Many entrepreneurs from Russia and CIS countries dream of starting business in the EU, since registration of the company in the EU is the way to the new market and a big step on the road to development. Lithuania stands out among many European countries. Therefore, experts advise to think about opening a company in Lithuania.
Why to choose Lithuania for business? There are many reasons to do this. Lithuanian companies are often used for trade, development of manufacturing, international transportation, and other activities in Europe. They are popular due to the low costs of accounting and administration, low taxes and favourable geographical position. The Lithuanian government has an active policy of support for business and makes emphasis on creation of new jobs. This means that Lithuania is waiting for those who will work for export; consider Lithuania as a “springboard” to enter the European market and those who is planning to expand the market with Lithuanian specialists.
The geographical location and tax benefits
First of all, it is convenient to register and do business in Lithuania. Registration of the company in Lithuania is a very quick process that does not require significant financial and time costs. Moreover, in Lithuania, you are unlikely to encounter a language barrier; the policy of four languages here is welcome: you are likely to be understood in Lithuanian, Russian, English, often also in Polish.
In Lithuania, there is a possibility to register a small business, for which a tax of 5% is applicable. Lithuania has also concluded agreements with many countries on avoiding of double taxation; therefore, subject to certain conditions, there is a possibility of payment of dividends without tax in almost any jurisdiction;
Moreover, opening of a business in Lithuania is favourable geographically. Due to convenient geographical location of Lithuania, it would be much easier for you to get to anywhere in Europe. Lithuania is a member of the Schengen agreement and has open borders with all the EU countries; this means you can deliver goods without any long registration of all necessary documents. A well-developed infrastructure of Lithuania and its strategic location allow ever-growing relationship between the EU and CIS countries. There are two international transport corridors in Lithuania: North-South and East-West. There are four international airports, a railway connecting Europe with the Scandinavian countries, the ice-free seaport.
In addition, by opening a company in Lithuania you get a clear advantage as compared with your competitors and ability to reach a new level of development. The status of a European company will help to attract new customers. It should also be noted that Lithuania is a country with low taxes, relatively inexpensive labour, low price level and no exchange controls.
Thus, the income tax is 5% or 15%, tax on dividends is 0 – 15% , VAT (value added tax) – 21%.
Technological and economic development of the country
It is not a secret that Lithuania makes extensive use of new technologies, greatly simplifying the work of entrepreneurs. The country is proud of the world’s fastest public Wi-Fi and very high speed of broadband connection. You can easily make international transfers in foreign currency through online banking.
The mechanism for relations with state structures is also convenient because the technology came in the state sector of Lithuania. Therefore, the majority of public services are available online and are used by 99% of businesses. Lithuania ranks first in Europe in the use of public online services. Thus, all of the reports, returns and other documents may be filed electronically.
It should also be noted that Lithuania is one of the leaders in the ranking of the world’s freest economies on the ease of starting a business, as well as one of the leaders in Europe according to the index of investment attractiveness. Therefore, international companies operating in the field of IT, medicine, financial services, and manufacturing register their offices in Lithuania.
However, Lithuania is not going to stop there. Today, the Lithuanian government talks about a start-up visa for entrepreneurs from other countries who want to do business in Lithuania. There are similar examples in France and the Netherlands. In the future, the entrepreneurs who want to start business in Lithuania will get recommendation and collect other necessary documents much easier. The idea of creating zones with a flexible tax system in Vilnius should also be borne in mind.
Thus, Lithuania is a convenient and inexpensive jurisdiction to register and to do business with good development prospects.