Good to know
Good to Know
- There is no local-partner, local-shareholder, or resident-director requirement for either the UAB or MB structure — a foreigner can own and direct 100% of the company alone.
- For solo consultants or freelancers, the MB structure (no mandatory minimum capital, no mandatory director) is often faster and cheaper to set up than a UAB, and can be converted into a UAB later if the business grows.
- The registry's own processing time (often just a few business days) is rarely the real bottleneck — non-resident bank KYC for the mandatory share-capital deposit account is usually what actually stretches the timeline.
- New qualifying small companies can benefit from a 0% corporate income tax rate for their first two tax periods, dropping to 7% afterward for companies under the small-taxpayer revenue threshold — a meaningful early-stage saving worth factoring into cost planning, though tax details should be confirmed with an accountant rather than a formation agency's marketing page.
- Total formation cost varies enormously depending on whether you do it yourself, use a budget formation agency, or use a full-service law firm — get at least two quotes before committing.
- The 0% and 7% CIT rates are genuinely open to 100% foreign-owned Lithuanian companies — there is no separate, worse tax regime for foreign shareholders, only added complexity around withholding tax on cross-border dividend/interest/royalty payments.
- If you're a non-EU/EFTA national without a Lithuanian residence permit, you cannot register as a sole proprietor under individuali veikla — many foreigners in this position default straight to forming a UAB or MB instead.
- Don't assume a new UAB automatically gets the 0%/7% small-company rate — it depends on staying under the revenue and employee thresholds and on shareholder structure, so it's worth confirming eligibility with a local accountant before counting on it in your financial plan.
- CIT and VAT are separate taxes with separate thresholds and filing systems — confusing the two is a common mistake foreign founders make when first registering in Lithuania.
Filing Obligations Company
- Cit Return
- Annual CIT return filed electronically, generally due by 15 June following a calendar tax year, with final payment due the same day (a different accounting period is possible with approval).
- Registered Office Requirement
- Every UAB must maintain a registered address in Lithuania; foreigners without local premises commonly use a paid registered-address/contact-person service.
VAT
- Standard Rate
- 21% standard VAT rate, unchanged for most goods/services in 2026.
- Registration Threshold
- €45,000
- Note
- Mandatory VAT registration once annual turnover exceeds the threshold; businesses selling cross-border to EU B2C customers can use the VAT One Stop Shop (OSS) via a Lithuanian UAB for simplified multi-country VAT compliance.
Structure Options For A Foreigner
Individuali veikla (Individual Activity Certificate)
- VAT
- Only required to register for VAT once turnover exceeds the EUR 45,000 threshold, or earlier if the activity/clients require it.
- Taxation
- Profit (not gross income) is taxed under Lithuania's personal income tax scale for individual activity: broadly 5% up to a lower profit threshold, rising progressively to 20% in a middle band, and merging into the general 20-32% progressive personal tax bands above roughly EUR 42,500 in profit. Expenses can be deducted either as actual documented costs or a flat 30% allowance without receipts.
- Bookkeeping
- Must keep a simple income-and-expenditure journal; no minimum capital is required.
- Legal Basis
- Registered directly with the State Tax Inspectorate (VMI), commonly via the Mano VMI online portal; can be used for any activity not prohibited by law and does not expire.
- Who Its For
- The default, most flexible self-employment route for freelancers, consultants, and remote/IT professionals — no legal entity is formed.
- Social Contributions
- Mandatory Sodra social insurance (VSD) and health insurance (PSD) contributions apply to self-employed individuals regardless of income level.
- Foreigner Eligibility
- Non-EU/EFTA nationals must hold a valid temporary or permanent Lithuanian residence permit to register as a sole proprietor under this regime — it is not available on a tourist/visa-free stay alone.
Verslo liudijimas (Business Licence / fixed-tax patent)
- Caveat
- If income under this licence exceeds EUR 45,000 in a year, income must still be declared and personal income tax paid on the excess.
- Taxation
- A fixed tax amount set by the local municipality is paid upfront regardless of actual income; valid for up to one calendar year and must be renewed.
- Who Its For
- A narrower alternative for specific listed activities only (e.g. small-scale retail, crafts) — not generally suitable for consulting, IT, or professional services work most nomads do.
UAB (Uždaroji Akcinė Bendrovė – Private Limited Company)
- Governance
- Requires formal Articles of Association (or an Act of Establishment for a single founder) and, depending on size, formal management/board structures.
- Who Its For
- The standard choice for foreigners wanting limited liability, credibility with clients/investors, the ability to hire staff, or to scale beyond solo freelancing.
- Foreign Ownership
- Lithuanian law imposes no requirement for a local shareholder or resident director — a foreign individual or foreign legal entity can be the sole shareholder and director.
- Registration Speed
- Electronic filing with the State Enterprise Centre of Registers is processed in roughly 3 business days; end-to-end setup (including notarization, KYC, and bank account) typically takes 1-2 weeks when using a formation agent.
- Minimum Share Capital
- €1,000
- Capital Paid Before Registration
- €250
- Registered Address Service Annual
- €600
- Typical Formation Cost Via Law Firm
- €2,100
- Capital Note
- Only 25% of minimum capital must be deposited before registration; the remainder is due within 12 months of incorporation. The capital belongs to the company and can be used for operating costs — it is not a government fee.
MB (Mažoji bendrija – Small Partnership)
- Governance
- Simpler management than a UAB; no requirement for a board or formal shareholder meetings, and members can manage operations directly.
- Who Its For
- A middle-ground option between individuali veikla and a UAB — offers limited liability without the capital requirement or formal board obligations of a UAB.
- Typical Users
- Often chosen locally for consultancy, creative businesses, or small online shops where a solo or small-team owner wants liability protection without full UAB overhead.
- Capital Requirement
- None — no minimum share or paid-in capital required, unlike a UAB.
Incorporation Process And Requirements
- Overview
- Lithuania is consistently described as one of the more foreigner-friendly EU jurisdictions for company formation, with fully remote incorporation possible via power of attorney and no requirement to ever visit the country.
Timeline
- Biggest Variable
- Opening the mandatory temporary bank/EMI account for the share capital deposit is frequently flagged as the least predictable step, since banks run extended KYC checks on non-resident founders that can add unpredictable delay beyond the registry's own turnaround.
- Realistic End To End
- Sources vary: agencies commonly cite 3–7 business days for straightforward document-ready remote cases, up to 1–3 weeks when notarization, translations, and bank KYC are factored in, and some full-service law-firm-assisted routes quote 2–3 weeks from signing a Power of Attorney to receiving final registration documents.
- Registry Processing Only
- Once a complete file is submitted, Registrų centras itself typically processes a standard UAB application within about 3 business days.
Typical Cost
- Share Capital Uab
- €1,000
This is not a fee — it becomes the company's own working capital and stays with the business; at least 25% must be paid in before registration.
- State Registration Fee
- €31
Official fee charged by the State Enterprise Centre of Registers for a private limited company (UAB) filing; the same fee applies whether the founder is an individual or a legal entity. Fees for other entity types differ.
- Registered Address Annual
- €600
Indicative annual cost for a registered Vilnius office/contact-person service from one provider; many formation packages instead bundle the registered address into the one-time setup fee.
- Full Service Law Firm High End
- €2,100
Higher end quoted by some full-service law firms for a complete remote UAB registration package, excluding share capital and ongoing accounting.
- DIY Or Agency Assisted All In Low End
- €650
Lower end of typical all-in formation-agency packages (state fees + notary + registered address, excluding share capital), based on several formation-agency quotes.
Official Registry
- Name
- State Enterprise Centre of Registers (Registrų centras), operating under the Ministry of Justice
Common Entity Types
UAB (Uždaroji Akcinė Bendrovė) — Private Limited Liability Company
- Who Its For
- The most widely used structure; most foreign founders planning to scale, raise investment, or bring in corporate shareholders choose this form.
- Shareholders
- Single shareholder up to 249; can be natural persons or legal entities.
- Capital Payment Rule
- At least 25% of the minimum capital (around €250) must be deposited into a temporary bank/EMI account before registration completes; the remaining balance is payable within 12 months of incorporation.
- Director Requirement
- A formally appointed director is required, but the owner can serve as director themselves; no residency requirement for the director.
- Minimum Share Capital
- €1,000
MB (Mažoji Bendrija) — Small Partnership
- Who Its For
- Lightweight structure aimed at freelancers, solopreneurs, and small service businesses.
- Shareholders
- Up to 10 members, all must be natural persons (no legal-entity shareholders).
- Minimum Share Capital
- €1.00
- Notes
- No mandatory minimum capital and no mandatory director role — members can manage the business directly. Can be converted into a UAB later without dissolving and re-registering.
Step By Step Process
- 1. Reserve a unique company name through Registrų centras (name checked against the Register of Legal Entities; reservation typically valid for several months).
- 2. Draft the Articles of Association setting out company name, form, capital, business activity, registered office, and shareholding structure.
- 3. Secure a registered legal address in Lithuania (a rented office, serviced office, or compliant virtual office is acceptable) — this is mandatory for every company.
- 4. Open a temporary 'accumulation' bank or EMI account and deposit the required portion of share capital (for a UAB, at least 25%); obtain a bank certificate confirming the deposit.
- 5. Notarize the incorporation documents — a notarized signature is required even where an electronic ID/e-signature is used; non-residents typically grant a Power of Attorney to a local representative or law firm so they never need to appear in person.
- 6. Submit the full application (Articles of Association, shareholder/director/beneficial-owner details, proof of capital deposit, registered address proof) to Registrų centras.
- 7. Once registered, apply for tax registration with the State Tax Inspectorate (VMI) and, if applicable, VAT registration; convert the temporary account into a full operating corporate bank account.
- 8. Register beneficial ownership information via the JANGIS system as required for AML compliance.
Post Incorporation Requirements
- Tax registration with the State Tax Inspectorate (VMI) is required shortly after company registration.
- VAT registration becomes mandatory once turnover exceeds €45,000 in a rolling 12-month period for resident businesses; non-resident sellers generally have no threshold and must register from the first taxable Lithuanian supply unless an EU simplification regime applies.
- Every registered company, including dormant ones, must file an annual report with Registrų centras, and a separate annual corporate income tax return with VMI.
- Certain regulated activities (fintech, crypto, transport/logistics, gambling) require additional sector-specific licenses (e.g., from the Bank of Lithuania or the Lithuanian Transport Safety Administration) on top of standard UAB registration.
Local Partner Or Sponsor Requirement
- Status
- Not required
- Details
- Lithuanian law does not require the involvement of a local partner, imposes no restrictions based on the founder's nationality, and permits a fully foreign ownership structure. A foreign individual or foreign company can be the founder, sole owner, and sole director of a Lithuanian UAB, and the director may also be a non-resident.
Corporate Income Tax Cit
- Standard Rate
- 17% from 1 January 2026 (raised from 16%), applying to taxable profits of most Lithuanian-registered companies and to profits attributable to a foreign company's permanent establishment in Lithuania.
- Startup Zero Rate
- 0% CIT for the first two tax periods for qualifying newly registered small companies meeting the same size/revenue conditions; the separate employee-count cap for this 0% holiday was removed in the 2026 reform.
- Small Company Reduced Rate
- 7% from 1 January 2026 (raised from 6%) for companies with fewer than 10 employees and annual gross revenue under a set threshold.
- Tax Base
- Lithuanian tax-resident companies are taxed on worldwide income; non-resident companies (and foreign companies operating without a local entity) are generally taxed only on Lithuania-sourced income or income attributable to a Lithuanian permanent establishment.
- Eligibility Caveat
- The reduced 7%/0% rates are conditional, not automatic — shareholder structure matters too (e.g. an anti-fragmentation rule limits a small taxpayer's shareholders from holding over 50% in another qualifying small company), so a new UAB should not assume it automatically qualifies.
- Foreign Ownership Neutrality
- A Lithuanian company owned entirely by foreign shareholders is taxed under the same CIT rules and rates as a domestically owned one; foreign ownership does not create a separate regime, though cross-border dividend, interest, and royalty payments can trigger withholding tax subject to double-tax treaty relief.
- Small Company Revenue Threshold
- €300,000
Practical Freelancer Vs Company Takeaway
For a foreign remote worker or solo consultant already holding Lithuanian residency, individuali veikla is the fastest, lowest-cost, and most tax-efficient route at moderate income levels since profit-based rates start low. Once revenue grows, hiring is needed, or clients/investors expect a formal corporate entity, forming a UAB (or the lighter-weight MB) adds limited liability and can access the 0%/7% small-company CIT rates, but brings share-capital, bookkeeping, and annual filing obligations that individuali veikla does not have.
AI-generated estimateData refreshed July 2026
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Data last updated July 2026 · Verify anything important.