Company registration, purchase in Lithuania

The most popular forms of legal entities (companies) in Lithuania, and their differences.

The most popular and the most common registered legal entities (companies) in Lithuania are:

Private Company Limited by Shares (LTD)

Individual Enterprise (IE)

Public Limited Company (PLC);

Other.

Since September 1, 2012, in Lithuania, it is allowed to establish a new form of a legal entity, which is Limited Liability Partnership (LLP).

The following table compares the legal entities.

* Limited civil liability: it means that participants (shareholders, owners, or members) with their assets are not liable for the obligations of a legal entity (company).

** Unlimited civil liability: it means that if there is insufficient amount of assets to fulfill the obligations of a legal entity (company), a participant (owner) is liable for company’s obligations, and pays with his/her own assets.

Establishment of a company.Steps, expenditures, and terms.

The main stepsof establishing a company:

1. Selection and reservation of a company’s name;

2. Preparation of establishment documents;

3. Formation of the authorized capital, opening a saving account in a bank (when needed);

4. Provision of the establishment documents for the notary’s confirmation;

5. Provision of notary’s confirmed establishment documents to the Registry of Legal Entities.

Certain forms of enterprises can be established via internet, if the founder has qualified electronic signature and if other necessary conditions determined by the law are fulfilled.

Term for establishing a company: 5 - 10 working days and more.

Purchase of a company. Steps, expenditures, and terms.

The main steps of selling-purchasing a company:

1. Agreement. Preparation of documents;

2. Paying for shares;

3. Signing sale-purchase documents of the company;

4. Registration of sale-purchase documents at the Registry of Legal Entities.

Expenditures of selling-purchasing a company: about 750 euros. 

Term for selling-purchasing a company: 5 - 10 working days and more.

Taxes and minimum costs for maintaining a company

The main taxes in Lithuania:

* The tax should be calculated, declared, and paid by an employer.

** If the average number of employees in the list is up to 10 people, and income of taxing period does not exceed 1 million Litas.

Monthly minimal costs for maintenance of a company:

1. Mandatory monthly taxes (indicated in the table above);

2. Employees’ wages;

3. An accountant: around 100 Euro or 950 Euro per year (when needed);

4. Office rent: by agreement (when needed).

Are there any restrictions for foreigners in order to establish or buy a company in Lithuania?

Foreigners, who want to establish or buy a company in Lithuania, have the same rights as the citizens of Lithuania, and there are no specific restrictions applied.

When establishing or buying a company in Lithuania, does a founder/buyer has to participate directly, and does he/she has to come to Lithuania?

A company can be established, and changes, related to the transaction of company’s sale-purchase, have to be registered at the Registry of Legal Entities on the basis of appropriate form of authorization, i.e. without direct participation of the founder/buyer.

The right of a foreigner, who established or bought a company in Lithuania, to be and/or live in Lithuania.

A foreigner, who has a company in Lithuania, has the right to come and be in Lithuania on the basis of visa, if he/she does not exceed a period of time indicated in the visa.

A foreigner, who legally operates in Lithuania and whose staying in Lithuania is required in order to achieve company’s aims and do business, can acquire a permit of temporary residence in Lithuania on the basis of business matters. 

A temporary residence permit: it is a document granting a foreigner the right to live in Lithuania for a temporary period of time, which is indicated. A foreigner has the right to choose a place of residence in Lithuania, change it, leave from Lithuania, and come back if temporary residence permit is still valid. A foreigner, who has the permit of temporary residence in Lithuania, can travel to the Schengen countries, and be there up to 3 months. A person, who leaves Lithuania for more than 6 months, must declare his/her departure. 

A temporary residence in Lithuania permit is issued to a foreigner, who is not a citizen of a European Union Member State. It is usually issued for one year.