Europe and the OECD. Lithuania has a developed economy with a high level of income, the country has achieved a high standard of living, the level of Lithuanian civil liberties, freedom of the media, freedom of the Internet and democracy are highly valued.

BUSINESS ENVIRONMENT

Rapidly adapting to global changes, Lithuania offers an excellent base for the development of innovations in the areas of financial technologies, life sciences, software, etc. Successful entrepreneurs come to Lithuania from all over the world to jointly develop future solutions, and Lithuanian startups cooperate with NASA and SpaceX.

Lithuania has developed into an established European financial technology hub, particularly in the electronic money, payment services and digital financial infrastructure sectors. The Bank of Lithuania supervises licensed financial institutions, including Electronic Money Institutions (EMIs), Payment Institutions (PIs) and authorised Crypto-Asset Service Providers (CASPs). Lithuania’s fintech ecosystem benefits from EU market access, an established regulatory framework and payment infrastructure such as CENTROlink. However, financial services businesses must meet the applicable licensing, capital, governance, AML/CTF and operational requirements before commencing regulated activities.

Lithuania ranked 11th in the World Bank’s Doing Business 2020 report. However, the World Bank discontinued the Doing Business report in 2021, and this historical ranking should not be presented as a current assessment. Lithuania continues to provide electronic company registration services through the Centre of Registers, allowing eligible businesses to incorporate remotely using accepted qualified electronic signatures. Registration may be completed within several business days once all statutory requirements are satisfied. Additional procedures, including corporate bank account opening, beneficial ownership reporting and sector-specific licensing, may require more time.

Companies operating in the country also succeed due to the inspiration and perseverance of the Lithuanian people. Just look at the list of local companies that have become world leaders in their industries: Vinted, Trafi, Tesonet, Bored Panda, CityBee, Brolis Semiconductors, TransferGo and Paysera. And the fact that well-known brands, such as Danske Bank, Nasdaq, Continental, Hollister, Hella, McKesson and Thermo Fisher Scientific, operate in Lithuania speaks well for the stability, safety and sustainability of business development in the country.

CULTURE

Various events, concerts and exhibitions are often held in Lithuania. Thus, there is plenty of entertainment for its residents. Lithuanian hobbies, everyday habits, customs, traditions, culture, holidays, religion, etc. can provide insights into the lifestyle of Lithuanians.

There is also lots to see in the largest cities of Lithuania, namely Vilnius, Kaunas and Klaipėda. The cities are famous for their old towns, bike paths, a large number of churches and museums. The Old Town of Vilnius is inscribed on the UNESCO World Heritage List and is considered one of the largest surviving medieval old towns in Eastern Europe.

In 1793, the Faculty of Architecture was established at Vilnius University. At that time, professional art appeared in Lithuania. The Faculty of Architecture was headed by the classical painter Laurynas Stuoka-Gucevičius. Pranas Smuglevičius headed the Faculty of Drawing and Painting established in 1797. Thanks to Smuglevičius, the Vilnius school of art became the main artistic center of Lithuania and Poland.

Company in Lithuania UAB provides professional assistance with company incorporation, accounting, corporate administration and regulatory licensing in Lithuania. We also support businesses seeking authorisation as Crypto-Asset Service Providers (CASPs) under Regulation (EU) 2023/1114 (MiCA). Since 1 January 2026, Lithuania’s former national VASP registration regime no longer provides authorisation to offer regulated crypto-asset services. Businesses intending to provide services within the scope of MiCA must generally obtain the required authorisation from the Bank of Lithuania or qualify for an applicable exemption.

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