Corporate Law at Lithuania
Lithuania offers a modern and investor-friendly corporate legal framework, making it an attractive destination for both startups and established businesses. Here's an overview of the corporate law landscape in Lithuania:
🏢 Common Business Entities
1. Private Limited Liability Company (UAB)
Minimum Share Capital: €2,500
Shareholders: At least one; can be 100% foreign-owned
Liability: Limited to the company's assets
Tax Rate: Standard corporate income tax (CIT) rate is 15%. Small businesses with fewer than 10 employees and annual revenue under €300,000 may qualify for a reduced CIT rate of 5%. In the first year, qualifying startups can benefit from a 0% CIT rate.
VAT Registration: Mandatory if annual turnover exceeds €45,000
2. Public Limited Liability Company (AB)
Minimum Share Capital: €44,000
Shareholders: At least one; can be publicly traded
Governance: Requires a board of directors and supervisory board
Tax Rate: Standard CIT rate of 15%
Use Case: Suitable for larger enterprises seeking to raise capital through public offerings
📝 Incorporation Process
Choose Company Type: Decide between UAB or AB based on business needs
Prepare Documentation: Draft Articles of Association and other required documents
Open Bank Account: Deposit the minimum share capital
Register Company: Submit documents to the State Enterprise Centre of Registers
Obtain Licenses: Apply for necessary business licenses and VAT registration
The entire process typically takes 5 to 10 business days.
💰 Taxation Overview
Corporate Income Tax (CIT): 15% standard rate; reduced rates of 5% and 0% available for qualifying small businesses and startups
Value Added Tax (VAT): 21% standard rate; reduced rates of 9% and 5% apply to specific goods and services
Dividends: 15% withholding tax; exemptions available for qualifying parent-subsidiary relationships
Social Security Contributions: Employer contributes approximately 31% of gross salary; employee contributes approximately 10%
Minimum Wage: €840 per month as of 2025
📌 Regulatory Authorities
State Enterprise Centre of Registers: Responsible for company registration and maintenance of public records
State Tax Inspectorate (VMI): Oversees tax compliance and administration
Bank of Lithuania: Regulates financial institutions and markets
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