Company incorporation in Lithuania

 

The most common form of a business presence in Lithuania is a limited liability company [UAB].

 

The minimum share capital required to establish a limited liability company is LTL 10 000 (EUR 2899) which shall be paid before a company registration with the Commercial register when the company bank account is opened. Limited Liability Company [UAB] may be founded by natural person as well as legal person (company).

 

 

. Company formation cost including bank account and VAT registration


State fee for registering UAB (private limited liability company) is 198LTL (57, 4 EUR). State fee does not include notary fees that may vary from 350 LTL (102 EUR) to 800 LTL (232EUR). There is no state fee for registering as VAT payers in Lithuania. In order to open company's bank account the cost slightly varies on the particular bank. In case if company is incorporated by legal person (company) there might be additional costs for translation services (approx 16 EUR/page).

 

The registration takes 3 business days from the submission of documents at local authorities and the all-included state fee range is from 290 EUR to 580 EUR.

 

 

. Legal address


Please do note that it is necessary to indicate the legal address of the company. Therefore the registration at particular premises in Lithuania is necessary as the initial step. For your convenience we may offer to use our firm’s legal address in Vilnius.

 

 

. Procedure of incorporation


The initial step is to conclude the act of establishment of the company;

Temporary bank account is opened and an initial contribution for the subscribed shares is paid. The amount of the initial contributions must be at least LTL 10,000 (2899EUR);

The articles of association of the company are drawn up and approved by the notary and the necessary management bodies in the company are appointed;

The company is deemed to have been established upon registration thereof with the Register of Legal Entities.

All the documents must be submitted to Center of Registers in Lithuanian language. According to local laws, the translation of documents can be made only by the certified translator. Approximate cost for one page translation is 16 EUR/page; Approximate cost for the translation of Company setup documents is 1000LTL (290EUR).

 

 

. Required Documents and Information

 

The list of the main documents and information for company incorporation in Lithuania are:

  1. Data on the company director and the board members (names, surnames, identification numbers, dates of birth, residence addresses and passports copies); Data on the establisher of the company (in case if the establisher is the legal person (company) - extract from Center of Registers on the company;
  2. Legal address of the company in Lithuania;
  3. Information on the Bank preferences;
  4. Act of Establishment;
  5. Articles of Association;
  6. Establishers Decision;
  7. Certificate from the bank which proves that the initial share capital of LTL 10000 (EUR 2899) have been paid.

Also please be informed that the availability of the name of the legal entity must be checked prior to registration.

 

 

. Taxation in Lithuania


 

Rates, costs

Short explanations

VAT

The standard rate is 21%, the reduced rates 9% and 5% (in some cases)

The taxable period is one calendar month.

Corporate income tax

The standard rate -15%. For micro companies - 5% (average number of pay-roll workers less than 10 persons, income of taxable period does not exceed 1 million LTL.).

Taxable profit = Income received during the tax period - Not taxable income - Allowed deduction (including limited size deduction)

Dividend tax

15%

for legal persons (unless the participation exemption applies)

20%

for private persons

Personal income tax

The standard rate -15%, 20% to income from distributed profit

 

Social security contributions

3%

helth insurance - employee's contribution

6%

health insurance - employer's contribution

between  30,98% -31,7%

employer's contribution (depending on the risk group)

Real property tax

from 0,3 % to 1% till Dec 31st, 2012 (0,3% - 3% from Jan 1st, 2013)

depends on the municipality

Representative Offices in Lithuania

 

Representative offices or any other organizations registered in Lithuania are governed by the law of the Republic of Lithuania.

 

Representative office of a legal person is a unit of a legal person, which has its registered office, enjoy the right to perform all operations specified below.

 

Representative office of a legal person shall have the right to represent the interests of a legal person and safeguard them, to enter into contracts as well as perform other operations in legal person's name, to conduct import and export operations exclusively between foreign legal persons and other organisations, which have established the branch office or related enterprises, institutions or organisations and the branch office. Representative office of a legal person is not a legal person.

Upon registration of a representative office a foreign legal person or other organisation must notify the Register of legal persons about the alterations of legal person's documents and data filed with the Register as well as about the legal status of a legal person.

 

Before the application for registration of the representative office of foreign legal entities is submitted to the Administrator of the Register, the civil law notary must verify the correctness of the particulars entered into the application, the compliance of the statutes with the statutory requirements and the fact that the representative office of foreign legal entities is eligible for registration.

 

 

  Main Documentation:

  •  Information on the Representative (passport copy, residence address);
  • An establishment document of the founder, the instrument of incorporation and the statutes, if these are different documents and amendments thereto;
  • Legal Address of the Representative Office in Lithuania;
  • Copy of the certificate registration of the founder or an extract from the register where the founder's file is stored (Legalized or with Apostle);
  • State fee payment of 200 LTL (58 EUR). The registration is normally completed within 3 business days from submission of documents to the local Center of Registers.

 

   Power of attorney for tax registration in Lithuania in English

For questions, please, contact Valters Gencs, attorney at law at info@gencs.eu


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The material contained here is not to be construed as legal advice or opinion.

© Gencs Valters Law Firm, 2014