Company Formation in Lithuania

How long does it take to form a company in Lithuania?

Foster the company formation process in Lithuania by working in synergy with LegalBison’s lawyer team.

• 3-5 days for remote registration provided all requirements are intact and completed
• 5-10 days additional for the opening of a bank account
• If everything is in order, the registration process will not take more than 3 weeks

Procedure to prepare the registration of a company in Lithuania

The registration process for a company in Lithuania is very simple. The experts of LegalBison will assist you throughout every step of it:

• Initial consultation and agreement
• Payment of the full invoice
• [IF REMOTELY]: Notarization of POA by client
• Preparation of registration documents
• Document signed at the notary
• Official register validity: immediately

Can I form a company in Lithuania remotely?

Yes, the whole process may be done remotely, and if you opt to act with a representative to prepare everything for you, a Power of Attorney must be issued and apostilled or legalized in Lithuania. The POA must include all authorities from the reservation of the temporary company name. Consider also the following aspects of the procedure:

• Notarization of the founding documents at a registered notary’s office will also be done
• If the documents are issued from or executed in Russia, Ukraine, Belarus, Moldova, Estonia, and Latvia, legalization or certification by Apostille is not required

Necessary information to begin with company formation in Lithuania

The popular legal entity in Lithuania is a private limited liability company and if you choose to incorporate one, the following are needed:

• 3 alternate options for your desired company name ranked from most desired to least desired
• At least one 1 founder or shareholder (Natural or Legal)

Without VAT number in Lithuania

• It is unlikely for legal entities not to be VAT registered since almost all economic activities are charged with VAT (important: B2B payments between two VAT-exempt companies are not more expensive)
• Your company will not have to file monthly tax returns (prerequisite: no one receives a salary), which means low costs

With VAT number in Lithuania

• Your company will be eligible to receive VAT refunds, which means you can make use of the reverse-charge mechanism

Registration for VAT is before the State Tax Inspectorate and takes more or less 10 days

• Legal entities or companies may voluntarily register for VAT but are already required to do so when their annual economic activity turnover exceeds EUR 45.000
• 19% VAT imposed on goods and services
• 9% or 5% on select goods and services
• VAT relief is also possible
• The tax period is a calendar month and payable every 25th day of the subsequent month

Before we help you to apply for a VAT number (in Lithuania 19%) you should carefully think about the advantages and obligations that go along with it.

Required documents to provide to register a company in Lithuania

All business entities must register with the unified Register of Legal Persons (The Registrar), administered by the State Enterprise Centre of Registers.

• Articles of Association, along with the Establishment Act where you will need a Lithuanian business address (required for the company registration documents) and an appointed general manager
• Application for the reservation of a temporary company name (form JAR-5)
• Proof of deposit of the required share capital (minimum of EUR 2,500)
• Passport copies (a scan) of shareholder/s and director/s, also beneficiary owner if applicable

Taxation of companies in Lithuania

The general Corporate Income Tax (CIT) is 15%.

• Companies with 10 or fewer employees or with less than EUR 300,000 in gross annual revenue may seek a lower CIT rate of 5%
• All income derived from local and worldwide activities is taxable

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DTAA signed by Lithuania for companies

Aside from the prevention of tax evasion, Lithuania also wants to give investors legal certainty, hence, it has entered into tax treaties with the following states: Armenia, Austria, Azerbaijan, Belarus, Belgium, Bulgaria, Canada, China, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Greece, Georgia, Germany, Hungary, Iceland, India, Ireland, Israel, Italy, Kazakhstan, Kyrgyz, Korea, Latvia, Luxembourg, Macedonia, Malta, Mexico, Moldova, Netherlands, Norway, Poland, Portugal, Romania, Russia, Serbia, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, Ukraine, United Arab Emirates, United Kingdom of Great Britain and Northern Ireland, USA, Uzbekistan, Turkey, and Turkmenistan.

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Accounting and audit requirements for a company in Lithuania

Lithuania requires that accounting activities shall be done and recorded in EUR denomination and in Lithuanian language and in accordance with International Financial Reporting Standards (IFRS)

All companies, even those with no financial transactions, are required to file their annual report within six months following the closing of the financial year to the Central Commercial Register. This can be done online and shall include the following:

• Management report, balance sheet, income statement, cash flow statement, statement of changes in equity, notes to the annual accounts
• An auditor’s report is required if the company was subjected to an audit (otherwise the annual report will do)

Note: Companies or enterprises must maintain more than 2500 EUR equity and ensure that their capital is at least 50% of the registered shared capital. The moment the aforesaid are not met, the owners or shareholders of the company or enterprise shall either restore their equity capital or proceed to dissolve the company.

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Economic substance and residency requirements for companies in Lithuania

No residency requirement is mandated for any foreign investors (natural or legal person) who wish to incorporate in Lithuania

LegalBison offers help with all of the above requirements. We assist and are local on the ground. Speak now for free with one of our consultants to get your business started.

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