Registration of Lithuania companies

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Lithuania

GENERAL INFORMATION ABOUT THE JURISDICTION

The Republic of Lithuania is an European state located in the Baltic states. The country has a rapid economic growth and a stable state management system. Despite the fact that Lithuania, comes from the USSR, it managed to achieve all European democratic standards and become the progressive Baltic country with a high level of income.

Moreover, this jurisdiction has created convenient and loyal conditions for the development of foreign business, which is attractive for new investments.

The official currency of the country is the Euro, and the national language is Lithuanian, although many Lithuanians also speak Russian and English.

BENEFITS:

- High confidence in founders of the company.

- Lithuania is a member of the European Union.

- A simple procedure for obtaining a VAT number.

- Freedom of statutory regulation of the structure and activities of companies.

- Ability to register a company and open an account in one jurisdiction.

LEGISLATION:

The activities of Lithuanian companies are regulated by the Civil Code of the Republic of Lithuania (December 2, 2010), the Joint Stock Company Law of the Republic of Lithuania.

LITHUANIA COMPANY REGISTRATION

Types of companies

There are different corporate forms of company registration, although the most common form is Closed Joint-Stock Company (UAB - Uzdaroji Akcine Bendrove).

CLOSED JOINT-STOCK COMPANY:

  • Minimum authorized capital is set at 2,500 EUR and must be formed before the registration of the company.
  • Shares are not issued. The authorized capital is divided into shares of participants.
  • At least one natural person has to act as a director, without residency requirements.
  • At least one individual or legal entity may act as a Shareholder (participant), without residency requirements as well.  The shareholder and director may be one person.
  • There is no availability requirements to secretary.
  • Information about the director and shareholder is open in Lithuania company registry.
  • It is necessary to maintain and submit a financial report every year. Depending on assets, number of employees and turnover, companies must undergo a mandatory audit.
  • A registered office in Lithuania is mandatory.

TAXATION

 

Income tax is 15% (with a preferential 5% if a turnover is less than 300,000 euros/year, in which up to 10 employees are employed, and the shareholders do not own more than 50% of the shares in other companies). The tax is paid with a net profit of the company.

Dividend tax is 15%. If the parent company receives dividends from its subsidiaries that own at least 10% of the shares during 12 months, then such dividends are exempted from taxation (the so-called "substantial participation benefit").

Also, dividends received from a foreign company registered in EU Member State are not taxed.

VAT is 21%. It is necessary to receive VAT in case of purchase of goods worth more than 16 thousand euros from other EU countries or is there is sales worth more than 45 thousand euros over the past 12 months.

The tax rate of social contributions for the employer in the payment of wages is 30.98% of the accrued wages of each employee. Also, the employer has to contribute 0.2% of the accrued salary to the Guarantee Fund.

CURRENCY CONTROL

Not applicable.

TREATIES FOR THE AVOIDANCE OF DOUBLE TAXATION

Lithuania has signed more than 50 treaties for the avoidance of double taxation, including those which are signed with Ukraine.

If you need to register an offshore company in Lithuania, contact our lawyers for advice:

+38 (098) 737-88-88

We will help you buy an “offshore” in Lithuania or company incorporation in any other jurisdiction.