Today, company registration in Lithuania is the most popular for trading companies, as it is possible to open a Lithuanian bank account for a Lithuanian company in 1 day.
The most favourable and fastest way to open a business in Lithuania is to register a closed joint stock company (UAB). This form of company limits the liability of the founders of a Lithuanian company to third parties only to the company's property.
The founder of a Lithuanian company may be a resident of any country; it is also possible to establish a company in Lithuania with only one founder. The director of a Lithuanian company may be a non-resident of Lithuania, but necessarily a natural person, i.e. a citizen of Ukraine may become a director and shareholder of a Lithuanian company solely. An obligatory condition for the correct operation of the Lithuanian company is the official payment of the director's salary, at least the minimum, in the amount of 400 euros.
Thanks to the Treaty on Legal Assistance between Ukraine and Lithuania, a citizen of Ukraine can very quickly register a company in Lithuania. To register a Lithuanian company, a lawyer in Lithuania only needs a power of attorney certified by a notary in Ukraine.
To register a Lithuanian company UAB, on the account of the company must pay the minimum authorised capital of 2500 euros. This amount can be used to pay the current expenses of the company after the Lithuanian company has been registered.
Reports and taxes of a Lithuanian company.
Every Lithuanian company is obliged to keep and submit annual financial statements. The reporting period is 12 calendar months and the report must be submitted to the Lithuanian state authorities by 1 June of the current year. Only the company's profit declaration must be submitted to the Lithuanian tax inspectorate, and the balance sheet, profit and loss statement, statement of changes in the company's capital and explanatory letter on the company's activities must be submitted to the register of legal entities. These documents can be prepared by the accountant of the Lithuanian company.
Auditing is mandatory only for open joint stock companies or UAB companies in the following cases:
If the value of the company's assets is more than 2 million euros
If the company's sales revenue exceeds EUR 3.5 million.
If the company has more than 50 official employees
For trading companies, the possibility of obtaining a VAT number is very important. For a Lithuanian UAB company, obtaining VAT is voluntary and this number can be obtained at any time after company registration. Obtaining VAT is mandatory if the Lithuanian company has:
The total value of goods purchased in other EU countries during 1 calendar year exceeds 10,000 euros.
Income from goods or services sold in Lithuania in the last 12 months exceeds the amount of 45,000 euros. This requirement does not apply to new vehicles and goods subject to excise duty in Lithuania.
If one person holds controlling stakes in several Lithuanian companies
The standard VAT rate is 21%, but in some cases, VAT is 0% . For example:
If goods are exported outside the territory of Lithuania
If goods are purchased and sold outside the territory of Lithuania (goods do not enter the territory of Lithuania)
When selling old cars that were previously registered as company property
Despite the fact that Lithuania joined the European Union back in 2014, the Lithuanian government creates favourable conditions for business in the country by offering low tax rates. For example, the profit tax of a Lithuanian UAB company ranges from 5% to 15%. The maximum tax of 15% a Lithuanian company is obliged to pay if:
The turnover on the company's account per year is more than 300,000 euros
The company employs more than 10 official employees
The founder of the company holds a controlling interest in another Lithuanian company or the spouse has a sole proprietorship in Lithuania.
In other cases, the Lithuanian corporate income tax is only 5% and is one of the lowest in Europe.
In addition, in Lithuania the tax rate on passive income, dividends, is also low - from 0% to 15%. In case dividends are received by a Lithuanian company that has managed at least 10% of shares of another Lithuanian company for 1 year without interruption, the dividend tax will be 0%. A foreign company also gets the opportunity to pay 0% when receiving dividends from a Lithuanian company, but only if the foreign company is not registered in an offshore zone.
Lithuanian company + Lithuanian bank account.
Of course, a Lithuanian company needs a local bank account to be fully operational. Lithuanian banks willingly open accounts for Lithuanian companies, even if the economic activity of the companies is not related to Lithuania.
Today, the fastest way for a Lithuanian company to open an account is to open an account in the Lithuanian bank Siauliu Vapka. The procedure of opening an account in a Lithuanian bank is quite simple, but in order to open an account the director of the company will have to come to Vilnius to sign bank forms. An account for a Lithuanian company is opened in 1 working day.
For companies registered in Lithuania, Siauliu Bank offers opening of a multi-currency account and allows to work freely with the US dollar.At the same time, managing an account with Lithuanian Bank is very easy - the bank offers convenient online tools, with which you can quickly make a bank transfer.
In addition to an account in a Lithuanian bank, it is possible for a Lithuanian company to quickly open accounts in one of the Lithuanian payment systems. In this case, the company's details will include the Lithuanian IBAN number, and the company's money will be stored in the Central Bank of Lithuania.
For more details on how to open a company in Lithuania with an account in a Lithuanian bank, we will provide a free consultation at the office of Maira Consult.
