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Lithuania
We have a team of experienced professionals dedicated to supporting all your business requirements—ensuring smooth operations and full regulatory compliance. This strong foundation enables you to confidently establish and grow your business in Lithuania with efficiency and assurance.
WHY LITHUANIA?
Lithuania, officially the Republic of Lithuania, is a country in the Baltic region of Europe. It is one of three Baltic states and lies on the eastern shore of the Baltic Sea, bordered by Latvia to the north, Belarus to the east and south, Poland to the south, and the Russian semi-exclave of Kaliningrad Oblast to the southwest, with a maritime border with Sweden to the west. Lithuania covers an area of 65,300 km2 (25,200 sq. mi), and has a population of 2.9 million. Its capital and largest city is Vilnius; other major cities include Kaunas, Klaipėda, Šiauliai and Panevėžys. Lithuanians are the titular nation, belong to the ethnolinguistic group of Balts, and speak Lithuanian. Lithuania is a developed country with a high-income and an advanced economy ranking very high in Human Development Index. Lithuania ranks highly in digital infrastructure, press freedom and happiness.
It is a member of the United Nations, the European Union, the Council of Europe, the Council of the Baltic Sea States, the Eurozone, the Nordic Investment Bank, the International Monetary Fund, the Schengen Agreement, NATO, OECD and the World Trade Organization. It also participates in the Nordic-Baltic Eight (NB8) regional co-operation format.
Lithuania has an open and mixed economy that is classified as a high-income economy by the World Bank. As of 2017 the three largest sectors were services (63% of GDP), industry (24%) and agriculture (3%). On 1 January 2015, the euro became the national currency, replacing litas, which had been in circulation since 1993. Since 2021, Lithuania has issued hundreds of licenses for cryptocurrency exchange and storage operations, making it one of the leading countries in the EU in this sector. Doing business in Lithuania offers a highly competitive, digital-forward environment within the EU, featuring rapid company registration (often in a few days), a skilled multilingual workforce, and attractive tax incentives. Key sectors include fintech, ICT, and logistics. The country provides full foreign ownership, straightforward, remote-friendly setup, and a 0% corporate tax for 20 years in Free Economic Zones (FEZ).
ADVANTAGES
Strategic & Economic Advantages
- Gateway to European Markets As a member of the EU, Eurozone, and Schengen Area, Lithuania provides seamless access to a single market of over 450 million customers with no customs barriers or currency exchange risks when trading in euros.
- Favourable Tax System Lithuania offers competitive tax rates, including a standard corporate income tax rate of 15% (one of the lowest in the EU) and a reduced rate of 5% for small businesses that meet specific criteria.
- Free Economic Zones (FEZs) Businesses in one of the country’s six FEZs can benefit from significant incentives, such as a 0% corporate tax rate for the first six years and a 7.5% rate for the next ten years, along with real estate and dividend tax exemptions.
- Political and Economic Stability Lithuania has a stable, growing economy and a clear, transparent legal system, providing a secure environment for investment and long-term growth.
- Government Support for Investors The state actively encourages foreign investment, offering support through agencies like Invest Lithuania, which helps navigate permits, funding, and local market insights, including a special “Investment Highway” initiative for large projects.
Talent and Innovation
- Highly Educated and Multilingual Workforce Lithuania ranks high globally for tertiary education attainment and digital skills availability. A large portion of the population, especially young professionals, is proficient in English, facilitating international communication.
- Leading E-Infrastructure The country boasts some of the world’s fastest public Wi-Fi and extensive fiber-optic internet network penetration, along with highly digitalized public services, making remote work and online business efficient and easy.
- FinTech Hub Lithuania has become a major European hub for financial technology companies, offering a streamlined, supportive regulatory framework and fast licensing process through the Bank of Lithuania.
Quality of Life & Operational Efficiency
- Ease of Doing Business The process of company formation is quick, easy, and can often be completed online within a few business days.
- Lower Operational Costs Compared to Western Europe, Lithuania offers lower costs for labour, office rent, and general living expenses while maintaining high quality standards.
- High Quality of Life The country offers an excellent work-life balance, high safety index, and is a green, compact country with a range of natural and cultural amenities, contributing to employee well-being.
TAX REGIME
Corporate Taxation
- Standard CIT: 16%.
- Small Companies: 0% for the first tax period for new, small, qualifying companies; otherwise, a 5% or 6% rate applies to companies with \ (<10\) employees and \ (<€300,000\) annual revenue.
- Special Incentives: Generous R&D tax incentives (triple deduction) and special zones.
- Dividend Tax: Generally 15%.
- Withholding Tax: 10% on interest and royalties paid to non-residents.
Personal Taxation (Individuals)
- Income Tax (PIT): In 2025, 20% on income up to €126,532 and 32% on the excess. Note: 2026 reforms introduce brackets of 20%, 25%, and 32%.
- Capital Gains: Generally 15%.
- Social Security (SSC): Employer and employee contributions are high, designed for a “shared” burden, with rates for employees typically around 19.5% and employer portions varying.
Other Taxes
- VAT: Standard 21%; reduced rates of 9% and 5% for specific goods/services.
- Real Estate/Land Tax: Varies from 0.5% to 3%.
- Inheritance/Gift Tax: Applicable, with exemptions for close relatives.
GUATEMALA COMPANIES
Private Limited Liability Company (UAB – Uždaroji akcinė bendrovė):
The most popular choice, requiring a minimum share capital of €2,500. It allows 1–250 shareholders, and liability is limited to the company’s assets.
Small Partnership (MB – Mažoji bendrija):
Designed for small businesses with up to 10 members (natural persons only), with no minimum capital requirement.
Public Limited Liability Company (AB – Akcinė bendrovė):
Designed for larger companies, with a minimum capital of €40,000, and shares can be traded publicly.
Individual Enterprise (IĮ – Individuali įmonė):
A simplified form for individual owners, but it carries unlimited liability.
Branches and Representative Offices:
Foreign companies can establish a branch (conducting business, liable to parent) or a representative office (non-commercial, representing the parent).
Partnerships (TUB/KUB):
General partnerships (TŪB) have unlimited liability for all partners, while limited partnerships (KŪB) separate partners into general (unlimited liability) and limited (limited liability).
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Get in touch with the right people to get the right help in setting up your business in Lithuania.
enquiries@chandrawatpartners.com.