Business Services for Startups in Lithuania

Why Startups Choose Lithuania

Lithuania has built a credible startup ecosystem over the past decade — not through marketing claims, but through a specific combination of regulatory conditions, talent availability, and operational practicality that foreign founders notice when they compare it against other EU options.

Tax environment

From 1 January 2026, Lithuania’s standard Corporate Income Tax (CIT) rate is 17%. Qualifying small companies with annual revenue not exceeding EUR 300,000 may benefit from a reduced 7% rate, subject to statutory eligibility conditions and restrictions concerning related entities. Eligible newly established companies may qualify for a 0% CIT rate during their first two tax periods, provided that all applicable requirements are satisfied. Since 2026, the reduced-rate regime no longer includes a general maximum of 10 employees. The 0% rate applies to qualifying taxable profits, not exclusively to retained earnings, and eligibility must be assessed under the Lithuanian Law on Corporate Income Tax.

Speed and cost of incorporation

A Lithuanian UAB takes 1–3 business days to register once documents are filed with the Register of Legal Entities. The state registration fee is €51. The minimum share capital of €1,000 is deposited into a bank account and becomes company equity — it is not a government fee. For a foreign founder, the total out-of-pocket cost to have a registered EU entity, a Lithuanian IBAN, and VAT registration in place is lower than in most comparable EU jurisdictions.

Talent pool

Vilnius and Kaunas have a concentrated technology talent pool with competitive salaries relative to Western Europe. Lithuanian developers, engineers, product managers, and data specialists are increasingly sought by international companies — and Lithuania’s relatively low cost of living means that competitive EU-level salaries go further here than in Berlin, Amsterdam, or Stockholm. For startups that plan to hire technical staff in Lithuania, the labour market is accessible and the quality of candidates is high.

EU market access from day one

A Lithuanian UAB is a full EU legal entity. It can contract with EU clients, hire EU employees, apply for EU grants and funding programmes, open accounts at EU banks, and passport regulated services across EU member states under a single authorisation. For non-EU founders entering the European market, this matters: you are not building a presence in a small Baltic country — you are establishing an EU-domiciled company with full single-market access.

Startup ecosystem and support

Lithuania has an active startup community with dedicated support structures including Startup Lithuania, the national startup accelerator programme, and Invest Lithuania — the national investment promotion agency. Several EU and national grant programmes are available to Lithuanian-registered startups, and the country’s digital infrastructure (ranked among the highest in the EU for internet speed and digital public services) makes remote operation practical from the outset.

What a Startup Needs From Day One

The most expensive legal and accounting problems startups face are not the result of unusual circumstances — they are the predictable outcome of structures that were set up too quickly, too cheaply, or without professional input at the point where it was most needed. A founder agreement that was never written, an IP assignment that was never executed, a VAT registration that was skipped because turnover seemed too low — these become expensive to fix under time pressure. Getting them right at the start costs a fraction of what they cost to resolve later.

The three areas where startup legal and accounting support pays back most directly are company structure, IP ownership, and accounting setup. Each is described below.

Company structure and founder agreements

A startup with two or more founders needs a shareholder agreement from day one — not when the first disagreement arises. The shareholder agreement defines what happens when a founder leaves before vesting their shares, what decisions require unanimous approval versus a simple majority, what restrictions apply to transferring shares to third parties, and how disputes are resolved. A Lithuanian UAB with two 50/50 shareholders and no shareholder agreement is functionally deadlocked the moment the two founders disagree on anything that requires a shareholder resolution. We draft shareholder agreements that are practical, enforceable, and proportionate to the stage of the company.

IP ownership — who owns what

For software startups and any company whose value is rooted in intellectual property, the ownership of that IP must be correctly documented from the outset. Code written by a founder before the company is incorporated does not automatically belong to the company — it must be assigned. Under Article 10(2) of the Lithuanian Law on Copyright and Related Rights, the economic rights to a computer program created by an employee in the performance of employment duties or following the employer’s instructions generally belong to the employer, unless otherwise agreed. A separate IP assignment clause is not a universal legal prerequisite for employer ownership of employee-created software. Nevertheless, employment agreements should clearly address intellectual property ownership, contractual exceptions and the treatment of software developed outside the employee’s assigned duties. Code written by a contractor does not automatically belong to the company — a separate IP assignment agreement is required. We ensure the IP chain of ownership is clean before it matters, which is during investor due diligence.

Accounting setup from day one

Lithuanian law requires double-entry bookkeeping from the date of registration — not from the first invoice. A startup that begins trading without an accounting system in place, then retroactively reconstructs its books six months later, consistently finds errors, missing records, and VAT exposures that are more expensive to correct than they would have been to prevent. We set up the accounting system, chart of accounts, and VAT registration before the company issues its first invoice — so compliance is built in from transaction one.

From Idea to Operating Company: Your Setup Roadmap

This is the sequence we follow with every startup client — from the first consultation to a fully operational Lithuanian company with accounting, legal documentation, and compliance in place.

The Five Most Expensive Startup Legal Mistakes in Lithuania

These are not hypothetical risks — they are the problems we are asked to fix most frequently by startups that come to us after their initial setup was done too quickly or without professional input.

1. No shareholder agreement between co-founders

The most common and most expensive mistake. Two founders register a UAB, split shares 50/50, and assume goodwill will hold the arrangement together. When one founder wants to leave, bring in a new co-founder, take on investment, or simply disagrees with the direction of the company — and there is no shareholder agreement defining the process — the default is Lithuanian company law, which is not written for startups. Deadlock, share transfer disputes, and investor-blocking scenarios are all avoidable with a properly drafted shareholder agreement prepared at incorporation. Preparing it after the fact, under pressure, costs significantly more.

2. IP not assigned to the company

Founders build the product before the company is incorporated. The company is registered, the product is launched, investment interest follows — and then due diligence reveals that the intellectual property is legally owned by the founders as individuals, not by the company. An IP assignment agreement is a straightforward document. Not having one at the right time transforms it into a negotiation with founders who now have leverage they did not have before investment was on the table.

3. Contractors treated as employees, or vice versa

Lithuanian labour law distinguishes clearly between employees and independent contractors. The classification is based on the substance of the relationship — not on what the contract is called. A person who works exclusively for your company, under your supervision, on a schedule you set, using your equipment, for an ongoing indefinite period, is an employee under Lithuanian law regardless of whether you have signed a ‘contractor agreement’. Misclassification results in unpaid social contributions, personal income tax arrears, and fines — calculated retrospectively from the start of the relationship.

4. Skipping VAT registration when turnover is approaching the threshold

Since 1 May 2025, the Lithuanian domestic VAT registration threshold of EUR 45,000 is assessed by reference to qualifying turnover in the current and preceding calendar years. VAT registration may also be required in connection with certain cross-border transactions, including the receipt or provision of services and intra-Community acquisitions, even where domestic turnover remains below EUR 45,000. The applicable VAT treatment must be determined according to the transaction type, place-of-supply rules and any available small business scheme exemptions. VAT obligations arising after a threshold is exceeded must be assessed under the relevant statutory rules rather than described as automatically applying to every subsequent sale. For B2B startups that invoice VAT-registered clients, voluntary VAT registration from day one is almost always advisable — it simplifies invoicing, enables input VAT recovery, and avoids the threshold problem entirely.

5. No accounting until the first investor asks for financial statements

Lithuanian law requires double-entry bookkeeping from the date of registration. A startup that has been operating for 12 months with no formal accounting records, then needs to produce financial statements for an investor or a bank, faces a retroactive reconstruction exercise that is time-consuming, expensive, and invariably reveals transactions that should have been handled differently. Monthly accounting from day one costs less per year than a single retroactive reconstruction project.

Typical Costs for a Lithuanian Startup

The tables below set out the typical cost ranges for the main components of setting up and running a Lithuanian startup. All professional service fees are fixed-price — we quote before we start and do not charge by the hour.

Setup costs — one-time

Ongoing monthly costs — operational company

How We Work with Startups

We understand that startups move fast and have limited time for administrative overhead. Our engagement model is designed around that reality — fixed prices, clear scope, and a single point of contact who knows your company’s full picture.

Frequently Asked Questions