Company registration in Lithuania
Which legal form to choose?
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.
Other available legal forms of companies
- Sole proprietorship (IĮ) – a legal entity with unlimited liability;
- Private Limited Company (UAB) – the most popular form of legal entity with limited liability;
- Public limited company (AB) – a legal entity with limited liability;
- Full economic partnership (TŪB);
- Limited partnership (KŪB);
- Small company (MB) – a legal entity with limited liability;
- Representative office of a foreign company – not a legal entity;
- Branch office – not a legal entity.
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 turnoever, 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 higly 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.
The most popular forms of legal entities in Lithuania and their main differences in 2018
|Legal form||Liability||Number of owners||Minimum authorized sharecapital||Management bodies|
|LTD||Limited civil liability||1-249 shareholders||2'500,- EUR||Director or optional board of directors|
|IE||Unlimited civil liability||1 sole owner||Undetermined. There is no minimum set.||IE owner is also a director of the company, although, other person can also be appointed for this position.|
|PLC||Limited civil liability||Number of shareholders is unlimited||40'000,- EUR||Director, also there could be an executive body, which is the board|
|LLP||Limited civil liability||1-10 members||undetermined (amount of contributions is determined by the members of LLP)||Meeting of members (there should be ao appointed representative)
Sole governing body (director)
Reasons to open a company in Lithuania
Have a question? Feel free to Contact with us