What to Know about Lithuania

Lithuania (Lietuva) or a Republic of Lithuania (Lietuvos Respublika) is one of three Baltic states and lies on the eastern shore of the Baltic Sea. Lithuania shares land borders with Latvia, Belarus, Poland and Russia.

Lithuania is a developed country, with a high-income advanced economy, ranking very high in the Human Development Index. It ranks favourably in terms of civil liberties, press freedom and internet freedom. Lithuania is a member of the European Union, the Council of Europe, Eurozone, the Nordic Investment Bank, Schengen Agreement, NATO and OECD.

Basic information

About Lithuania

  • Capital – Vilnius
  • Official language – Lithuanian
  • Currency – EUR
  • Population – 2,670,230 (November 2021)
  • Territory – 65,200 km2 
  • Climate – Temperate climate with both maritime and continental influences.
  • Time Zone – GMT/UTC +2
  • Calling country code – +370
  • Internet TLD – .lt

Brief  History

In the 1230s, Lithuanian lands were united by Mindaugas, founding the Kingdom of Lithuania on 6 July 1253. In the 14th 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. On 1569 Lithuania and Poland formed a voluntary two-state personal union called Polish-Lithuanian Commonwealth that lasted more than two centuries. 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 km2. 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. The 3 biggest counties are Vilnius, Utena and Telsiai.

Government System

Lithuania is a democratic country that held its first independent general elections on 1992. 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 has a flat tax rate rather than a progressive scheme. According to Eurostat the personal income tax (15%) and corporate tax (15%) rates in Lithuania are among the lowest in the EU. Corporate tax rate in Lithuania is 15% and 5% for small businesses.

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
  • Eligible fixed tax rates in Lithuania on individuals’ income and entities that allow to make great profit doing business

Company in Lithuania UAB is happy to assist you in starting your business in Lithuania, accounting services and obtaining a cryptocurrency licence.

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