Business

Company Registration in Lithuania

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Company Registration in Lithuania: How to Start A Business in Lithuania?

As an invaluable member of the European Union, Organisation for Economic Co-operation and Development, and Euro Area, Lithuania presents limitless money-making opportunities for businesses and entrepreneurs alike.  The stability of its economy is only matched by its budding start-ups ecosystem. Its support for the free movement of people, services, goods and capital, and its positive image make it a desirable destination for visitors and investors. Even during the on-going pandemic, the following dynamics were spotted in Lithuania:

  1. Value of exports exceeded the value of imports;
  2. Great balancing of government budget;
  3. Thriving real estate market;
  4. Sharp rise in foreign company registration.

Supposing a resilient economy, business owners can work with the speed of light to activate new possibilities within their organizations. Let’s continue to examine the key economic benefits of this country.

Fiscal Advantages of Lithuania

When discussing Lithuania, it’s impossible not to list several key benefits stemming from the country’s fiscal achievements over the years. The benefits include:

  • Low inflation rates. Last year, the average inflation rate amounted to approximately 1.06% compared to the year before that.
  • The Gross Domestic Product (GDP) was worth over $55.8 billion in 2020.
  • Country’s monthly minimum wage is approximately $759.

It is necessary to note that foreigners that completed the process of Lithuania company registration are able to reap the same economic benefits as the citizens. This type of support helps explain why this country is so exceedingly popular amongst businesspeople from all over the globe.

Company Formation – Background

Lithuanian Civil Code governs civil, commercial, and family law. According to it, all businesses must attain a valid legal status. Before you decide to launch a business in this country, it’s pivotal for you to figure out which type of company you want to launch.

At the time of writing, there are four main types of Lithuanian companies and they include:

  1. Private company (UAB);
  2. Public limited liability company (AB);
  3. General (TŪB) or limited partnership (KŪB);
  4. Branch office or representative office.

A public limited liability company is very similar to an LLC or a joint-stock company. The State Enterprise Centre of Registers (SECR) is the entity that is in charge of most processes that deal with Lithuania company registration.

Main Stages of Lithuanian Company Establishment

Typically, the first stage of this process is the client scheduling a consultation with a firm that specializes in launching businesses in Lithuania. The services offered by such firms can differ vastly, but their key responsibilities are usually the same: providing you with a complete overview of business opportunities in the country, ensuring that you’re aware of all the guidelines related to foreign company registration, etc.

The second stage encompasses the gathering of the paperwork required for submission to the SECR. In our estimation, this stage should not take more than one week. The last stage is the submission of the documents. It can be done remotely and it can be done in person, depending on the type of company.

Company formation online in Lithuania is a very straightforward process that is every bit as uncomplicated as advertised. Still, some difficulties might arise in the process (for instance, the SECR may request an in-person interview with one of the members of the board of directors). It is important to let the professionals handle all the business registration procedures. By the way, another possible difficulty is the extension of time it takes to obtain the SECR registration certificate. In the best-case scenario, this step can be completed within 7-10 days, but if companies refuse outside help they might run into some trouble.

Ongoing Costs of a Business in Lithuania

Whilst owning a business after successfully undergoing the process of new company registration online in EU (Lithuania) is not going to cost you anything, there are some operating costs to be aware of. While your project is still in stasis (i.e. there’s no staff, no transactions, no place to rent) there are no on-going expenses at all. Once you finally launch your operations, there will be more than a few costs to keep in mind.

Just to give you a ballpark figure on how cheap it is to run a company in Lithuania, we’ve listed the following costs:

  • ~$380 taxes from minimal salary of $759 per month;
  • $170 for small commercial property paid every month;
  • $17 for a secure, fast internet connection and landline;
  • $115 for account services paid every month.

All of the above amounts to $682. Company formation online in Lithuania is beginning to sound even more appealing now, right?

Company Liquidation – How to Wind Up Your Own Company?

Same as new company registration online in EU (Lithuania), this process is very simple. Your business can be put on ice or liquidated completely remotely as well.