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Business environment

Business Environment at a Glance

  • 3 days start up time for new businesses / Centre of Registers, 2015
  • Tax treaties with 50 major markets including the USA, China and Russia / Ministry of Finance, 2015
  • 0% tax rates for 6 years in special Economic zones and 50% profit tax deduction afterwards / Ministry of Economy, 2015
  • Triple tax deduction for R&D / State Tax Inspectorate, 2015

We’ll give you the safety and support you need to grow your operations

We understand that a strong business needs a strong environment in which to flourish. That’s why over the last few years we have implemented a number of measures that help businesses get up and running quickly and without fuss. And it’s paying off; Lithuania has jumped eleven places since 2013 for the ease of starting a business to 8th place globally in the World Bank’s Doing Business Report. Our government understands the benefits of investment and is more than ready to provide you with the support you need, and our modern dynamic business sector is fully EU compatible. What’s more, with tax treaties with 50 major markets including China, Russia and the USA, our business environment is truly global in its reach.

Doing business in Lithuania couldn’t be easier

With start-up times of just three days and e-signature company registration, you can be operational in no time. What’s more, all our laws are fully EU compliant, giving you the added security of a safe and transparent legal framework.

Once you’re established, you’ll find that there are a number of incentives available to help you grow, and with Corporate Tax four times lower than EU average you’ll be able to optimize your margins.

Lithuania is also home to seven special economic zones which offer lucrative 0% tax breaks on corporate tax, dividends and real estate, as well as world class infrastructure and ancillary services. The Kaunas Free Economic Zone and Klaipeda Free Economic Zone can also offer the added bonus of air and sea links.

What’s more, in Lithuania we also place particular emphasis on creativity and innovation, which is why if your company is focused on innovation and new technologies you can also benefit from triple tax deductions on R&D expenses and up to 50% reduction on taxable profit.

For further business essentials please see the tabs below  ↓

Start up business in Lithuania Start up business
Business law
Employment law in Lithuania Employment law
Business tax in Lithuania Business tax
Overhead costs in Lithuania Overhead costs
Financial incentives in Lithuania Financial incentives
Start up business

First steps of setting up business in Lithuania made easy


Procedures Time to complete Associated costs
1. Check and reserve the name of the company (limited liability company) <1 day  approx EUR 16
2. Register at the Company Register, including registration with State Tax Inspectorate (the Lithuanian Revenue Authority) for corporate tax, VAT, and State Social Insurance Fund Board (SODRA) 1 day  approx EUR 51
3. Complete VAT registration 3 days  Free



World Bank, Doing Business 2016

 Other useful links:

Centre of Registers

Business law

Most common types of entities for foreign investors:

  • Small partnership
  • Private limited liability company
  • Public limited liability company
  • Individual Enterprise
  • Agricultural Company

Private limited liability companies are the most common choice for among foreign-based enterprises.


Main features of most popular entities
Assessment Criteria Small Partnership (MB) Private limited liability company (UAB) Public liability company (AB) Individual enterprise (IĮ) Agricultural Company (ŽŪB)
Minimum number of stakeholders 1 member 1 shareholder 1 shareholder 1 owner 2 members
Maximum number of stakeholders 10 members 249 shareholders Unlimited Unlimited Unlimited
Minimum amount of capital None (MB members define contributions) ≥  EUR 2,500 ≥ EUR 40,000 None None
Liability Limited civil liability – shareholders are not held personally liable for MB obligations Limited civil liability – shareholders are not held personally liable for UAB obligations Limited civil liability – shareholders are not held personally liable for AB obligations Unlimited civil liability – should business debts exceed the assets of the individual enterprise the owner is held personally liable Limited civil liability – members are not held personally liable for ŽŪB obligations



Should setting up your own greenfield investment project be too risky, there are always other options available that will allow to make your business happen in Lithuania:


a branch
By establishing a branch office  and appointing a branch manager, a foreign company is able to reduce its costs. As far as Lithuanian law is concerned, the branch manager is the official branch office representative, and it is their responsibility to sign documents and organise the accounting of the branch office. Moreover, every branch office has to be registered with the Lithuanian Registry of Legal Entities, and is responsible for the maintaining of its own accounts. Contact us or see useful links for further information.
Mergers and acquisitions When acquiring an existing business in Lithuania, you can either purchase its shares or its business assets. If the existing business is conducted through a partnership or a branch office, you can only acquire the business assets.Contact us or see useful links for further information
Partnerships Partnerships can be created directly by establishing a joint venture, a limited liability company, a general partnership or a limited partnership; or indirectly by the appointment of a commercial agent or a distributor or by setting up a network of franchisees.Contact us or see useful links for further information



Law on Companies of the Republic of Lithuania


Useful links: 

Lithuanian Registry of Legal Entities

PwC Business Guide to Lithuania 2016

Employment law

Here are few general laws related to employment

For more detailed information, please check the useful links below or do not hesitate to contact us.


Conclusion of
employment contract
  • Employment contract must be in writing; contain conditions of payment; place of work and work description
  • Fixed-term contracts for newly created workplace are allowed, but they should not exceed 5 years
  • Temporary employment contracts are allowed
Termination of employment contract
  • Employment contracts may be terminated for reasons related to qualifications, profesional competence or behaviour at work. Contracts may also be terminated for economic or technological reasons. In all situations, the employer must provide 2 months notice prior to contract termination.
Work hours, overtime work, remuneration
  • The working week consists of 40 hours. A working day or shift can last up to 8 hours. A five-day workweek is standard, but it may be extended to 6 days.
  • Overtime cannot exceed 4 hours over two consecutive days and 120 hours per year, unless this has been established collectively prior to the signing of the employment agreement. Notwithstanding, a maximum of 180 hours per year cannot be exceeded.
  • Overtime and nightshift pay must be at least 1.5 times the hourly/monthly wage established for the employee.
  • A three-shift working day is permitted by the Lithuanian Labour Code.
  • Minimum annual paid holiday is 28 calendar days for employees but is extended to 35 calendar days for:
    1. employees under age of 18
    2. single parent employees, raising a child under the age of 14 or a disabled child under the age of 18
    3. disabled employees
  • Normally employees are entitled to paid vacation after continuous work of 6 months
Work permits for
  • EU Blue Card“ (all-inclusive residency and work permit) may be issued for highly skilled professionals* from non-EU countries in a period from 15 days** and up to 2,5 months.
  • Non-EU citizens who are skilled professionals*** not holding a university degree may be issued temporary work and residency permits in just slightly above 3 months.

For more information regarding the EU Blue card and its application procedure, please visit

Regulatory authorities Including, but not limited: the Register of Legal entities; State Labour Inspectorate;  LR Migration Department


* Highly skilled professionals must hold a university degree, their qualification must be in shortage in the Lithuanian labor market and they must be contracted for no less than twice the average Lithuanian salary.

** 15 day term is applicable when highly skilled professional is contracted for no less than three times the average Lithuanian salary and fast-track processing option is chosen for twice the regular fee.

*** Skilled professionals must hold a certificate of a specific qualification and have at least two years of professional experience. Applicant’s qualification must be in shortage in the Lithuanian labor market and they must be contracted for a salary equivalent to local co-workers. Processing time includes fast-track option when temporary residence permit is issued.


Sources and other useful links:

Labour code of the Republic of Lithuania

Departament of Migration 

Lithuanian labour exchange 

State Labour Inspectorate 

Business tax

Below you will find the major business tax in Lithuania

For a quick and simple comparison to other major European countries please find the document attached


Corporate profit tax 0-15%
VAT 21%
Dividends (witholding tax) 0-15%
Personal income tax 15%
Social security tax  9% paid by employee 30.98% paid by employer
Real estate tax 0,3-3%



Other favourable tax conditions available to foreign companies:
  • 0% corporate income tax for six years in free economic zones.
  • If they meet certain conditions, entities can reduce their taxable profit up to 50% providing they are carrying out an investment project into qualifying assets.
  • Expenses incurred by companies carrying out R&D projects can be deducted x3;
  • 0% withholding tax on interest when the recipient of interest is established in the European Economic Area (EEA) or a country with which Lithuania has signed a treaty for the avoidance of double taxation;
  • 0% withholding tax on royalties paid to related parties meeting requirements of the EC Interest and Royalty Directive;
  • 0% percent withholding tax on dividends distributed to a foreign/Lithuanian entity where the recipient has held not less than 10% of voting shares for a continuous period of at least 12 consecutive months;
  • 0% corporate income tax on dividends received from EEA countries if the dividends were distributed from profits which were subject to corporate income taxation;
  • Advanced Pricing Agreements (APAs) and Binding Rulings available as from 1 January 2012;

Contact us for more tax related incentives or see useful links for further information

Sources and useful links:

State Tax Inspectorate 

PwC / Paying taxes, 2015 and Business Guide to Lithuania, 2016

Deloitte / Withholding tax rates, 2015 and Lithuania’s tax highlights, 2016

EY/ Worldwide personal tax guide. 2014-2015

Overhead costs

To give you an idea of your potential savings, here are few major cost brackets for your general overhead


Monthly rental of office space (EUR m2)

A-Class B-Class
Vilnius 13.0 – 16.0 8.0 – 12.0
Kaunas 9.7 – 13.0 5.8-8.0
Klaipeda 8.5 – 12.5 5.5-7.5



Monthly rental of warehouse space (EUR m2)

Class A&B / Existing Vacant Built to Suit Projects Lower Quality
Vilnius 3.5 – 5.2 4.6 – 5,5 1.5 – 3.0
Kaunas 3.5 – 4.9 4.6 – 5.0 1.4 – 2.9
Klaipeda 3.4 – 4.7 4.6 – 5.0 1.4 – 2.9



Utility Costs (EUR, excl. VAT)

Measurement Average rates
Electricity 1 kWh 0.09*
Natural Gas 1 cubic meter 0.29**
Cold Drinking Water 1 cubic meter 1.28***
Hot Drinking Water 1 cubic meter 5.88

*Price for industrial consumers, Eurostat 2015

**Price for users using more than 20,000 cubic meters, Eurostat 2015

*** Average tariff for year 2015


Sources and useful links:

Newsec market reports

BNP Paribas market research

Ober-Haus market research 

InReal market reviews


National Commission for Energy Control and Prices

Lithuanian distribution network operator

Financial incentives

Investments into R&D activities or infrastructure


Grants for development of new or significantly improved products, services or processes. You can also get funding for investment into R&D infrastructure, and activities related to process and organizational innovations.

 Support Intensity
 Activity 1  Large Company  Medium Company  Small Company  Effective Collaboration*
 Industrial Research  up to 50 %  up to 60 % up to 70 % + up to 15%
 Experimental development  up to 25 %  up to 35 %  up to 45 %


Funding for employees’ training and qualification


Foreign companies can apply for funding as long as they have or are planning to have a base in Lithuania.

Support Intensity
Large Company Medium Company Small Company Micro-Enterprise
up to 50 % up to 60 % up to 70 % up to 70%


Other incentives for investment projects are available. Please contact us for more information.

Our latest investors
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