Lithuania
Company registration

Legal System
Lithuania is a European Union jurisdiction operating under a continental (civil law) legal system. Corporate law, tax administration, and reporting requirements are fully standardized and aligned with EU regulations. Company registration and ongoing compliance are managed through state registers, ensuring transparency, legal certainty, and predictability for international businesses.
Corporate Form and Business Environment
The most common legal form is UAB (Private Limited Company), the Lithuanian equivalent of a European Ltd. This structure is widely used for IT companies, e-commerce projects, service providers, trading businesses, and international B2B models.
Lithuanian law allows 100% foreign ownership, and non-residents may act as shareholders and directors, making UAB a flexible and internationally oriented corporate vehicle.
Currency and Payments
The official currency is the euro (EUR), which simplifies transactions within the EU, cooperation with European counterparties, and integration with EMI/PSP payment solutions. With a properly structured business model and compliant operations, Lithuania is widely regarded as a bank-friendly jurisdiction for opening corporate accounts and payment onboarding.
Taxation (Current Framework)
From 2025, the standard corporate income tax (CIT) rate in Lithuania is 16%.
For small businesses, a reduced rate of 6% applies, and under certain conditions, a 0% CIT may be available for the first tax period. Eligibility depends on statutory criteria such as employee count, turnover thresholds, and ownership structure. This tax framework makes Lithuania attractive for both startup launches and scalable EU projects.
Reporting and Compliance
Accounting is mandatory. Annual financial statements must be filed with the state register, and tax returns are submitted in accordance with the company’s tax status and operational profile (CIT, VAT where applicable).
Banks and payment institutions place strong emphasis on economic substance, sources of funds, and genuine business activity, making proper accounting and compliance critical.
Transparency and Disclosure
Lithuania is not an offshore jurisdiction. Company and beneficial ownership information is disclosed in line with EU AML requirements. A transparent ownership structure and a properly prepared KYC profile are essential for stable banking relationships and uninterrupted operations.
Regulatory and Fintech Infrastructure
Lithuania has a well-developed ecosystem of banks and EMI providers, which makes it a popular jurisdiction for international payments, fintech projects, and e-commerce businesses, provided that documentation, compliance, and business logic are properly structured.

Available corporate formThe primary and most practical legal form for foreign-owned businesses in Lithuania is UAB (Uždaroji Akcinė Bendrovė) – the Lithuanian equivalent of a Private Limited Company (Ltd).
This structure is widely used for IT companies, e-commerce, service providers, trading businesses, and international B2B projects, offering flexibility and full compliance with EU regulations.
Who can be a shareholderA UAB company in Lithuania may be established by:

• an individual of any nationality, including non-EU residents;
• a legal entity (foreign corporate shareholder is permitted);
• 100% foreign ownership is fully allowed, with no requirement for a local partner.

The number of shareholders may range from one or more. The ownership structure is documented in the incorporation documents and must be disclosed for AML compliance purposes.

• Management requirements (director)A Lithuanian UAB must appoint at least one director (Managing Director / CEO).
• There are no statutory residency requirements for the director. However, in practice, banks and EMI providers assess the company’s management substance, EU connection, and the director’s actual involvement in business operations.
• The director may also act as a shareholder.

Registered office and infrastructure

• A registered office address in Lithuania is mandatory.
• The address is used for company registration, tax correspondence, and banking compliance.
• In certain cases, banks may request additional evidence of operational presence or business substance within the EU.

Compliance and founder documentation
For company incorporation and subsequent banking onboarding, a standard KYC/AML package is required, including:

• passport or national ID of shareholders and the director;
• proof of residential address;
• information on ultimate beneficial owners (UBOs);
• a clear description of the ownership and control structure.

Company business profile (critical for banks)Lithuanian banks and payment institutions place particular emphasis on:

• a clear and consistent business model description (services/products);
• geography of clients and counterparties;
• financial flows and pricing logic;
• source of funds and projected turnover.

The quality of the business profile directly affects account opening approval and the long-term stability of payment operations.
Corporate documents
At the incorporation stage, the following documents are prepared:

• Articles of Association;
• shareholder resolution / incorporation protocol;
• details of directors and shareholders;
• ownership structure.

All documents are submitted to the state register and are subsequently used for tax reporting and banking compliance.

Corporate Income Tax (CIT)As of 1 January 2025, updated corporate income tax rates apply in Lithuania:

• 16% – standard corporate income tax rate;
• 6% – reduced rate for small businesses that simultaneously meet the statutory criteria
• (up to 10 employees, annual turnover up to EUR 300,000, and the company is not part of a group);
• 0% – may apply for the first tax period for newly established small companies that qualify under Lithuanian tax law.

This tax framework makes Lithuania a competitive EU jurisdiction for operating companies, particularly at the launch and early growth stages of international projects.
Value Added Tax (VAT)

• Standard VAT rate: 21%.
• Mandatory VAT registration is required once taxable turnover exceeds EUR 45,000 within the last 12 months.
• For companies engaged in intra-EU B2B services, cross-border transactions, imports/exports, VAT obligations may arise regardless of turnover and require individual tax structuring.

A properly configured VAT model is especially important for e-commerce, IT services, SaaS, and international B2B businesses operating within the EU.
Accounting and Financial Reporting

• Accounting is mandatory from the moment of company registration.
• Annual financial statements must be prepared and submitted to the Register of Legal Entities.
• Financial reporting must comply with Lithuanian accounting standards, and in certain cases align with international accounting practices.

Strict deadlines and reporting formats apply. Failure to comply may result in penalties and banking issues, including account restrictions.
Tax Reporting Obligations
Depending on the company’s tax status and activities, the following filings may be required:

• Corporate Income Tax (CIT) returns;
• VAT returns (where applicable);
• Payroll and social security reports (if employees are hired).

The frequency and scope of reporting depend on the tax regime, turnover levels, and business structure.
Compliance and Banking Requirements
For stable banking relationships in Lithuania, companies must ensure:

• consistency between accounting records and actual cash flows;
• transparent ownership structure and full UBO disclosure;
• documented and legitimate sources of funds;
• a clear, economically justified business model.

Tax and financial discipline directly affect the ability to open and maintain bank accounts with Lithuanian banks and EU-based EMI/PSP providers.