Business Services for Foreign Investors in Lithuania

Why Foreign Investors Choose Lithuania

Lithuania’s appeal to foreign investors is built on a combination of practical factors that distinguish it from most other EU member states — not marketing claims, but specific legal, tax, and operational conditions that experienced investors notice when they compare options.

No foreign ownership restrictions

Lithuania places no restrictions on foreign ownership of Lithuanian companies. A non-EU individual or a company registered in any country can own 100% of a Lithuanian UAB. There is no requirement for Lithuanian co-shareholders, local directors in most sectors, or minimum local investment. This full ownership model gives foreign investors direct control of their Lithuanian entity without the dilution or governance complications that local partnership requirements create in other jurisdictions.

EU market access from a single entity

A Lithuanian UAB is a full EU legal entity. It can operate across the EU single market, sign EU-standard commercial contracts, access SEPA payment infrastructure, apply for EU funding, and passport regulated services under EU directives. For investors based outside the EU — in the UK, UAE, Israel, the US, Singapore, or Georgia — a Lithuanian entity provides genuine EU market access without requiring the investor to establish multiple entities in different member states. Lithuania’s position as a small, accessible EU jurisdiction with a straightforward regulatory environment makes it a practical entry point for non-EU investors building an EU presence.

Competitive tax environment

From 1 January 2026, Lithuania’s standard Corporate Income Tax rate is 17%. Qualifying small companies with annual revenue not exceeding EUR 300,000 may apply a reduced rate of 7%, subject to statutory conditions and related-party restrictions. Eligible newly established companies whose participants are exclusively natural persons may benefit from a 0% rate during their first two tax periods, provided that all applicable requirements are satisfied. The participation exemption may apply to qualifying dividends received by Lithuanian holding companies, subject to the ownership, holding period, taxation and anti-abuse requirements established by Lithuanian legislation. Lithuania has concluded double taxation treaties with more than 55 countries, providing mechanisms to avoid double taxation on income flowing through the Lithuanian entity.

Holding structure possibilities

For international investors building multi-entity EU structures, a Lithuanian holding company can sit between a non-EU parent and EU operating subsidiaries. The holding company receives dividends from operating subsidiaries under the participation exemption, manages intercompany loans, holds intellectual property, and provides an EU-domiciled legal entity for group governance purposes. We design holding structures for foreign investors as part of our legal advisory service, assessing the correct jurisdiction, entity type, and intercompany arrangements for each specific investment scenario.

Ease of registration and operations

A Lithuanian UAB can be registered in 1–3 business days, with a minimum share capital of €1,000 and a state registration fee of €51. Company registration, VAT registration, and most government filings are handled electronically. English is widely spoken in the professional services environment. For foreign investors who want to establish an EU presence efficiently — without the months-long processes common in Germany, France, or the Netherlands — Lithuania offers a balance of credibility and administrative practicality that few other EU jurisdictions match.

Common Investment Structures for Foreign Investors

The structure through which a foreign investor holds a Lithuanian entity has significant legal, tax, and operational implications. The right structure depends on the investor’s home jurisdiction, the number of entities involved, the intended activities of the Lithuanian entity, and the exit horizon. Below are the most common structures we advise on.

Direct ownership — foreign individual as sole shareholder

The simplest structure: the foreign individual registers a Lithuanian UAB in their own name as the sole shareholder. The investor controls the company directly, appoints themselves or a third party as director, and manages the entity as the single decision-maker. Dividends flow directly from the Lithuanian entity to the individual, subject to Lithuanian withholding tax (typically 15%, reduced under applicable double taxation treaties) and personal income tax in the investor’s country of residence. This structure is appropriate for individual investors entering Lithuania with a single operating company and no group structure requirements.

Corporate ownership — foreign company as shareholder

The foreign investor’s existing company owns the Lithuanian UAB. Dividends flow from the Lithuanian entity to the parent company, subject to Lithuanian withholding tax (with potential treaty reduction or participation exemption). The parent company then manages dividend distributions to the individual according to its own jurisdiction’s rules. This structure is common for investors who already operate through a corporate structure in their home country and want to maintain that structure for the Lithuanian entity. Transfer pricing rules apply to any transactions between the Lithuanian UAB and the parent company.

Lithuanian holding company with operating subsidiaries

A Lithuanian holding company (HoldCo) owns one or more operating companies — either Lithuanian or in other EU jurisdictions. The HoldCo receives dividends from the operating subsidiaries, potentially under the participation dividend exemption. This structure is used when the investor plans to build multiple EU operating entities under a common Lithuanian parent, when the investor wants IP held separately from operating risk, or when the Lithuanian HoldCo provides a more tax-efficient intermediate between a non-EU parent and EU operations than a direct ownership structure. This is a more complex structure requiring specialist tax advice across multiple jurisdictions.

Subsidiary of a foreign parent

A foreign company registers a Lithuanian subsidiary — a new Lithuanian UAB that is wholly owned by the parent. The subsidiary operates as the EU-facing entity while the parent continues operating in its home jurisdiction. Intercompany transactions between parent and subsidiary must be at arm’s length under transfer pricing rules. This is the most common structure for non-EU companies entering the EU market through Lithuania — particularly for fintech, SaaS, and e-commerce businesses that want an EU legal entity without establishing their primary operations in a high-cost Western European jurisdiction.

Key Tax Considerations for Foreign Investors

Foreign investors owning Lithuanian entities face a set of tax considerations that do not apply to domestic investors — withholding tax on outbound payments, transfer pricing obligations for related party transactions, and the interaction between Lithuanian tax and the investor’s home country tax rules. Understanding these before establishing the structure prevents surprises at the first dividend payment or annual filing.

Withholding tax on dividends

The Lithuanian withholding tax treatment of dividends depends on whether the recipient is an individual or a legal entity. In 2026, dividends paid to non-resident individuals are generally subject to 15% Personal Income Tax, subject to applicable double taxation treaty provisions. Dividends paid to foreign corporate shareholders are generally subject to 17% Corporate Income Tax withholding unless a statutory participation exemption or an applicable double taxation treaty provides relief. The participation exemption may apply where a qualifying corporate shareholder holds at least 10% of the voting shares for an uninterrupted period of at least 12 months, subject to statutory conditions and anti-abuse provisions. Reduced treaty rates cannot be assumed without examining the relevant agreement and the recipient’s eligibility. The participation exemption may eliminate withholding tax entirely where the Lithuanian entity pays dividends to an EU-resident parent company that meets the Parent-Subsidiary Directive conditions. We calculate the applicable withholding rate for each investor’s specific situation before the first dividend is declared.

Transfer pricing

Any transaction between the Lithuanian entity and a related party — a parent company, a shareholder, a subsidiary, or a company with common ownership — must be priced at arm’s length under Lithuanian and OECD transfer pricing rules. Common intercompany transactions include: management fees paid to the parent, interest on intercompany loans, royalties for IP licences, and payment for goods or services between group companies. VMI has the authority to adjust the Lithuanian entity’s taxable income if it determines that intercompany pricing was not at arm’s length. We prepare transfer pricing documentation for foreign-owned Lithuanian entities as part of our accounting and legal service.

Participation dividend exemption

The participation exemption allows a Lithuanian company to receive dividends from a subsidiary without paying Lithuanian CIT on those dividends, provided certain conditions are met: the Lithuanian company must hold at least 10% of the subsidiary’s share capital for at least 12 months; the subsidiary must not be a controlled foreign corporation in a low-tax jurisdiction; and the dividend must not be deducted from taxable income in the subsidiary’s jurisdiction. For a Lithuanian HoldCo receiving dividends from EU operating subsidiaries, the participation exemption is one of the primary tax planning tools.

Permanent establishment risk

A foreign company that conducts business activities in Lithuania through a fixed place of business — a management office, a representative, or a server that constitutes a business presence — may create a permanent establishment (PE) in Lithuania, subjecting it to Lithuanian CIT on the profits attributable to the PE. For foreign investors who manage their Lithuanian entity actively from another country, the PE risk is generally low. However, when key management decisions for the foreign parent are habitually made in Lithuania by a Lithuanian-based employee or director, PE exposure increases. We assess PE risk as part of the initial structure advisory.

Immigration Pathways for Foreign Entrepreneurs

Lithuania offers several immigration routes for non-EU entrepreneurs and investors who want to live and work in the country. The right route depends on the investor’s nationality, the nature of their business activity, and whether they are employed by the Lithuanian entity or operating as a self-employed entrepreneur.

EU Blue Card

The EU Blue Card is the primary route for highly qualified non-EU workers employed by a Lithuanian company. To qualify, the applicant must have a valid employment contract or binding job offer with a Lithuanian employer, hold a higher education qualification (or at least 5 years of professional experience in the relevant field), and receive a gross salary of at least 1.5 times the Lithuanian average gross salary. The Blue Card is initially issued for the duration of the employment contract plus three months, and entitles the holder to bring family members to Lithuania. It can be converted to a permanent residence permit after 5 years of cumulative Blue Card residence in EU member states.

National work permit

Since 1 July 2024, third-country nationals intending to take up ordinary employment in Lithuania generally must obtain a Lithuanian temporary residence permit authorising employment, unless a statutory exemption applies. A separate work permit is no longer the standard immigration route for ordinary employment. The Lithuanian Employment Service (Užimtumo tarnyba) issues work permits only for specific categories, including certain seasonal workers. For ordinary employment, the employer generally submits the required mediation letter through MIGRIS, while the foreign national applies for the appropriate residence permit. Employment may commence only when the applicant has the necessary legal authorisation. We manage both the work permit and residence permit applications in parallel to minimise the time to legal working status.

Startup Visa

Lithuania’s Startup Visa programme is designed for non-EU entrepreneurs who want to establish or develop an innovative startup in Lithuania. The programme is administered in partnership with Startup Lithuania. Applicants must submit a business concept to Startup Lithuania for assessment — concepts that are evaluated as genuinely innovative receive a letter of recommendation that supports the visa application. The Startup Visa gives the entrepreneur the right to reside and develop their business in Lithuania for up to two years, with the possibility of extension. It is one of the most accessible innovation-focused immigration routes in the EU.

Residence permit for investors

Lithuania does not operate a general residence-by-investment programme under which purchasing real estate or placing a fixed deposit in a Lithuanian bank automatically qualifies a third-country national for a residence permit. A temporary residence permit based on lawful business activities may be available under Article 45 of the Lithuanian Law on the Legal Status of Foreigners, subject to specific requirements. These generally include at least six months of genuine business activity, company equity capital of at least EUR 28,000, qualifying employment arrangements and, where the applicant relies on shareholder status, a personal investment of at least EUR 14,000 together with the applicable ownership requirements. Meeting the investment threshold alone does not guarantee residence authorisation. The investor residence permit does not require employment by a Lithuanian entity and is appropriate for investors whose primary activity is managing their investment.

Frequently Asked Questions