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How to Incorporate a Business in Lithuania: Complete Guide 2026

Last verified: April 2026

Key Takeaways

• Primary Business Form: The most common and recommended legal entity for foreign investors in Lithuania is the Private Limited Liability Company or Uždaroji akcinė bendrovė (UAB).
• Favorable Tax System: Lithuania offers a competitive corporate income tax rate of 16%, with a reduced rate of 6% for small companies. A 0% rate may apply to newly established small companies in their first year.
• Low Capital Requirement: The minimum share capital required to establish a UAB is just €1,000, making it accessible for startups and SMEs to incorporate in Lithuania.
• EU Market Access: As a member of the European Union, a Lithuanian company provides full access to the EU single market, facilitating trade and business operations across the bloc.
• Efficient Registration: The Lithuania company formation process is streamlined and can often be completed within 3-5 business days, especially when utilizing digital registration methods.
• Thriving Fintech Hub: Lithuania is a leading European fintech hub, offering a supportive ecosystem and a wide range of innovative banking and payment solutions.

Why Incorporate in Lithuania?

Lithuania, a dynamic Baltic nation and a member of the European Union, has cultivated a highly attractive environment for international business and investment. Its strategic location, business-friendly policies, and advanced digital infrastructure make it a compelling jurisdiction for entrepreneurs looking to establish a presence in the EU. The government actively promotes foreign investment, particularly in high-growth sectors like fintech, biotechnology, and information technology.

The jurisdiction offers a stable macroeconomic environment, a highly educated and multilingual workforce, and operational costs that are significantly lower than in many Western European countries. For these reasons, Lithuania is not just a gateway to the European market but a robust operational base for a wide range of business activities, from manufacturing and logistics to technology and financial services.

At Incorporator.io, we have helped countless entrepreneurs navigate the Lithuanian business landscape. We have seen firsthand how the country's pro-business attitude and efficient bureaucracy can accelerate growth. The strong emphasis on digitalization means that many administrative tasks can be handled online, saving you time and resources.

Legal Framework & Entity Types

Choosing the right legal entity is a critical first step in the Lithuania business registration process. While several options exist, the vast majority of foreign investors opt for the Uždaroji akcinė bendrovė (UAB), the Lithuanian equivalent of a private limited liability company. Other common forms include the Small Partnership (MB) and branches of foreign companies.

Here is a comparison of the most popular legal entities in Lithuania:

Private Limited Liability Company (UAB)

The UAB is the most popular choice for foreign investors due to its flexibility and the protection it offers. The limited liability structure ensures that your personal assets are separate from the company's debts. This is a crucial consideration for any serious business venture.

A UAB can be established by a single person or multiple shareholders, and 100% foreign ownership is permitted. There are no residency requirements for directors or shareholders, which provides significant flexibility for international entrepreneurs. The UAB is a credible and well-regarded legal form, which can be beneficial when dealing with banks, suppliers, and customers.

Small Partnership (MB)

The MB is a newer and more flexible legal form designed for small businesses and startups. It does not require any minimum share capital, and members can contribute services or know-how instead of cash. This makes it an attractive option for entrepreneurs with limited initial funding.

Like a UAB, an MB offers limited liability protection to its members. However, the governance structure is simpler, with decisions typically made by a meeting of the members. An MB can have between 1 and 10 members, and it is a good choice for small teams, family businesses, and service-based companies.

Branch of a Foreign Company

A branch is not a separate legal entity but an extension of a foreign parent company. The parent company is fully liable for the branch's obligations. This option is suitable for established companies that want to expand their operations into Lithuania without creating a new subsidiary. A branch can engage in commercial activities, but it must have a registered address and a local representative.

Step-by-Step Incorporation Process

The process to incorporate in Lithuania is logical and can be completed efficiently, often remotely with the help of a corporate service provider (CSP) like us at Incorporator.io. We guide our clients through each stage, ensuring a smooth and compliant setup.

1. Reserve the Company Name: The first step is to choose a unique name for your company and reserve it with the Register of Legal Entities. This is done by submitting the JAR-5 form. The name must comply with Lithuanian language standards and cannot be misleading. Once approved, the name is reserved for six months, giving you ample time to complete the incorporation process [1].

2. Prepare Documents: Next, you will need to draft the necessary legal documents. The most important of these is the Articles of Association, which outlines the company's purpose, governance structure, and other key details. If there is more than one founder, an Incorporation Agreement will also be required. You will also need to provide passport copies and proof of address for all shareholders and directors. For documents issued in foreign countries, you will likely need to have them notarized and certified with an Apostille, in accordance with the 1961 Hague Convention [1].

3. Open an Accumulative Bank Account: Before the company can be officially registered, you must open a temporary “accumulative” bank account. This account is used to deposit the minimum share capital. The bank will issue a certificate confirming the deposit, which is required for the registration process. After the company is registered, this account can be converted into a regular settlement account for the company's business operations [1].

4. Notarize Founding Documents: The Articles of Association and other founding documents must be signed in the presence of a Lithuanian public notary. This can be done in person in Lithuania, or you can grant a Power of Attorney to a representative, such as a lawyer or a CSP from Incorporator.io, to act on your behalf. This allows for the entire process to be completed remotely [1].

5. Register the Company: With the notarized documents and the bank certificate in hand, the next step is to submit the application to the Register of Legal Entities. This can be done in person, or more conveniently, through the electronic self-service portal of the Register of Legal Entities. The registration process is typically completed within three business days [1].

6. Post-Registration Formalities: Once your company is officially registered, there are a few final steps to complete. You must register the company with the State Tax Inspectorate (VMI) to obtain a tax identification number. If your company will have employees, you must also register with the State Social Insurance Fund Board (SoDra). If your expected annual turnover exceeds €45,000, you will also need to register for VAT [2].

Costs & Fees

The total cost of Lithuania company formation is relatively low, making it an attractive option for startups and SMEs. While the mandatory minimum share capital of €1,000 is the largest initial outlay, it remains an asset of the company. Other costs include state registration fees, notary fees, and fees for professional services.

Here is a more detailed breakdown of the typical costs you can expect:

Tax Overview

Lithuania's tax regime is a significant draw for international businesses. The system is straightforward, competitive within the EU, and offers attractive incentives for small businesses. As of 2026, the following key tax rates and rules apply:

Banking & Financial Infrastructure

Lithuania has a modern and robust banking sector, complemented by a world-leading fintech ecosystem. This dual strength provides businesses with a wide range of options for managing their finances. Opening a corporate bank account is a mandatory step for depositing share capital, and it is a critical component of your business infrastructure.

For traditional banking services, you can choose from established Scandinavian banks such as Swedbank and SEB, which have a strong presence in Lithuania and offer a full range of corporate banking services. These banks are well-regarded for their stability and comprehensive offerings, including loans, credit lines, and investment services.

However, where Lithuania truly shines is in its fintech sector. The country has positioned itself as a premier European hub for financial technology, thanks to a favorable regulatory environment and a supportive government. This has led to the emergence of numerous innovative fintech companies, such as Paysera and Revolut, which offer business-friendly multi-currency accounts, streamlined online onboarding, and competitive fees. These digital banking solutions are often more flexible and easier to open for non-residents, making them an excellent choice for international entrepreneurs.

At Incorporator.io, we can assist you in navigating the bank account opening process, whether you choose a traditional bank or a modern fintech provider. We can help you prepare the necessary documentation and ensure that you meet the bank's AML (Anti-Money Laundering) and KYC (Know Your Customer) requirements.

Compliance & Ongoing Requirements

After you have successfully incorporated your Lithuanian UAB, you must comply with several ongoing legal and administrative requirements to keep your company in good standing. At Incorporator.io, we provide ongoing compliance services to help you manage these obligations, so you can focus on growing your business.

• Annual Financial Statements: All companies in Lithuania are required to prepare and submit annual financial statements to the Register of Legal Entities. These statements must be prepared in accordance with Lithuanian accounting standards and provide a true and fair view of the company's financial position. The deadline for submitting the annual financial statements is typically May 31st of the following year.

• Tax Filings: Your company must file regular tax returns with the State Tax Inspectorate (VMI). Corporate income tax (CIT) returns must be filed annually, and any tax due must be paid by the 15th day of the sixth month following the end of the financial year. VAT returns are typically filed on a monthly basis, by the 25th day of the following month.

• Shareholder Register: You must maintain an accurate and up-to-date register of your company's shareholders. Any changes in the ownership of the company must be promptly recorded in the register.

• Registered Address: Your company must maintain a registered address in Lithuania at all times. If you are using a virtual office service, you must ensure that the service is renewed annually.

• Data of the Beneficial Owners: All companies are required to provide data on their ultimate beneficial owners (UBOs) to the JADIS system. This is a key requirement for transparency and anti-money laundering purposes.

Pros and Cons of Incorporating in Lithuania

Every jurisdiction has its unique advantages and disadvantages. Here is a balanced look at the pros and cons of incorporating a business in Lithuania:

Living and Working in Lithuania

For entrepreneurs who are considering relocating to Lithuania to manage their business, the country offers a high quality of life at an affordable cost. The capital city, Vilnius, is a beautiful and vibrant city with a rich history, a thriving cultural scene, and a growing international community.

Residence Permits for Non-EU Citizens

If you are a citizen of a non-EU country, you will need a residence permit to live and work in Lithuania. There are several options available:

• Startup Visa: Lithuania has a special Startup Visa program designed to attract innovative startup founders from outside the EU. If your business idea is deemed to have high potential, you can obtain a temporary residence permit for one year, with the possibility of extension.

• Residence Permit through Business: You can also obtain a residence permit based on your ownership of a Lithuanian company. To qualify, your company must have been active for at least six months, have at least €28,000 in equity, and you must have invested at least €14,000 in the company.

• EU Blue Card: If you are a highly-skilled professional with a job offer in Lithuania, you may be eligible for an EU Blue Card. This is a work and residence permit that is valid for up to three years and can be extended.

Cost of Living

The cost of living in Lithuania is significantly lower than in most Western European countries. Rent, food, transportation, and entertainment are all very affordable. This allows entrepreneurs to bootstrap their businesses for longer and enjoy a comfortable lifestyle.

FAQ

Q: Can a foreigner own 100% of a Lithuanian company?

A: Yes, absolutely. Lithuania permits 100% foreign ownership of a UAB. There are no requirements for local shareholders or partners, which gives you full control over your business [1].

Q: Do I need to travel to Lithuania to register a company?

A: No, you do not. The entire Lithuania business registration process can be handled remotely. By granting a Power of Attorney to a trusted representative, such as a lawyer or a CSP from Incorporator.io, we can act on your behalf and complete all the necessary steps without you having to leave your home [1].

Q: What is the minimum number of directors and shareholders for a UAB?

A: A Lithuanian UAB can be formed with just one shareholder and one director. These can be the same individual, which is ideal for solo entrepreneurs [1].

Q: How long does it take to register a company in Lithuania?

A: The process is remarkably fast. Once all the necessary documents are prepared and in order, the company registration can be completed in just 3-5 business days [2].

Q: What is the minimum share capital for a UAB in Lithuania?

A: The minimum share capital for a UAB is €1,000. This capital must be deposited into a temporary bank account before the company can be registered, but it becomes available for business use immediately after registration [1].

Q: Is it difficult to open a business bank account in Lithuania?

A: It can be challenging for non-residents due to strict AML/KYC regulations. However, with the right preparation and documentation, it is certainly achievable. At Incorporator.io, we have extensive experience in assisting our clients with opening bank accounts in Lithuania, and we can guide you through the process.

Q: Do I need to hire local employees?

A: No, there is no requirement to hire local employees. You are free to hire employees from any country, as long as they have the legal right to work in Lithuania.

Sources

[1] Invest Lithuania, "Steps to start your business in Lithuania," https://investlithuania.com/wp-content/uploads/Start-your-business-in-Lithuania-3.pdf [2] Lawhill, "Guide to Starting a Business in Lithuania (2026)," https://lawhill.lt/blog/starting-a-business-in-lithuania/ [3] Remitly, "Doing Business in Lithuania 2026 Small Business Guide," https://www.remitly.com/blog/business/doing-business-in-lithuania/