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Lithuania

Steps to Set Up a Company:

Lithuania

Choose a Business Structure

  1. Sole Proprietorship (Individuali įmonė - IĮ): Single owner, full liability.
  2. General Partnership (Tikroji ūkinė bendrija - TŪB): Two or more partners, shared liability.
  3. Limited Partnership (Komanditinė ūkinė bendrija - KŪB): General and limited partners.
  4. Private Limited Liability Company (Uždaroji akcinė bendrovė - UAB): Separate legal entity, limited liability.
  5. Public Limited Liability Company (Akcinė bendrovė - AB): Separate legal entity, limited liability, shares can be traded publicly.
  6. Branch (Filialas): A branch of a foreign company operating in Lithuania.
  7. Representative Office (Atstovybė): Limited to marketing and promotional activities, cannot conduct business transactions.

Register Your Company

  1. Choose a Company Name: Ensure it is unique and follows naming regulations.
  2. Prepare the Articles of Association: Outlining the company’s structure and rules.
  3. Open a Bank Account: Deposit the initial capital required for the company type.
  4. Register with the Centre of Registers: Submit the incorporation documents and pay the registration fee.
  5. Obtain a Tax Identification Number (TIN) from the State Tax Inspectorate (Valstybinė mokesčių inspekcija - VMI): For tax purposes.
  6. Register for Value Added Tax (VAT) with VMI: If applicable.

Open a Lithuanian Bank Account

  1. Set Up a Business Bank Account: Necessary for managing business finances.

Obtain Necessary Licenses and Permits

  1. Check Industry-Specific Requirements: Depending on the nature of your business, you may need specific licenses or permits.

Comply with Lithuanian Employment Laws

  1. Employment Contracts: Draft contracts that comply with Lithuanian labor laws.
  2. Register with the State Social Insurance Fund Board (Valstybinio socialinio draudimo fondo valdyba - SODRA): For social security purposes.
  3. Health and Safety Regulations: Follow guidelines from the State Labour Inspectorate.

Accounting and Reporting

  1. Set Up an Accounting System: Maintain accurate financial records in compliance with Lithuanian accounting standards.
  2. Annual Financial Statements: Prepare and file annual financial statements.
  3. File Annual Tax Returns: Submit annual tax returns to the State Tax Inspectorate.

Laws and Regulations to Consider

Corporate Law

  1. Law on Companies (Akcinių bendrovių įstatymas): Governs the formation and operation of companies.
  2. Civil Code (Civilinis kodeksas): Governs contracts and obligations.

Tax Law

  1. Law on Corporate Income Tax (Pelno mokesčio įstatymas): Governs corporate income taxation.
  2. Value Added Tax (VAT) Law (Pridėtinės vertės mokesčio įstatymas): Governs VAT regulations.

Employment Law

  1. Labour Code (Darbo kodeksas): Governs the terms and conditions of employment contracts.
  2. Law on Social Insurance (Valstybinio socialinio draudimo įstatymas): Governs social security contributions.
  3. Law on Occupational Safety and Health (Darbo saugos ir sveikatos įstatymas): Sets health and safety standards for workplaces.

Data Protection Law

  1. Law on Legal Protection of Personal Data (Asmens duomenų teisinės apsaugos įstatymas): Governs data protection and privacy.

Environmental Law

  1. Law on Environmental Protection (Aplinkos apsaugos įstatymas): Governs environmental protection and sustainability practices.

Intellectual Property Law

  1. Patent Law (Patentų įstatymas): Governs the protection of patents.
  2. Trademark Law (Prekių ženklų įstatymas): Governs the protection of trademarks.
  3. Copyright Law (Autorių teisių ir gretutinių teisių įstatymas): Governs the protection of copyrights.

By following these steps and adhering to the relevant laws and regulations, you can successfully establish and operate a company in Lithuania. It’s advisable to consult with legal and financial experts to ensure full compliance and smooth setup.

When to Consider Setting Up a Company in Lithuania:

  1. Strategic Geographic Location: Lithuania’s location provides access to markets in the Baltic States, Northern Europe, and the European Union.
  2. Favorable Tax Regime: Lithuania offers a competitive tax regime and various tax incentives for businesses.
  3. Stable Political and Economic Environment: Lithuania provides a stable political and economic environment conducive to business operations.
  4. Skilled Workforce: Access to a highly educated and skilled labor pool, particularly in technology, engineering, and services.
  5. Developed Infrastructure: Lithuania has a well-developed infrastructure, including transportation, telecommunications, and financial services.
  6. Innovation and Technology: Lithuania has a focus on innovation and technology, with government support for tech initiatives.
  7. Quality of Life: Lithuania offers a high standard of living, excellent healthcare, and a vibrant cultural scene, making it attractive for expatriates and international employees.
  8. Access to EU Market: As an EU member state, Lithuania provides access to the EU single market, facilitating trade and business operations within the EU.

By considering these factors and aligning them with your business goals, you can determine if setting up a company in Lithuania is the right move for your organization.

DALL·E 2024-07-08 12.02.10 - An illustration promoting Grant and Grahams global support for setting up companies. The image features a globe with various business icons around it
How to Set Up a Company

Step-by-Step Guide: How to set up a Company

Setting up a company involves a series of crucial steps that require careful planning and execution. From choosing the right business structure to understanding legal and tax obligations, each stage is vital to the successful launch and operation of your business. This step-by-step guide provides a comprehensive overview of the key processes involved in establishing a company, ensuring you have the knowledge and tools needed to navigate the complexities of business formation.