Lithuania has become one of the most practical European jurisdictions for entrepreneurs who want to establish an EU company without facing unnecessarily high entry costs or complicated corporate bureaucracy. The country combines a modern digital infrastructure, competitive taxation, access to the European Single Market and company structures suitable for both small owner-managed businesses and larger international ventures.
For anyone researching the reasons to open the company in Lithuania, the most important advantage is flexibility. A Lithuanian company can be fully owned by a foreign individual or a foreign legal entity. In many cases, the incorporation process can be completed remotely, without the founder travelling to Lithuania. Once established, the company can trade throughout the European Union, employ staff, register for VAT, open business accounts and work with customers internationally.
Lithuania was ranked 11th globally in the World Bank’s final Doing Business study, although that publication has since been discontinued. More importantly for today’s founders, Lithuania continues to offer fast company registration, a minimum UAB share capital of only €1,000 and a reduced corporate income tax regime for qualifying small companies.
This guide explains everything a foreign entrepreneur should understand before registering a company in Lithuania: available legal structures, UAB and MB differences, remote incorporation, taxation, registration documents, banking, accounting, VAT, ongoing compliance, timelines and realistic costs.
Why Consider Company Formation in Lithuania?
Lithuania is a member of the European Union, the Eurozone and the Schengen Area. A Lithuanian company therefore operates within the EU legal and commercial framework and uses the euro as its official currency. This makes the country particularly attractive to e-commerce businesses, consultants, agencies, software companies, logistics operators, online service providers and international founders who need a credible European business presence.
The incorporation system is relatively efficient. A complete registration application can often be processed by the Register of Legal Entities within several working days, although the total time required depends on the ownership structure, signing method, registered address, translations and whether a bank or payment account must be arranged.
Foreigners are generally permitted to own 100% of a Lithuanian company. There is no general requirement for a Lithuanian citizen or resident to hold shares on behalf of the foreign founder. However, company ownership and immigration status are separate matters. Registering a Lithuanian company does not automatically give its owner the right to live in Lithuania.
The country is also attractive from a tax perspective. From 2026, the standard corporate income tax rate is 17%, while qualifying companies with annual revenue not exceeding €300,000 may apply a reduced 7% rate. A newly registered qualifying small company may apply a 0% rate during its first two tax periods, provided that all statutory conditions are met. Detailed and updated information can be found in the Lithuanian Tax Inspectorate’s explanation of the 2026 corporate income tax changes.
What Type of Company Can You Register in Lithuania?
Lithuania offers several forms of legal entity, but most foreign entrepreneurs choose between a UAB and an MB. Both provide limited liability, but they differ substantially in ownership rules, governance, share capital and suitability for future investment.
UAB – Private Limited Liability Company
A UAB is the Lithuanian equivalent of a private limited company. It is the standard choice for founders who want a conventional corporate structure with shareholders, shares and an appointed director.
The UAB is suitable for trading companies, international businesses, agencies, e-commerce operations, technology companies, logistics businesses and ventures that may later bring in investors. It is also usually the more practical structure when another company will hold the shares.
The minimum authorised share capital is €1,000. This capital is not a government fee or a payment to the formation provider. It belongs to the company and, after registration, may generally be used for legitimate company expenses and business operations.
A UAB may be established by one or more founders. Founders and shareholders can be individuals or legal entities, including foreign companies. Under the current rules, the number of UAB shareholders is not limited. This is an important distinction from older information that still appears on some websites and refers to a maximum of 249 or 250 shareholders.
Every UAB must have a formally appointed head of the company, normally referred to as the director. The shareholder and director may be the same person. A foreign person may also be appointed, although the director’s actual working arrangements, remuneration, tax position and social insurance obligations must be structured correctly.
A UAB is a limited liability legal entity. As a general principle, shareholders do not use their personal assets to satisfy the company’s obligations. However, limited liability does not protect a shareholder or director from the consequences of fraud, unlawful conduct, unfair actions or personal guarantees.
Shares in a UAB can be sold, gifted, inherited or otherwise transferred in accordance with the law and the company’s articles of association. This gives a UAB a clearer and more familiar ownership structure than an MB, especially when the business is expected to grow or attract investment.
The official Lithuanian Innovation Agency confirms that a UAB requires at least €1,000 of share capital, can be established by individuals or legal entities and may have an unlimited number of shareholders. More information is available through its official guide to Lithuanian business forms.
MB – Small Partnership
An MB is a limited liability structure designed primarily for small businesses and closely held operations. It is popular among freelancers, consultants, online entrepreneurs, agencies and founders who want to start without forming share capital.
Unlike a UAB, an MB has no statutory minimum share capital. Members normally make contributions, but the size and payment procedure for those contributions are decided internally. This makes the MB financially accessible at the beginning.
An MB may have between one and ten members. All members must be natural persons. A company or another legal entity cannot become an MB member. This restriction is one of the most important reasons why founders expecting corporate investment often choose a UAB instead.
The MB can be governed directly by its members or can have an appointed manager, depending on the governance model selected in its founding documents. A separate manager is not mandatory in every MB structure. This can make internal governance simpler for a small owner-managed business.
An MB is also a limited liability legal entity. Its members are generally not personally responsible for the MB’s debts solely because they are members. Nevertheless, the same exceptions relating to unlawful conduct, personal guarantees and bad-faith actions may apply.
The official Lithuanian Innovation Agency information on small partnerships confirms that an MB may have no more than ten individual members, does not require minimum share capital and can be established by a single person.
An MB is not necessarily a permanent choice. If the company becomes too large for the structure, needs corporate shareholders or wants a more investment-friendly ownership model, it can be converted into a UAB.
Other Business Structures Available in Lithuania
A public limited liability company, known as an AB, is intended for larger ventures and businesses that may offer shares publicly. Its minimum authorised capital is €25,000. Because it has more extensive governance and reporting requirements, it is rarely the right structure for a small foreign-owned business. The current capital requirements are established by the Lithuanian Law on Companies.
A foreign company may also establish a Lithuanian branch. A branch can carry out commercial activity, but it is not a separate legal entity from the foreign parent company. The parent therefore remains responsible for the branch’s obligations.
A representative office is more limited. It may represent the foreign company, promote its interests and perform supporting functions, but it cannot normally carry out independent commercial activities in the same way as a branch or subsidiary.
Other structures exist, including individual enterprises, general partnerships, limited partnerships, public institutions and associations. However, these forms are intended for more specific situations and are not normally the first choice for international commercial operations.
UAB or MB: Which Structure Is Better?
The right choice depends less on which company is cheaper to register and more on how the business will be owned, managed and developed.
An MB is often the most efficient starting point for a solo consultant, freelancer, small agency or online business owned by one or several individuals. There is no mandatory share capital, internal management can be flexible and the initial administrative burden may be lighter.
A UAB is generally more suitable when the company will have corporate shareholders, plans to attract investors, expects ownership to change regularly or wants a conventional share-based structure. International partners, investment funds and larger customers may also be more familiar with the private limited company model.
The €1,000 UAB capital requirement should not be treated as a registration expense. It remains the company’s money. Therefore, founders should not choose an MB merely to avoid losing €1,000, because the UAB capital can be used for genuine company expenses after incorporation.
The taxation of an MB and UAB at company level is broadly comparable. Both may be subject to the standard, reduced or initial 0% corporate income tax rate if the relevant conditions are satisfied. The more significant tax differences arise when owners withdraw money, receive remuneration, enter into management arrangements or distribute profits. Those decisions should be reviewed with an accountant rather than based only on the legal form.
As a practical rule, an MB is often appropriate for a lean business owned exclusively by individuals. A UAB is usually the stronger long-term structure for a company that expects investment, corporate ownership, substantial hiring or international expansion.
Registering a Lithuanian Company With Professional Assistance
Foreign founders do not have to manage the entire registration process themselves. A local formation provider can prepare the documents, arrange a registered address, coordinate signatures, communicate with the notary and Register of Legal Entities, and assist with the post-registration steps.
Through BalticIncorp’s company formation service in Lithuania, international clients can arrange MB or UAB registration, a Lithuanian company address, document preparation, ownership transfer, banking assistance, VAT registration and ongoing accounting support.
The process can usually be handled remotely. The founder provides the required personal and business information, confirms the desired company structure and signs the necessary documents. Where a power of attorney is required, it may need to be notarised, legalised or certified with an Apostille, depending on the country in which it is signed.
A dedicated local representative can also help identify problems before the application reaches the Register. Common issues include an unsuitable company name, missing address consent, incorrectly legalised foreign documents, an ownership structure that cannot be used for an MB or a proposed business activity that requires additional licensing.
For an alternative explanation of the incorporation process, documents, taxation and available legal entities, see the detailed StartBusiness.lt company registration in Lithuania guide.
How to Register a UAB in Lithuania Yourself
A founder who has the appropriate electronic signature, understands the Lithuanian forms and has access to a registered office may establish a UAB independently. The exact procedure depends on whether the company is formed electronically using standard documents or through a Lithuanian notary.
The official Centre of Registers company formation e-guide explains the legal entity registration procedure and the available company forms.
Step 1: Choose and Reserve the Company Name
The proposed name must be distinguishable from existing legal entity names and should not infringe registered trademarks. The name must also comply with Lithuanian naming and language requirements.
A temporary name reservation can be made with the Register of Legal Entities, generally using the JAR-5 procedure. Once accepted, the name is reserved for six months. A reservation is useful when the remaining documents will not be submitted immediately.
Before deciding on a name, founders should check the Register of Legal Entities and relevant trademark databases. Registration of a company name does not automatically give the company unrestricted trademark rights.
Step 2: Confirm the Founders and Ownership Structure
The founders must decide who will own the shares, how many shares will be issued, their nominal value and how voting rights will be distributed.
A UAB can have a single founder or multiple founders. Each founder may be a natural person or legal entity. If a foreign company will be a shareholder, an official extract confirming its existence, registration details and authorised representative will usually be required.
Foreign corporate documents may need to be translated into Lithuanian and certified. Depending on the country of origin and applicable international agreements, legalisation or an Apostille may also be necessary.
Step 3: Obtain a Lithuanian Registered Address
Every Lithuanian company must have an official registered office in Lithuania. The address is recorded in the Register of Legal Entities and is used for formal correspondence.
If the premises do not belong to the company or founder, the owner must consent to the use of the address. Where several people own the property, consent may be required from all relevant owners.
A registration address is included when a company is established through StartBusiness.lt or BalticIncorp. This can be especially useful for foreign founders who do not own or rent premises in Lithuania.
Step 4: Prepare the Incorporation Documents
A company with one founder uses an incorporation act. Where there are two or more founders, an incorporation agreement is prepared.
The document identifies the founders, proposed company name, registered address, authorised capital, number and value of shares, capital payment procedure and the person authorised to act during the formation process.
The articles of association must also be prepared. They establish the company’s internal legal framework, including its governing bodies, representation rules, shareholder decision-making procedures, share capital and other essential matters.
Standard electronic templates may be sufficient for a straightforward company. More complex ownership, voting or investor arrangements may require customised articles and a shareholders’ agreement.
Step 5: Open an Accumulative Account and Pay the Share Capital
A UAB must have authorised capital of at least €1,000. An accumulative account is normally opened for the initial capital payment.
If the authorised capital is exactly €1,000, the entire minimum amount must be paid before registration. When the total capital is higher, the applicable payment rules allow part of the subscribed amount to be paid initially, but the monetary contribution paid before registration cannot fall below the legal minimum. The remaining subscribed amount must be paid within the legally permitted period.
The account used to deposit the initial capital is not necessarily the account the company will use for everyday operations. After registration, the company can choose an appropriate bank or payment service provider and transfer or use the capital for legitimate business purposes.
Opening the capital account may be one of the more time-consuming parts of a foreign-owned UAB formation. Financial institutions perform their own identification, sanctions, anti-money laundering and business model checks. Registration of the company does not guarantee that every bank will accept the client.
Step 6: Appoint the Director
Every UAB must have an appointed director. The director represents the company, signs contracts and is responsible for organising its operations within the limits imposed by law, the articles and shareholder decisions.
A foreign shareholder may appoint themselves as director. However, the company must separately consider how the director will be remunerated, where the work will be performed and whether employment, personal income tax or social insurance obligations arise.
Step 7: Sign and Authenticate the Documents
A straightforward UAB may be registered electronically when all necessary conditions are satisfied and the participants can use accepted qualified electronic signatures.
A notary is generally involved when the electronic route is unavailable, the documents are customised, foreign parties use powers of attorney or the structure cannot be registered using the standard electronic templates.
The notary reviews the documents, verifies the parties or their authorised representatives, confirms legal compliance and checks evidence relating to the registered address and share capital.
Step 8: Submit the Application to the Register of Legal Entities
Once the documents are complete and properly signed, the application is submitted to the Centre of Registers.
A correct application can normally be processed within approximately three working days. The company then receives its legal entity code and becomes an officially registered Lithuanian legal entity.
The three-day period applies to the Register’s examination of a complete application. It does not include the time required to collect foreign documents, arrange translations, open an accumulative account, obtain signatures or resolve deficiencies.
How to Register an MB in Lithuania
The MB formation process is similar but does not require an accumulative account or statutory share capital.
The founder first selects and, if necessary, reserves the company name. A Lithuanian registered address and the property owner’s consent must then be obtained.
A single founder signs an incorporation act, while several founders conclude an incorporation agreement. The MB regulations must define its management model, member rights, contributions, voting procedures and representation arrangements.
The founders must decide whether the MB will be managed only through its members’ meeting or whether a separate manager will be appointed. This choice should be made carefully because it affects how the MB enters into contracts and deals with banks, institutions and third parties.
An MB may be registered electronically through the Centre of Registers when the statutory requirements are satisfied. A notarial or representative-based route may be required in other cases.
Following incorporation, information about the MB’s members must be submitted to the JADIS participant information system within the applicable deadline. Beneficial ownership data must also be reported through JANGIS.
Can Foreigners Register a Company in Lithuania Remotely?
Yes. In many cases, a foreign founder can complete company formation in Lithuania without travelling to the country.
One possible route is registration through an authorised local representative. The founder signs a power of attorney permitting the representative to prepare, sign or submit the relevant documents within the powers granted.
The power of attorney may require notarisation, legalisation or an Apostille. It may also need to be translated into Lithuanian by an authorised translator. The correct formalities depend on the country where it is signed and the relevant international agreements.
Electronic registration may be possible where every required person has an electronic signature recognised by the Lithuanian systems and all other conditions for online formation are fulfilled. Foreign electronic signatures are not automatically accepted in every situation, so their compatibility should be checked before relying on this route.
A third option is purchasing a newly established ready-made company. The company already exists and the transaction involves transferring its ownership and, where necessary, replacing the director, address or company name. A clean shelf company can reduce the time spent on initial incorporation, but proper checks should still confirm that it has no debts, contracts, employees, tax liabilities or previous activity.
Remote registration does not mean that every subsequent service is automatically remote. A bank may request a video interview, additional evidence or, in some cases, an in-person visit. VAT registration may require contracts, invoices, explanations of the business model and proof of genuine planned economic activity.
Do Foreign Founders Need a Lithuanian Residence Permit?
A foreigner does not normally need a Lithuanian residence permit merely to own shares in an MB or UAB. Non-residents can own and manage Lithuanian companies, subject to the applicable company, employment, sanctions and immigration rules.
However, ownership of a company does not itself give the owner permission to reside in Lithuania or elsewhere in the Schengen Area. Company registration and immigration are separate legal procedures.
A non-EU founder may potentially qualify for a Lithuanian temporary residence permit through genuine business activity, but the requirements are substantially higher than simply opening a company. Under one of the business activity routes, the company must generally have operated genuinely in Lithuania for at least six months, meet employment and salary requirements, have equity of at least €28,000 and include at least €14,000 invested by the foreign applicant. Ownership or management conditions also apply.
Immigration rules change and applications are examined individually. Founders considering relocation should verify the current conditions through the Lithuanian Migration Department before making investments based on residence permit expectations.
Taxes After Company Formation in Lithuania
Incorporation is only the beginning of the tax relationship between the company and Lithuania. The exact obligations depend on revenue, profit, customers, employees, owner remuneration, cross-border transactions and VAT status.
Corporate Income Tax
Corporate income tax is calculated on taxable profit, not on the company’s total sales revenue. Allowable business expenses are deducted from taxable income, subject to Lithuanian tax rules.
From 2026, the standard Lithuanian corporate income tax rate is 17%.
A reduced 7% rate may apply where the company’s revenue for the tax period does not exceed €300,000 and the company satisfies the remaining statutory conditions. From 2026, the number of employees is no longer used as a general eligibility limit for this reduced rate. Older articles referring to a maximum of ten employees describe the rules that applied before the 2026 changes.
Qualifying newly registered small companies may apply a 0% corporate income tax rate to taxable profit during their first two tax periods. This benefit is not automatic. Conditions apply to the company’s revenue, participants, related entities, ownership changes, restructuring, liquidation and continuation of business during the relevant period.
For example, the 0% regime generally requires the participants to be natural persons and imposes restrictions on suspending activity, liquidation, reorganisation and transferring ownership during the first three consecutive tax periods. A company should therefore confirm eligibility before treating the first two years as tax-free.
The official VMI guidance on corporate income tax from 2026 should be checked before preparing forecasts or filing a tax return.
Value Added Tax
The standard Lithuanian VAT rate is 21%. From 2026, Lithuania also applies reduced rates of 12% and 5% to specific goods and services, as well as a 0% rate in qualifying situations such as certain exports and international transactions. The applicable category must be checked rather than assumed. Current rates and qualifying supplies are explained on the official VMI VAT rates page.
VAT registration generally becomes mandatory when the value of relevant goods and services supplied in Lithuania exceeds €45,000 during the previous or current calendar year. Since May 2025, this threshold has been assessed by reference to calendar years rather than a rolling 12-month period. The Lithuanian Tax Inspectorate explains the €45,000 VAT threshold in more detail.
The €45,000 threshold is not the only event that can create a VAT obligation. Registration or VAT reporting may be required earlier when a company acquires services from foreign taxable persons, provides certain cross-border EU services or purchases goods from other EU member states above the applicable threshold.
Voluntary VAT registration is possible before reaching €45,000. It may be useful for companies selling to VAT-registered businesses, importing goods, making substantial business purchases or providing cross-border services. Nevertheless, voluntary registration also brings invoicing, reporting and record-keeping responsibilities.
VAT registration is not always granted solely because a company requests it. VMI may ask for customer or supplier contracts, a description of planned activity, bank statements, invoices, employment information, website details or other evidence that the business is genuine.
Taxation of Dividends
Dividends paid by a Lithuanian company to an individual are generally subject to 15% personal income tax in Lithuania. According to the official VMI explanation of dividend taxation, dividends remain taxed at 15% regardless of their amount and are not added to the income tested against the higher general personal income tax bands.
The shareholder’s country of tax residence may also tax the income or require it to be declared. A double taxation agreement may determine which country can tax the dividend and whether foreign tax can be credited.
Dividends paid to another company are governed by different corporate income tax rules. In some cases, an exemption may apply where the receiving company has held at least 10% of the distributing company for an uninterrupted period of at least 12 months and the remaining conditions are satisfied. Payments to foreign entities may otherwise be subject to the applicable corporate tax withholding rate, adjusted where a treaty or EU rule applies.
Lithuania has concluded double taxation agreements with numerous countries. The official list is maintained by the Lithuanian Ministry of Finance.
Employment and Director Taxes
If a UAB employs staff, it must calculate salary-related personal income tax and social insurance contributions, submit payroll declarations and pay the relevant amounts within the required deadlines.
A UAB must have a director, and the director’s legal relationship with the company should be documented correctly. The tax consequences depend on where the director is resident, where the work is performed and how remuneration is paid.
An MB has more flexible options for member and manager remuneration, but those options have different personal income tax and social insurance consequences. Money transferred from an MB to its member is not automatically a tax-free withdrawal. It must have a valid legal and accounting basis.
Why International Founders Choose Lithuania
A Lithuanian company provides a recognised legal presence within the European Union. This can simplify contracting with European customers, obtaining an EU VAT number, working with European suppliers and operating through international payment service providers.
Lithuania’s company structures are also relatively accessible. An MB has no statutory minimum share capital, while the UAB minimum is only €1,000. Both provide limited liability and can be used for a broad range of lawful activities.
The tax regime can be particularly competitive for genuine small companies. A qualifying business may benefit from 0% corporate income tax during its first two tax periods and 7% thereafter while its annual revenue remains within the €300,000 threshold and all other conditions continue to be satisfied.
Company registration can frequently be completed remotely. This makes Lithuania practical for founders who need an EU entity but do not plan to relocate immediately.
Lithuania also has a well-developed fintech ecosystem, a skilled multilingual workforce and strong capabilities in technology, finance, logistics, shared services and digital business. However, founders should select the country because it supports their real operating model, not merely because of one tax rate.
How Long Does Company Formation in Lithuania Take?
The official registration stage can be completed within approximately three working days after the Register of Legal Entities receives a correct and complete application.
The total process usually takes longer because incorporation involves several preparatory stages. The company name, documents, address consent, capital account, signatures, translations and foreign founder documentation must be arranged before the application can be approved.
A standard MB or UAB formation managed locally commonly takes around five to ten working days. A more complex remote formation involving a notarised power of attorney, Apostille, translation and international delivery may require seven to fourteen working days.
Purchasing a ready-made company can sometimes be completed within two to five working days, provided that the ownership transfer documents are ready and no bank, licensing or compliance issue delays the transaction.
A branch of a foreign company may require approximately two to three weeks because documents relating to the parent company, its authorised representatives and the decision to establish the branch must be collected, translated and authenticated.
Bank account opening and VAT registration should be treated as separate processes. The company may already be legally registered while its bank or VAT application remains under review.
What Must Be Done After Registration?
A newly registered company is not automatically ready for every type of commercial activity. Several post-registration obligations must be completed.
The company should arrange an operational bank or payment account. The most suitable institution depends on the founder’s residence, expected transaction volume, currencies, customers, business model and countries involved. A regulated fintech account may work for one company, while another may need a traditional Lithuanian bank.
Accounting should be organised from the beginning, even if the company has not yet issued an invoice. The accountant must record capital contributions, registration expenses, bank transactions, shareholder financing, invoices and contracts correctly.
If the company must or wishes to become VAT registered, the application should be prepared with evidence of planned economic activity. Cross-border businesses should also determine whether EU VAT reporting, OSS, Intrastat, i.SAF or other obligations apply.
Information about company participants must be filed through JADIS where required. The company must also disclose its ultimate beneficial owners through JANGIS. The Centre of Registers provides an official JANGIS beneficial owner reporting service.
Licences must be obtained before commencing regulated activities. Company registration alone does not authorise banking, payment services, financial services, passenger or freight transport, employment agency work, gambling, alcohol trading or other licensed operations.
Annual financial statements must be prepared, approved and submitted to the Register of Legal Entities. Tax returns and other declarations must also be filed, including during periods when the company has little or no activity.
How Much Does Company Formation in Lithuania Cost?
The total cost depends on the legal form, ownership structure, registration method and complexity of the foreign documents.
Self-registration involves Register of Legal Entities fees, a possible company name reservation fee and, where applicable, notary expenses. A foreign founder may also need to pay for document certification, Apostille, translation, courier delivery, a power of attorney and a Lithuanian registered address.
An MB does not require statutory share capital. A UAB requires at least €1,000, but this remains company property and should not be confused with a registration fee.
Professional company formation through StartBusiness.lt costs €750 for an MB and €1,400 for a UAB. These service prices include government registration fees and a Lithuanian company registration address. The UAB’s statutory €1,000 share capital is arranged separately because it belongs to the newly established company.
Ready-made companies are priced individually. The cost may depend on the company’s legal form, age, capital, VAT status, licences, bank account and whether it has previously carried out activity. A company with a genuine operating history requires significantly more due diligence than a new shelf company.
Ongoing costs should also be considered. These can include accounting, payroll, VAT declarations, annual financial statements, registered address services, banking fees, legal support and licences. A company that costs little to establish can still become expensive if its accounting or regulatory structure is chosen incorrectly.
Common Mistakes During Lithuanian Company Formation
One frequent mistake is choosing an MB only because it has no minimum share capital. If the business later needs a corporate investor or foreign parent company, the MB ownership restrictions can become an obstacle.
Another mistake is assuming that a 0% corporate tax rate applies automatically. The relief has specific eligibility and continuity conditions. A change of shareholders or reorganisation during the relevant period can affect the company’s entitlement.
Foreign founders also underestimate bank compliance. A legally registered company is not guaranteed a bank account. The founder should be prepared to explain the company’s customers, suppliers, transaction countries, expected turnover, source of funds and commercial purpose.
Using a borrowed or unreliable registered address can also cause problems. The company must be able to receive official correspondence, and the address owner must provide valid consent.
VAT is another common source of errors. Some founders wait for €45,000 of turnover without realising that receiving services from a foreign business or entering into EU transactions may create earlier obligations.
Finally, company ownership should never be treated as equivalent to immigration permission. A founder planning to relocate must evaluate residence permit conditions independently and should not register a company solely because someone has promised automatic Schengen residence.
Conclusion
Company formation in Lithuania offers a strong combination of affordable entry, limited liability, EU market access, competitive taxation and remote registration possibilities.
The MB is generally best suited to small businesses owned exclusively by individuals. It has no statutory minimum capital and can operate with a flexible management structure. The UAB requires €1,000 of capital but offers unrestricted shareholder numbers, corporate ownership and a structure better suited to investors and long-term growth.
Registration itself can be completed quickly, but successful incorporation requires more than receiving a company code. The founders must also arrange the company address, bank account, accounting, beneficial ownership disclosure, tax registrations and any activity-specific licences.
Frequently Asked Questions About Company Formation Lithuania
Can a foreigner own 100% of a Lithuanian company?
Yes. A foreign individual can generally own 100% of a Lithuanian UAB or MB. Foreign legal entities may own UAB shares but cannot become members of an MB, because MB membership is limited to natural persons.
Do I need to visit Lithuania to register a company?
Not necessarily. Many companies can be registered remotely using accepted electronic signatures or a properly certified power of attorney. The exact procedure depends on the founders, company form, country of residence and documents involved.
What is the minimum capital required?
An MB has no statutory minimum share capital. A UAB requires authorised capital of at least €1,000. An AB requires at least €25,000.
How many shareholders can a UAB have?
The number of UAB shareholders is currently unlimited. Shareholders may be individuals or legal entities and can be based outside Lithuania.
How long does company formation in Lithuania take?
A straightforward registration normally takes approximately five to ten working days from the beginning of document preparation. The Register itself can process a complete application within around three working days. Complex foreign ownership, translations, powers of attorney or banking arrangements can extend the timeline.
What corporate income tax rate applies in Lithuania?
The standard rate is 17% from 2026. Qualifying companies with annual revenue not exceeding €300,000 may apply a 7% rate. Newly established qualifying companies may apply a 0% rate during their first two tax periods. The employee-count limitation previously used for the reduced rate was removed from 2026.
Is the 0% corporate tax rate automatic?
No. The company must meet all statutory conditions. These include requirements relating to annual revenue, participants, related entities, ownership changes, reorganisation, liquidation and continuation of activity.
When is VAT registration mandatory?
The principal domestic threshold is €45,000 of relevant Lithuanian supplies during the previous or current calendar year. Other transactions, including certain purchases of foreign services and EU cross-border activities, can create VAT obligations before that threshold is reached.
Can I register voluntarily for VAT?
Yes. Voluntary VAT registration may be appropriate for B2B companies, importers, exporters and businesses with significant VAT-bearing expenses. VMI may request contracts and other evidence demonstrating real planned activity.
Can I obtain a residence permit by opening a company?
Opening a company alone is not sufficient. Business-based immigration routes require genuine activity and may involve company age, equity, investment, ownership, employment and salary conditions. The application is assessed separately by the Migration Department.
What must a company do after registration?
The company must organise accounting, arrange an operational account, report participants and beneficial owners, evaluate VAT obligations, obtain necessary licences and submit annual financial statements and tax declarations.
Can an MB later become a UAB?
Yes. An MB can be converted into a UAB if the business needs a share-based structure, corporate shareholders, investment or a more conventional governance model.
This article provides general information and does not replace individual legal, tax, accounting or immigration advice.