To date, private limited company is the most popular form of legal entity. It is a legal entity with limited liability, i.e. the company is responsible to the creditors only with the property of the company. The process of registration of the company does not take much time and does not require large authorized capital. The company is quite simple to operate (as it does not require presence of the board) and is flexible in making important decisions.
The individual enterprise can be an alternative for conducting small business, but unlimited liability is a serious disadvantage. For the same reason (the existence of unlimited liability for some members), full and limited partnerships do not seem to be very attractive. Public limited company though has a limited liability, but is used mainly for larger companies as it requires substantial funds for formation of the authorized capital and a more complex management structure. Small company is a relatively new legal form of the companies in Lithuania. It is a legal entity with limited liability. Although the creation of such a company does not require the authorized capital, the founder of the company can only be individuals; bookkeeping is easier than in private limited company only in some cases.
Representative office of a foreign company
Registration of representative office of a foreign company gives to the entrepreneur a very limited ability to do business, because the representative office may not engage in commercial activities, but rather performs some other functions. However, in certain cases, registration of a representative office is justified for tax reasons. In contrast to the representative office, the branch may conduct business but it is not a separate legal entity. However, before you register the branch you should consider the nuances of taxation carefully. Therefore, before you open a company in Lithuania, you must weigh all of the above mentioned aspects.
Private limited company
For all the above reasons, foreign businessmen often open a private limited company. One of the most important steps in the process of registration of a company is the choice of areas of activity of the company. A license may be required for conducting of certain activities in Lithuania. Therefore, this issue should be worked out in advance. You also need to decide who will be the founders of the company. In order to open a private limited company, it is enough to have one natural or legal person, but anyway not more than 250 shareholders. The authorized capital of the private limited company is 2 500 euros. This amount will be available for operation immediately after the registration of the company documents.
It should be noted that the director of the company could only be a natural person. Thus, foreign nationals may be directors and shareholders with no restrictions.
Procedure of registration
Once the entrepreneur has decided on the legal form of the company and the field of activity, in order to open a company in Lithuania, it is necessary to reserve the name of the company and prepare the following documents:
If the founder is a legal entity there must be the notarized decision of the Board, the Board of Directors, the director or the shareholders meeting to open a company as a private limited company translated into the Lithuanian language;
Copies of the notarized certificate of registration and the founder’s Articles of Association, the document about the right to represent the legal entity translated into the Lithuanian language;
Notarial power of attorney for the right to sign the founding act (the contract), the Articles of Association and registration forms if the founder is not willing to come to the Lithuanian notary himself;
Options for the established company name. Company name should be written in Latin letters and comply with the legal and linguistic standards of Lithuania. It is advisable to prepare several options and consult on compliance of the name with the State Commission of the Lithuanian Language. The chosen name should be reserved in the Register of Legal Entities;
The Articles of Association of the company. The requirements to the Articles of Association are prescribed in the Law of the Republic of Lithuania on Companies. In addition to other information, the Articles of Association should specify the activities of the company;
Decision on legal address in Lithuania. The company is not required to be, or to operate at that address; however, for the registration of business at the said address, a written consent of the owner of premises is required. The company may use a different address for its business, but it is necessary to notify thereof by special form;
Specify the name, surname, personal identity number (if any), passport number, address of the future director of the private company and attach a copy of his passport;
Specify the shareholder’s name, its address and registration number. If individuals are involved indicate their name, personal identity number (if any), passport number, address;
Make a founding act (the contract) as it is prescribed by law.
Open a savings account in the bank for the authorized capital.
Complete and sign the necessary forms for the registration of the company in the Register of Legal Entities.
The documents must be certified by the notary in accordance to the established procedure and passed to the Register of Legal Entities.
More details to be aware of during registration procedure
The founding documents are received and issued by the Register of Legal Entities only in the national language; so, the documents should be prepared in the Lithuanian language. However, if necessary, the documents may be translated into any other language. Moreover, the documents can be written initially in two languages.
The founder can also arrange the documents himself; however, without adequate experience the process may be delayed. Therefore, if you decide to open a company in Lithuania it is advisable to turn to experienced professionals that will help to avoid possible problems and will finalize the whole procedure in a week’s time. You will only need to sign prepared documents and to present the necessary information for filling in various forms with the Register of Legal Entities.
On the other hand, in order to avoid the procedure of registration of the new company you can contact us and buy a ready-made Lithuanian company with a minimum share capital and a bank account. In case of acquisition of a shelf company in Lithuania a contract of sale of shares is executed, then you can start using the ready-made company. The company is acquired with its founding documents. This method of starting business is faster, but it is little bit more expensive. However, if necessary, you may need to change the name of the company or to increase the share capital, or to perform other transformations. All these procedures are not difficult and can be carried out by our specialists in a relatively short time. It is for an entrepreneur to decide whether to open a new company or to buy a ready-made company in Lithuania.
After registration or acquisition of a new company, you can begin to work and dispose of funds on the account of the company and enter into the transactions. Then, you should think about registering the company as a VAT payer, hiring of employees, preparation of employment contracts and other internal documents of the company. However, you can also entrust all these questions to professionals who will provide you with support after the opening of the company in Lithuania.
Thus, the company can be opened quickly and inexpensively. If you take into account all the nuances of business in Lithuania, the company will open up new prospective and stimulate your further development.
How the procedure will look like?
1 You send us documents and the required information (copy of passport, your email, address, telephone number) by email email@example.com (it will take several minutes) to prepare a contract.
2 The Client pays an advance payment of 50% of total amount to initiate the process (it will take 1-3 days until the payment will be cleared in our bank account) (up to 3 days)
3 We prepare necessary documents for the Client to sign within a week or faster and send them by email (up to 7 days)
4 Then the Client prints out our arranged and provided documents pursuant to the instruction, then signs name and signature where needed, and sends back to us by a fast post courier (it will take 7 working days until documents arrives).
5 After we receive the documents, it takes about a week to arrange a full package of documents to the Client (up to 7 days) of company registration in Lithuania.
6 Further, when the documents are created and ready, we scan company registration in Lithuania certificate and send to the Client by email address. Follow that the Client have to pay remaining payment of 50% of total amount.
7 In the next stem client pays the rest of sum. It could take up to 3 days to get money, that depends on sender and receiver bank.
8 Finally, we do send out all arranged documents to the Client by express courier. Normally it takes up to 3 working days.
We are always more than happy whenever we can assist a newcomer to Lithuania. We really know how hard it is to enter a new market and that you need only the best support and most professional and honest consultants at the beginning. By starting a company registration procedure there are always many external factors that you need to be aware about. Average salary rates, different taxation for each individual business type, recruitment possibilities, office selection and many more things has to be taken into consideration while setting up a company in Lithuania. If you want setup things in a right way at the very first time, then you should look no further and contact us asking for assistance or at least a good advice!