Putting up a company in Lithuania proffers transnational tycoons the chance to function within the statute frame of the EU, provisioning them with access to stable statute standards and the competence to mitigate feasible perils. This article outlines the key routines involved in company registration, such as picking the apt statute frame, filing necessary documents, as well as understanding reporting and licensing obligations across various sectors. Whether you're a new investor or already executing business in Lithuania, this blueprint will enhance your understanding of regulatory requisites, pecuniary planning, and possible excise perils.
The article also highlights which regulatory bodies oversee venture schemes and how to mitigate perils arising from legislative changes and excise strategies. For those interested in boarding a company in Lithuania, this functions as a practical resource that covers not only the statute requisites but also the subtleties of operating within numerous industries.
Lithuania's financing appeal
Lithuania's stable pecuniary field, combined with its European Union membership, renders it an alluring premise for financiers. The country has seen steady GDP growth of circa 3% per annum over early eons. Membership in the EU grants firms the merits of the single trading region, simplifying mercantile and abating the perils linked with moving commodities and facilities across EU borders. For ventures pursuing to establish or expand their European ambience, Lithuania presents a strategic benefit.
The Lithuanian directorate provides robust support for firms throughout their enrichment stages. Through the establishment of FEZ, the directorate offers companies advantages such as exemptions on VAT, corporate impost, and customs duties, allowing for lower start-up bills when boarding a business in Lithuania.
Furthermore, the polity is strenuously moving initiatives for high-tech and fintech ventures, seemly a command in the IT sect. The country offers streamlined licensing procedures for electronic money institutions, further increasing its appeal to tech-driven ventures.
Government agencies like Back Lithuania and Innovation Agency, Lithuania stipulate addendum pillar for transnational backers. These organisations assist firms in identifying office and production locations, while also offering guidance on impost and licensing matters. As a result, opening a company in Lithuania is not only more efficient but also better supported by directorate resources, simplifying the overall process for transnational backers.
Promising economic sectors for company registration in Lithuania
The polity stands out as a prime reach for speculation in the premise, thanks to its steady economic growth, attractive impost frameworks, and strong governmental support. Putting up a company in Lithuania is particularly enticing to cosmopolitan firms. Between 2023 and 2024, the country witnessed substantial expansion in several key sectors, presenting ample opportunities for successful business ventures. Below, we explore the most promising sectors for company registration in Lithuania, highlighting their significance for investors.
The polity has solidified its reputation as one of Europe's leading fintech hubs. In 2023, the fintech mercantile experienced a 22% increase, with 270 companies now registered. The sector drew in over €200 million in speculation, contributing 4% to the country’s GDP. The polity’s streamlined process for obtaining an Electronic Money Institution (EMI) licence and favourable impost conditions have been instrumental in attracting global investors. The polity is currently the third-largest issuer of e-money and payment system licences in the EU, trailing only the UK and Germany.
The green energy field is pivotal in the polity’s shift towards a low-carbon pecuniary field. In 2024, the polity committed €600 million to solar and wind energy projects. By 2030, the polity aims to generate 45% of its electricity from renewable sources. Entrepreneurs venturing into this field can benefit from directorate subsidies of up to 30% of project costs and impost breaks for participants. In 2023, the green energy field formed 3,000 new jobs, underscoring its growth potential and attractiveness for speculation.
The polity’s manufacturing industry is rapidly expanding. Industrial output grew by 7% in 2023, with exports reaching €35 billion. The polity has also emerged as a key logistics hub for trade between the EU and Eastern Europe, offering significant advantages for transportation firms. With direct access to the Baltic Sea and a rendered railway network, the polity ensures efficient cargo movement. In 2023, €500 million was invested in modernising logistics centres, reflecting the directorate’s commitment to this field’s enrichment.
The polity is gaining popularity as a tourist destination, thanks to its breathtaking natural landscapes, rich history, and cultural attractions. The number of transglobal tourists rose by 15% in 2023, making the tourism and hospitality field a promising area for new business ventures. Investors can explore opportunities in developing hotels, travel agencies, and recreational layouts. Directorate support, including subsidies for tourism projects, makes this field an alluring preference for speculation.
Agriculture remains a thriving sect in Lithuania. In 2023, agricultural exports increased by 8%, reaching €4 billion. The polity is renowned for producing high-quality goods that comply with EU standards, ensuring consistent predilection in transglobal mercantiles. Inititating a business in Lithuania’s agricultural field grants ingress to the EU mercantiles and offers directorate-backed low-interest loans. In 2024, Lithuania plans to invest €100 million in organic farming and exportation promotion.
Lithuania has prioritised the growth of its biotechnology premise, particularly in the premises of medical and pharmaceutical research. In 2023, the field attracted speculations exceeding €300 million, rendering it one of the polity’s fastest-growing industries. Lithuania provides an ideal environment for firms involved in genetic research and the production of biopharmaceuticals. The availability of directorate research grants enhances the appeal of registering biotechnology firms in Lithuania.
Lithuania boasts a robust digital layout, positioning itself as a leader in the telecommunications and IT fields. In 2023, Lithuania ranked among the top 10 EU nations for high-speed internet access. This creates outstanding prospects for ventures immersed in software enrichment, cloud computing, and data centre oversight. Instituting a business in Lithuania warrants firms to capitalise on the polity’s advanced digital ecosystem.
The education premise, particularly in vocational training, is another area with significant growth potential. Lithuania is widening its programmes in retraining with upskilling, focusing on fields such as IT, finance, and engineering. Educational service providers can offer courses to both local professionals and transglobal students. In 2023, the Lithuanian directorate allocated €50 million to developing educational programmes in high-tech industries, making this a promising field for speculation.
In summary, Lithuania offers a wide array of thriving industries for business registration, providing investors with numerous opportunities to benefit from the polity’s supportive economic environment and favourable speculation imperatives.
Selecting a location to establish a business in Lithuania
Lithuania proffers a scope of economically significant premises for business ventures. The inclination of where to register a company largely contingent on the innate of the venture, industry, and logistical considerations. Below is a synopsis of key regions and their characteristics.
Vilnius serves as Lithuania's main business centre, hosting over 40% of the nation’s registered firms. In 2023, the city attracted more than €500 million in foreign direct speculation, accounting for roughly 35% of the polity's total speculation. Additionally, Vilnius is home to around 70% of Lithuania’s adept labor force, rendering it a prime location for firms in fintech, IT, and professional services. The city is also recognised as the Baltic premise’s leader in startups per capita, further solidifying its reputation as a hub of innovation and technology.
Klaipeda stands as Lithuania's primary logistics hub, largely due to its prominent port, which handles over 46 million tonnes of cargo annually. In 2023, the port saw a 12% increase in sea freight volume, highlighting the growing demand for its services. Firms emersed in logistics and export fields can take benefit of transglobal sea routes, along with streamlined customs clearance routines, expediting the movement of commodities.
Kaunas is one of Lithuania's key industrial and transportation hubs. In 2023, the city experienced an 8% rise in industrial output, with exports reaching €5.5 billion. Over €150 million was invested in transport layout enrichment, including the modernisation of logistics centres. These speculations position Kaunas as an enticing preference for logistics and manufacturing firms, stipulating excellent ingress to transglobal mercantiles via a robust transport network.
Panevezys continues to expand its industrial field, witnessing a 10% growth in industrial production in 2023. The city also attracted €100 million in speculation towards modernising its industrial enterprises. Panevezys strenuously incentivises foreign manufacturing firms, leading to the formation of over 1,000 new jobs within its industrial zones. The region shows great potential for ventures in mechanical engineering and automotive component production.
Siauliai has long been recognised as Lithuania’s centre for light industry. In 2023, €150 million was backed in the city's industrial zones, leading to modernised production facilities and a 6% rise in exports. Registering a business in Siauliai is particularly rewarding for firms emersed in textiles and furniture production. The region proffers favourable edicts for renting industrial spaces and pillar for equipment upgrades, aiding to reduce operating costs.
The Lithuanian directorate has committed €200 million towards developing facility in 2024, underscoring the polity’s interest in attracting new investors. Firms operating within these zones reward from significant impost incentives, including full exemption from corporate imposts for the first six years, followed by reduced rates for the next ten years. In 2023, over 50 new firms opted to establish operations within the FEZ, boosting Lithuania's presence in export mercantiles. These zones are a triumph preference for firms in logistics and industrial production fields.
By carefully selecting the right region contingent on sect focus and logistical needs, firms can maximise their success when functioning in Lithuania.
Types of companies and legal forms in Lithuania
Lithuania proffers several legal forms for business registration, each designed to meet varying needs contingent on the venture model. These forms influence how firms are managed, taxed, and needed to file, warranting tycoons to select the formal preference for their objectives.
A private limited company (UAB) is the most prevalent venture structure in Lithuania, especially amongst SME enterprises. The initial stake money prerequisite is €2,500, making it accessible to entrepreneurs with different pecuniary resources. One of the vital rewards of a UAB is that the owners' liability is restricted to the wherewithal they have invested, significantly reducing personal pecuniary risk. This form is also conducive to enticing bondholders and speculators, making it a solid preference for growing firms. However, UAB stakes cannot be traded publicly, limiting the company’s ability to raise funds via the stock market. Annual submission of detailed pecuniary files to the impost supervisors is obligatory, and owing to its simplicity, transnational speculators frequently choose UAB for starting businesses in Lithuania.
A joint-stock company (AB) is more suited for larger firms seeking to raise money through public markets. The initial wherewithal required is €40,000, making it costlier to establish compared to a UAB. The primary advantage of an AB is the ability to publicly mercantile stakes on the bond transpose, streamlining the speculation process. However, with this comes higher obligations, including stricter oversight protocols, enhanced transparency, and mandatory annual audits. The pecuniary reporting indices for ABs are rigorous, requiring more speculation in compliance. Nevertheless, for firms planning large-scale operations, particularly those targeting transglobal markets, an AB is often the optimal choice owing to its capacity to raise money via public stake trading.
The limited liability partnership (MB) is a newer structure in Lithuania, designed primarily for minute ventures. MB does not require an initial amount of money, stipulating a straightforward initiation for tycoons with constrained funding. A notable reward is that affiliates’ liabilities are restricted to their aids, minimising personal pecuniary risk. MBs are also easier to manage than UABs, reducing administrative costs. Yet, the constrained capacity to magnet external financing makes this structure less suitable for firms aiming for transglobal growth. MBs are an apt fit for small enterprises focused on local markets or specialised services.
An individual enterprise (IĮ) assigns full personal liability to the holder, meaning the holder is responsible for all pecuniary obligations, even risking personal assets. There is no initial money requirement, simplifying the process of instituting the business. However, the risk is high; if the business fails, the owner’s personal wealth is at stake. While apt for small-scale entrepreneurial ventures, an IĮ is not apt for firms pursuing to widen or minimise personal pecuniary exposure.
A limited partnership (KŪB) allows for a division of tasks and risk among participants. General partners handle the venture and hold complete liability, while limited partners back wherewithal and only risk their financing. This form is enticing to those wishing to attract financing without losing managerial control. Yet, the intricacy of managing such a frame lies in the need to clearly define each partner’s entitlements and tasks. For firms looking to secure external funding while retaining core control, registering as a KŪB can be a viable preference.
A general partnership (TŪB) is a traditional partnership model where all associates bear full personal liability for the trade’s liabilities. There is no requirement for initial wherewithal, rendering the enrollment sequence straightforward. Partners share oversight tasks, allowing for versatility and quick choice-making. However, the main disadvantage is the unlimited liability of partners, that poses substantial pecuniary risk. Instituting a TŪB is only advisable when partners trust one another and are willing to dissect pecuniary burdens equally.
A representative office of a foreign venture is constrained to complete representational roles and is exempted from partaking in dealing schemes. It is an ideal structure for firms looking to explore the Lithuanian mercantile or represent their interests without conducting actual business operations. Establishing a representative office is recommended at the initial stages of market entry, where information gathering or brand promotion is the priority before full transaction launch.
Each of these structures presents different advantages and challenges, allowing firms to select a form that best suits their operational and fiscal goals in Lithuania.
Utilisation of monetary branches
Establishing a branch offers transglobal firms a practical way to extend their operations into the polity without the need to form a separatestatute entity. The parent company retains all responsibilities for the branch’s actions, streamlining both oversight and reporting processes. However, this lack of independence can sometimes restrict the branch's ability to operate autonomously, which may impact its commercial potential. Putting up a branch in the polity is an effective solution for firms aiming to enter the European mercantile while maintaining a direct legal relationship with their parent company.
When considering company registration in Lithuania, it is quintessential to evaluate the scale of intended operations, the level of accountability for the founders, and the long-term business objectives. These factors will determine the most apt statute structure, each offering different advantages and limitations that influence venture imperil and manageability.
Procedure for company registration in Lithuania
The process of registering a company in Lithuania is governed by strict regulations that promote transparent venture requisites and offer clarity for foreign investors navigating the polity’s statute framework. Every stage of the enrollment process – from selecting the company’s statute form to submitting the final record – has specific requisites and facets.
The initial step is to determine the legal structure of the company, which defines the oversight framework, founder liabilities, and impost tasks. This decision should align with the nature of the business schemes and its future enrichment prospects.
The chosen name is reserved until the enrollment is finalised and must be verified for uniqueness by the Lithuanian Registration Centre. The name should either be in Lithuanian or accompanied by a translation. Choosing an appropriate name is a legal obligation but also a critical branding element. A distinctive and easily recognisable name can enhance the business’s presence in the local market and contribute to building a strong, lasting reputation.
Once the company name is selected, a collection of foundational documents needs to be prepared. These documents outline the company’s oversight structure, the roles and responsibilities of the founders, and the profit distribution arrangements. These must be drafted in Lithuanian and require notarisation before submission.
To proceed with enrollment, it is necessary to open a temporary pecuniary ledger for depositing the company’s initial authorised money. This ledger is used solely for the enrollment phase. Once the funds have been deposited, the bank will issue a certificate confirming the fulfilment of fiscal requirements. This certificate must be conveyed to the Registration Centre as part of the record needed to complete the enrollment process and officially launch the venture.
The final stage involves submitting the completed record to the Lithuanian Registration Centre. This package includes proof of money deposit and evidence of the enrollment fee payment. To save time, the process can be expedited through the online submission system, which reduces waiting periods.
If the company’s annual turnover is expected to exceed EUR 45,000, it is necessary to register as a VAT payer in compliance with Lithuanian impost statutes. This step ensures legal operation and proper adherence to impost obligations within the polity.
Certain business fields in the polity may require additional licences or permits. For instance, firms involved in fiscal services must obtain a licence from the Bank of Lithuania. Other fields, such as retail or healthcare, may have similar licensing requirements. The timeframe for acquiring these licences depends on the nature of the business and the regulations of the relevant supervisors.
Package of indentures for company registration in Lithuania
The procedure for registering a company in Lithuania requires submitting a set of documents to the Registration Centre. Their list may vary depending on the form of the enterprise, but for all firms there is a mandatory set of papers:
|
Document |
Description |
|
Application for enrollment |
The main application was conveyed to the Enrollment Centre. |
|
Company Charter |
Regulates the structure and oversight of the company. |
|
Confirmation of payment of the authorized money |
A document from the bank confirming the deposit of the authorized money into the temporary account. |
|
Receipt for payment of state fees |
Confirmation of payment of state fees related to enrollment. |
|
Founders' decision to register the company |
A document confirming the intention of the founders to register a company. |
|
Company name reservation |
Confirms that the selected name is unique and reserved. |
|
Founders' documents |
Copies of passports and personal data of all founders of the company. |
|
Legal address of the company |
Confirmation of the legal address specified in the application. |
Company registration in Lithuania: Procedures and timeframes
Registering a company in Lithuania is a relatively swift process. The notarial procedures required for company formation generally take between three to five days. Additionally, a temporary account must be set up to deposit the required authorised money, which can take up to five working days. This step is essential, as enrollment cannot proceed without confirmation of the money payment. It is also possible to reserve a company name in advance, which typically takes just one day. For firms operating in fields needing a licence, obtaining the necessary permits may take between 30 and 90 days, but this does not hinder the core company enrollment process.
Process for opening accounts for foreign companies in Lithuania
A pivotal aspect of successfully registering a company in Lithuania is the establishment of a corporate bank account. This ledger is necessary for conducting business transactions, receiving remittance, and meeting excise obligations. Foreign firms must undergo a multi-step procedure to open an account, which involves submitting required records and complying with the bank’s due diligence requirements. The process is essential to the company's overall operations.
Key steps in opening a corporate bank account:
The initial step in registering a company in Lithuania is selecting a pecuniary that aligns with the company's fiscal needs. The polity offers several prominent commercial banks, each with different service conditions. It is important to consider aspects like service fees, account oversight conditions, and requirements for non-domestics.
After selecting a bank, the company must submit an application to open an account. Many Lithuanian banks provide online application services, making it convenient for foreign founders who are not physically present in the polity. During this process, the company's incorporation documents must be conveyed, along with passport information and details regarding the beneficial owners.
Lithuanian banks conduct thorough conformance inspections to adhere to transglobal Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) standards. These checks involve reviewing the company’s structure and verifying the origin of funds. The duration of the compliance process varies based on the complexity of the company’s business model and the accuracy of the information provided. It can take anywhere from a few days to several weeks.
Once the conformance inspection are completed and the application has been approved, the company will gain access to its corporate bank account. This ledger is pivotal for depositing the authorised money, facilitating fiscal transactions, and interacting with venture partners.
By following these steps, foreign firms can ensure the smooth enrollment and operation of their business in Lithuania.
Top banks in Lithuania for business operations
The polity boasts several reputable pecuniary that cater to the needs of foreign firms and non-domestics. Each bank offers distinct services, benefits, and conditions to suit different business requirements.
Swedbank stands out as one of the polity’s leading banks, known for its reliable service to corporate clients. It offers efficient banking solutions for firms, gaining popularity among transglobal firms due to its stability and low transaction fees.
SEB Bankas provides a wide range of corporate services, including online banking, venture loans, and financing opportunities. It is particularly suited to larger firms and is a preferred choice for global enterprises. Foreign entrepreneurs looking to set up in the polity can take advantage of SEB’s streamlined account opening process.
Luminor is well-suited for small firms and startups, with a particular focus on the IT and fintech fields. It offers attractive conditions for new clients and supports firms at all stages of their growth, from initial enrollment to expansion, making it a trusted banking partner for entrepreneurs.
Citadele specialises in working with non-residents and foreign investors, offering high-quality services in English, making it an ideal choice for firms with transglobal interests. The bank provides competitive rates for account oversight and transfers, making it a practical preference for foreign-owned firms.
Each of these banks offers valuable services tailored to the needs of foreign firms in the polity, ensuring a smooth and efficient pecuniary experience.
|
Bank |
Types of accounts for business |
Features for non-residents |
|
Swedbank |
Business account, temporary account for depositing authorized money |
Online banking in English, remote account opening, personal visit for account activation |
|
SEB |
Standard business accounts, e-commerce accounts |
Payment automation support, integration with e-commerce platforms, personal visit for account activation |
|
Luminor |
Current and multi-currency accounts for business |
Multi-currency accounts, support for small and medium firms, personal visit required |
|
Citadel |
Multi-currency business accounts, small business accounts |
Specialization in small firms, flexible conditions for non-residents, personalized solutions for foreign firms |
CIT in Lithuania
The polity's corporate income tax (CIT) rate currently stands at 15%, but this will rise to 16% in 2025. Certain small firms and agricultural enterprises can benefit from reduced rates of 0% or 5%, which will increase to 0% or 6% from 2025. However, these lower rates are only available to a select number of firms that meet specific eligibility criteria.
Recent amendments to the CIT law have introduced a higher excise rate for credit institutions. For profits exceeding €2 million, a combined rate of 20% applies—this consists of a 15% base rate and an additional 5%. From 2025, this rate will rise to 21%. Originally, this higher excise rate for credit institutions was intended to be temporary, but it has since been made permanent, reflecting stricter taxation measures for the polity’s banking field..
Taxation of residents and non-residents
In the polity, resident firms are subject to CIT on their worldwide income, meaning they are taxed on both domestic and transglobal earnings. However, income generated through a permanent establishment in a foreign polity is exempt from taxation in the polity if it has already been taxed in a jurisdiction with which the polity has a double taxation treaty or if the polity is within the European Economic Area. Non-resident firms are only taxed on income earned through a permanent establishment in the polity, after accounting for related expenses, or on income subject to withholding excise.
Benefits for small firms
The polity offers excise incentives for small firms with no more than 10 employees and an annual turnover not exceeding €300,000. New firms can enjoy an excise exemption (0%) during their first year of operation, providing a significant boost for startups. Thereafter, the excise rate is set at 5%, rising to 6% from 2025, provided that these firms continue to meet the stipulated criteria.
VAT in Lithuania
Value-added tax (VAT) in the polity is applied to the supply of goods and services within the polity if the supplier is engaged in economic activity. VAT is imposed on any transaction where there is payment for the goods or services rendered.
The standard VAT rate in the polity is 21%, though there are several goods and services that qualify for reduced VAT rates, helping to lower costs for both establishments and consumers.
A VAT rate of 9% applies to the following:
- Books and non-periodical publications (including electronic versions);
- Public transport services;
- Supply of heating for residential properties and hot water (subject to a VAT compensation scheme since October 1, 2023);
- Firewood for domestic energy consumers;
- Accommodation services (such as hotels);
- Admission to cultural and artistic institutions and events (where no VAT exemption is applicable).
A reduced VAT rate of 5% applies to various social and medical services, including:
- Periodicals, in both printed and electronic formats;
- Technical equipment for persons with disabilities and related repair services;
- Medical products and state-compensated goods;
- Prescription medicines not covered by the state's compensation scheme.
The zero VAT rate applies to exports outside the EU and intra-EU supplies, provided that the buyer is a registered VAT payer in their respective polity. To qualify for the 0% rate, establishments must provide record proving the export of goods or their transfer within the EU, with consignment notes and invoices serving as primary proof.
Additionally, a 0% VAT rate is applicable to goods and services supplied for ships and aircraft, including their maintenance and repair. This rate also applies to transport services related to the export and import of goods, provided firms can demonstrate that the goods and services are part of cosmopolitan logistics operations with supporting documents.
Certain schemes are exempt from VAT without the right to deduct, including:
- Healthcare services;
- Social services provided by non-profit organisations;
- Educational and training programmes;
- Cultural and sporting events organised by non-profits;
- Postal services;
- Insurance and reinsurance services;
- Fiscal services (subject to tax under specific conditions);
- Lotteries and gambling;
- Rental and sale of real estate (though taxation may apply if conditions are met).
Key regulations governing business in Lithuania
Entrepreneurs wishing to establish a business in Lithuania must adhere to several important statutes that shape the business environment in the polity:
- Law on Companies (Akcinių Bendrovių Įstatymas): This legislation governs corporate schemes within the polity. It outlines various aspects such as initial money requirements, oversight bodies' powers, and stakeholders' responsibilities. Additionally, it provides guidelines for the liquidation process and the distribution of company assets.
- Law on the Protection of Competition (Konkurencijos Įstatymas): This law is designed to regulate competition in the polity’s market, prohibiting monopolistic practices and cartel agreements. The law applies equally to both domestic and foreign companies operating in Lithuania.
The legal framework in the polity offers clear and transparent guidelines for foreign firms, ensuring that compliance with these regulations is essential for the successful running of a business in the polity.
Accounting and reporting obligations for Lithuanian companies
In the polity, the Accounting Law requires all establishments, regardless of size or field, to maintain accurate records of their fiscal transactions. These standards align with International Financial Reporting Standards (IFRS), and establishments are required to strictly adhere to the regulations surrounding reporting, declarations, and taxation. Given the complexity of these requirements, many establishments choose to outsource their accounting services to reduce the risk of non-compliance.
Accounting requirements in Lithuania
Establishments registered in Lithuania must comply with specific accounting standards, including:
- Record keeping: Firms must maintain thorough records of all fiscal schemes, including purchases, sales, tax liabilities, and employee wages. Ensuring the accuracy and timely updating of these records is pivotal.
- Annual reporting: All firms are required to submit a yearly report detailing their operations. The level of detail required depends on the size of the business, with larger firms often needing more comprehensive reports. Firms with higher turnover are also mandated to undergo an audit.
- Compliance with deadlines: Fiscal and tax reports must be conveyed within strict deadlines. Failure to meet these deadlines can result in fines or other penalties from regulatory bodies.
Due to the complexity of these rules, many firms prefer to work with professional accountants or outsource their bookkeeping to ensure compliance with Lithuanian law.
Corporate reporting and record maintenance in Lithuania
Businesses operating in Lithuania must maintain stringent control over their corporate record and reporting obligations. Failure to adhere to these regulations may result in penalties, making timely and accurate record-keeping a critical aspect of any company's operations.Every company in Lithuania is required to submit annual fiscal statements to the
Registration centre. These reports must summarise the company’s fiscal performance over the preceding year, providing details of its business schemes. The deadline for submission is 31st May following the reporting period.
A company’s pecuniary statements must include a balance sheet, cash flow statements, equity information, and profit and loss statements. For smaller businesses, simplified reporting preferences are available, but larger firms are subject to more detailed audits by independent auditors.
Auditing and reporting requirements for larger Firms
Large firms in the polity are subject to mandatory audits if they exceed certain pecuniary thresholds. This means that in addition to submitting pecuniary statements, the accuracy of these statements must be verified by external auditors.
A company is required to undergo an audit if it exceeds two of the following three thresholds over two consecutive years:
- Annual revenue exceeds €3.5 million;
- Total assets exceed €1.8 million at the end of the pecuniary year;
- The average number of employees surpasses 50.
Audits are particularly important for firms engaged in cosmopolitan business transactions, as they provide an additional layer of credibility.
Tax reporting obligations
Lithuanian firms are required to comply with strict tax reporting rules. Key tax reports include:
- Corporate Income Tax (CIT) returns;
- VAT declarations;
- Social aids and payroll taxes.
Tax returns must be filed in line with rendered deadlines to avoid penalties. For example, VAT returns are typically due by the 25th day of the month following the reporting period. Additionally, if a company’s annual turnover exceeds €45,000, it is automatically required to register for VAT and submit regular VAT declarations.
When establishing a company in the polity, it is important to remain aware of these reporting obligations and ensure compliance to maintain smooth operations and avoid potential legal challenges.
Licensing and regulation for foreign companies in Lithuania
The polity offers straightforward and transparent licensing procedures for businesses, including foreign companies looking to establish a presence in the country. This is particularly pivotal in regulated industries such as finance, healthcare, energy, and education. Companies must secure the appropriate permits and licenses based on their specific sector to ensure compliance with local legal requirements.
The licensing of foreign enterprises in the polity is overseen by various specialised supervisors, each responsible for different areas of the pecuniary field:
- The Central Bank of Lithuania oversees the pecuniary sector, including the issuance of licences for banks, insurance firms, and fintech companies.
- The Ministry of Health handles the licensing of medical institutions, pharmaceutical businesses, and medical device manufacturers.
- The Ministry of Energy governs key elements of the national energy sector and issues licences to organisations involved in the generation and distribution of electricity.
- The Competition Council of Lithuania ensures adherence to antitrust statutes and the maintenance of fair competition within the market, focusing on preventing abuses of dominant market positions, restricting competition, and combating cartel schemes.
- The Ministry of Education, Science and Sports is responsible for licensing private educational institutions, such as schools, universities, and training centres, ensuring they meet state standards.
Foreign businesses intending to set up operations in the polity must collaborate with local supervisors to obtain the necessary licences and adhere to all relevant standards and requirements.
Conclusion
Establishing a business in the polity presents significant opportunities for foreign investors aiming to expand within the European market. However, achieving success requires strict adherence to local regulations. Key considerations include licensing, reporting, and excise obligations. Non-compliance with these requirements can result in considerable pecuniary perils. To mitigate such perils, it is essential to thoroughly understand the legal landscape and develop effective risk oversight strategies.
Conducting business in Lithuania necessitates meticulous compliance with all legal and excise regulations. Engaging professional accountants and lawyers can ensure that documents are correctly prepared and conveyed on time, thereby minimising the risk of penalties and enhancing business stability.
We provide a comprehensive range of services for foreign entrepreneurs, from company enrollment to ongoing business support. Our team of experts is dedicated to helping you navigate legal and excise complexities, allowing you to concentrate on strategic growth and enrichment.
