What is a company in Lithuania?
A company is a legally incorporated business entity; it is a legal body or collection of persons organised to participate in commercial, industrial, or professional activity and sell or offer goods or services to the general public. A company has separate rights, obligations, and liabilities from its stockholders.
Typically, forming a corporation entails company registration in Lithuania with the necessary authorities and complying with local rules and regulations. The formation of a company requires deciding on its organisational structure, ownership, management, and objectives. It also entails paying taxes, maintaining accurate records, and completing all required documentation on time.
BIZBON aim is to make company registration in Lithuania much easier! If you are interested in doing business in Lithuania, we will assist you with your business establishment here by providing a full package of company registration services that would be even possible without your personal presence in the office.
By choosing our services for your company registration in Lithuania, we will help you to save your valuable time and money. Many entrepreneurs are seeking to expand their field of activities and to enter new markets or optimize taxes. There are many reasons for choosing Lithuania as an attractive country for business registration.
In Lithuania, the word "company" refers to a legal entity founded for commercial reasons. In Lithuania, following are the types of companies:
● In Lithuania, the most common company form is a UAB, or Uždaroji akcinė bendrovė, which is the equivalent of a private limited liability corporation in other countries. Apart from its investors, it has its own legal personality, and its assets may be confiscated to fulfil its obligations. Investors are solely responsible for the amount of their original investment in shares.
● AB (Akcinė bendrovė) means "limited liability company." It is quite similar to a UAB, but there are certain additional requirements, such as a 25,000 euros minimum share capital, public share offers, and the establishment of a supervisory board in addition to the management board.
● MB (Mažoji bendrija) is a kind of partnership in which one or more people manage a business jointly. It requires at least one members who are jointly and severally liable for the partnership's obligations. There is no minimum share capital requirement for MB.
● IĮ (Individuali įmonė): IĮ is a sole proprietorship in which one individual does business under their name. The individual's personal assets will be utilised to satisfy any corporate debts.
How to choose the right legal form of the company?
Public Limited Liability Company (AB)
In the Lithuania company register, the majority of large and medium-sized firms in Lithuania are structured as public limited liability corporations. It must have a minimum registered capital of 25000 EUR. A bank account must have at least 25% of the requisite registered capital. The general public is permitted to acquire or swap shares of the company's capital. The owner/founder does not have to be a resident of the Republic of Lithuania.
Limited liability safeguards both the company and its shareholders from being held accountable for more than the value of their investment in the company. The founders and shareholders of a public limited liability company are not personally liable for the firm's debts or obligations.
Private Limited Liability Company (UAB)
The majority of small foreign investors in the Republic of Lithuania set up a private company. With as little as €2,500 in registered capital, a limited liability company may be founded. A bank account must have at least 25% of the requisite registered capital as per Lithuania company register.
A private limited liability in Lithuania company register may have one or more founders (shareholders). The owner does not have to be a resident of the Republic of Lithuania. A limited liability company (LLC) is a legally separate entity. The company's and its investors' responsibility is restricted. If the following conditions hold on the final day of the fiscal year, an audit of the previous year's financial statements is required: the company's net sales wee EUR 3.5 million, its total assets were EUR 1.8 million, and the usual number of people on the payroll was 50 people per year.
A subsidiary or representative office
Foreign firms and organisations are permitted to establish representative offices and subsidiaries. A subsidiary of the parent business is a foreign enterprise or organisation having a representative office or branch in the Republic of Lithuania. One of your supervisors should be situated in Lithuania. A branch office or representative office is an extension of a foreign company, not a distinct legal entity.
A branch office is a physical site apart from the main office where the firm conducts some or all of its operations. The branch office may do business within the parameters established by the parent firm.
A branch of a company or other legal entity that may act in its name and on its behalf is known as a representative office. A representative office, although it may promote and market, cannot do business on its own. The parent foreign Company is fully responsible for any debts incurred by the representative office or branch office.
BIZBON aim is to make company registration in Lithuania much easier!
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 shelf 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.
Procedure for company registration in Lithuania:
The following processes must be followed for company registration in Lithuania (in the Lithuania company register):
● Choose the Type of Business. The first step for company registration in Lithuania requires choosing the sort of company you want to start. In Lithuania, the most popular types are UAB (Uždaroji akcinė bendrovė) - a private limited liability company - The small community (MB) - a legal entity with limited liability;
● Choose a name that is distinctive to your company. Check to see if it complies with Lithuanian law's requirements for name registration and is not already in use by another company.
● Articles of Association: Created the Articles of Association, which outline the company's operations, share capital, management structure, and other essential information. This document must be validated.
● Determine the needed share capital for the business type you've chosen. The capital for investing must be put in a bank account.
● Account with a Bank: For company registration in Lithuania, Opening a business bank account and depositing the needed share capital is important.
● Registered Office: Set up a registered office in Lithuania for your firm. This is the address to which all communications and legal papers will be addressed.
● Determine the management structure of the organization, including the appointment of directors or a board of directors.
● Notary Services: A notary is not usually required for business registration processes, however, with the expertise of Bizbon in business establishment services if notary is required, we can get it done without any hassle. Bizbon on your side, you need not worry about any legal process or step to be undertaken, Bizbon can complete your company registration with their expertise in this field as per the requirements without/with notary.
● For company registration in Lithuania, preparing the registration application, which contains the company's data, management structure, shareholders, and other essential information, is a must. This request has been submitted to the Legal Entity Register.
● Register of Legal Entities: Submit an application for registration with the Lithuanian Register of Legal Entities (Registrų centras).
● If your company conducts taxable operations, you may be obliged to register for Value-Added tax (VAT) with the State Tax Inspectorate (Valstybinė mokesčių inspekcija). Bizbon has specialized professionals in the field of accounting and they can do everything on your part to make your all the legal obligations are fulfiled.
● Depending on the nature of your company, you may also need to register with other authorities or organisations, such as the Social Insurance Fund Board (Sodra) for employee insurance or the State Labour Inspectorate (Valstybinė darbo inspekcija) for labour inspection.
It is crucial to note that for company registration in Lithuania, this is a basic overview of the Lithuanian business registration process and that exact criteria and processes may differ depending on your individual circumstances and the sort of company you want to form. The best way to register a business in Lithuania is consulting a legal or business professional, like bizbon, who is familiar with Lithuanian company legislation. Bizbon has a good track record for establishing businesses/companies that are registered for sale with a VAT code, bank accounts and have no debts or other liabilities. Bizbon is an expert at offering these kinds of services and has all the tools and information needed to make sure all legal requirements are met.
Way to obtain company registration in Lithuania:
Online Registration: One of the most feasible to create a company is through online registration. With Bizbon at your service, your presence is not required anywhere you just need to contact us and all the documentation process, time taken etc will be administered by us.
Foreigners from eastern countries like India, Pakistan, Bangladesh, Nigeria etc. may benefit from starting a Lithuanian firm in a variety of ways. Bizbon help to prepare documents for applications of residence permit in Lithuania and all the related documents and service assistance needed to travel to Europe. Lithuania is an attractive destination for entrepreneurs with a clear vision for setting up a business. Lithuania is an attractive destination for business entrepreneurs who have a clear vision of establishing a business.
To begin with, Lithuania expands trade and economic opportunities inside the EU's 450 million-person market. Second, by simplifying registration, reducing red tape, and enhancing efficiency, Lithuania creates a hospitable environment for enterprises. Furthermore, owing to Lithuania's strategic location at Europe's crossroads, Northern and Eastern European markets are more readily accessible. Furthermore, the country's low corporate tax rate, educated workforce, government incentives for new firms, and high quality of living make it an ideal location for overseas entrepreneurs to establish themselves.
The process of company registration in Lithuania consists of several stages
When choosing a legal form for your company, you should pay attention to the objectives pursued by the entrepreneur who is starting a business. In addition of choosing the legal form of the company, you should decide if you are interested in company formation from zero or you are willing to buy an already established business (i.e. business for sale). For your own convenience, our company may accordingly offer you:
- A new from zero established company with your preferred company name and all the necessary internal documentation package (i.e. new company registration and business license if needed);
- An enterprise that has been already established but no business activity has been executed;
- An enterprise that has been already established and had been operating for some time but due to some reasons no business activity is executed now;
A running business for sale that is operating now, has turn over, employees, etc. Choosing this type of company may ensure you steady revenue, a verified business model, also eases you the procedure of getting residence permit and ensures you unrestricted travelling through all the Schengen area in EU. If you still have some question on how to choose the best company according to your needs or you are doubting and looking for some good advice from the professionals, you are always welcome to contact us online as well. Also, we can give you some good advice on the regions and cities in Lithuania where you can start and develop your business. Vilnius as the capital is the most attractive for the foreign people but our country has also some other big cities full of investments and favorable business environment – like Kaunas (the second largest city in Lithuania) or Klaipėda (the third largest city in Lithuania on the Baltic sea coast with a highly developed seaport). No additional cost for starting a business in other city than the capital (Vilnius) is included. Registration process of your business would be also very similar in all the cities in Lithuania. As our company‘s goals are highly oriented to our clients needs we want to do our best to make the business immigration to Lithuania much easier. Therefore, we want to share our knowledge with you and give you some good advice on how to choose the optimal legal form of your company. As you are already familiar with all the possible legal forms of doing business in Lithuania, below there are provided some more detailed information about the them.
How does the Lithuania company registration process will look with BIZBON?
If you are interested in more detailed information – how to start the process, how much time and how much cost the whole company formation process will, below there are listed steps of what you need to know exactly about the whole process:
- The Client sends us documents and the required information (copy of passport, your email, address, telephone number) by email [email protected]
- The client pays an advance payment of 50% of total amount to initiate the process
- We prepare necessary documents for the Client to sign within a week or faster and send them by email
- 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.
- After we receive the documents, it takes about a week to arrange a full package of documents to the Client of company registration in Lithuania.
- Further, when the company documents are ready, we scan the company registration certificate and send it to the Client by email address. Follow that the Client have to pay remaining payment of 50% of total amount.
- In the next step, the client pays the rest of the sum.
- Finally, we do send out all arranged documents to the Client.
- 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 to 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!
Reasons to open a company in Lithuania
Doing business in Lithuania may be attractive and valuable for all the foreigners – for those who are looking how to open up new opportunities and are interested in company formation in this country from zero and for those who want to develop and expand their own existing business. Lithuania business immigration may definitely create an additional solid value to your business. Starting a business in Lithuania is attractive due to these benefits:
European Union membership and geographic location. First, it is useful to have an operating company in Lithuania because the country belongs to EU. Due to convenient geographical location of Lithuania, it is easy to get to anywhere in Europe. Also it enables the country to be active both from the north to the south and from the west to the east directions. Moreover, being a member of EU, country has open borders with all the EU countries and common currency - Euro. It means that by having business in Lithuania you will be able to deliver your products ad services faster - without long procedures of filling all the necessary documents.
Convenience in registering a new company. Second, it is convenient to have a business in Lithuania. Registration or acquisition of the company is very fast and the process is simple because it does not require much money and time. In addition, you will probably not face any language barrier since many people are fluent in English, Russian and often in Polish.
Increasing competitiveness of your business. Third, by opening a new company in Lithuania or buying an existing one, you can achieve a new level of development and become a part of a new larger market. Having a European company will help you to attract new customers and markets, to expand the horizons of your business activity.
New technologies environment. Fifth, in Lithuania there are used many new technologies in order to greatly simplify the entrepreneurs‘ activity. Most government services are available online. Thus, an accountant or another employee may submit all the reports, declarations, applications and other documents electronically. In addition, the country is proud of the fastest public wireless Internet (Wi-Fi) in the world and very high speed of broadband connection. You can easily make international transfers in foreign currency through online banking. In addition, Lithuania belongs to the Single Euro Payments Area, known as SEPA. This is an EU initiative encompassing 34 countries in total that ensures the payments in euro to be executed under harmonized terms – it means that the same payment form and conditions are used for domestic payments (inside Lithuania) and international payments. In order to do the payments generally, you only need connection to the bank and a PIN generator for the code identification.
Favorable economic environment. Moreover, Lithuania ranks 15th place of the most free economies in the world, 11th – on the ease of starting a business, also in the 2nd place in Europe in terms of index of investment attractiveness. 1.5 million of professionals make labor market in Lithuania. It should also be noted that Lithuania ranks first among the countries of Eastern and Central Europe in the number of graduates in mathematics, science and technology per capita and third among the countries of Central and Eastern Europe for the quality of education in mathematics and natural sciences. Programming and information technology, biochemistry, pharmaceuticals, physics, medicine are well developed here. Financial sector is developing fast. In recent years, such world famous companies as Western Union, Barclays, NASDAQ have opened their offices in Lithuania. Thermo Fisher Scientific, Swedish giant IKEA, one of the leading European retailer Lidl are operating successfully here. Therefore, by opening a company in Lithuania means starting a business at a new level corresponding to the highest standards of business conduct.
Based on the above facts, the decision to do business in Lithuania looks very favorable. So, if you have already decided to register a company and start a business in Lithuania, below there are provided some steps and valuable information on what you need to know before the company formation in Lithuania. First of all, you should get familiar with the tax environment for your business in Lithuania: Taxes and expenses maintaining a company in Lithuania 2017 Lithuania business immigration process requires legal form of company to be chosen first. So, you should think about the optimal legal form of the future company. Below there is a list of possible forms of registered companies.
