Written by the US GO EU corporate formation team, in consultation with Lithuanian-licensed attorneys and accountants · Last updated July 2026
7%
Reduced corporate tax for small companies with annual revenue below €300,000 — standard rate is 17%; 0% applies in the first two years for qualifying new small companies
3–5
Business days to register — Lithuania's e-government infrastructure makes UAB registration one of the fastest and most digitally accessible in the EU
200+
Licensed fintech companies in Vilnius — the Bank of Lithuania's streamlined EMI and PI licensing process has made Lithuania Europe's premier fintech regulatory gateway
Why Americans Register Companies in Lithuania
Lithuania's strategic positioning in the EU business landscape is the result of deliberate policy choices rather than historical accident. After joining the EU in 2004 and the Eurozone in 2015, Lithuania invested systematically in e-government infrastructure, financial regulatory capacity, and startup ecosystem development — creating a jurisdiction that genuinely competes with Estonia for the position of the EU's most digitally advanced and entrepreneurially friendly small economy. The results are visible: Lithuania is home to over 200 licensed fintech companies, multiple EU unicorns, and one of the most respected financial regulators in the EU.
For American founders, Lithuania's 5% corporate tax rate for qualifying small companies is the headline — but the substance goes further. Lithuania's location in the heart of the Baltic region provides access to the entire northern EU corridor from Poland to Finland. The country's highly educated, English-proficient workforce keeps operating costs low compared to Western Europe. And Vilnius — a UNESCO World Heritage capital with a growing international professional community, low cost of living, and a genuine startup culture — is increasingly attracting founders who want to be physically present in their EU jurisdiction.
Business StructuresWhich Entity Type Is Right for You?
Lithuanian company law offers several structures. The UAB (Uždaroji Akcinė Bendrovė) — Lithuania's private limited liability company — is the clear and virtually universal choice for foreign entrepreneurs and American business owners. It provides limited liability, a manageable share capital requirement, and can be registered online through the Register of Legal Entities within 3 to 5 business days.
Most Popular★ Recommended for Americans
Private Limited Liability Company
UAB — Uždarojil Akcinė Bendrij
The standard structure for SMEs and foreign entrepreneurs. Liability is limited to contributed capital. Minimum share capital of €1,000 (reduced from €2,500 in May 2023) — of which at least 25% must be paid up before registration, with the remainder payable within 12 months. Can be registered online through the Register of Legal Entities. Eligible for Lithuania's 7% reduced corporate tax rate if qualifying conditions are met.
Public Markets
Public Limited Liability Company
AB — Akcinė Bendrij
For larger businesses seeking institutional investment or a listing on Nasdaq Vilnius (part of Nasdaq Nordic). Can issue shares to the public. Requires a minimum share capital of €40,000 and more complex governance including a mandatory supervisory board for larger companies. Not suitable for most initial foreign registrations — the UAB is the correct structure for the vast majority of American-owned businesses in Lithuania.
Sole Traders
Sole Proprietorship
IĪ — Individuali Įmonė
For individuals operating as sole traders. The owner bears unlimited personal liability for all business obligations. Simple to register, but provides no liability protection. Generally requires Lithuanian residency to operate as a sole trader — making it unsuitable for most non-resident Americans. The UAB provides equivalent simplicity with the critical benefit of limited liability.
Foreign Companies
Branch / Representative Office
Filiala / Atstovybė
A Branch (Filialas) allows a foreign company to operate in Lithuania as an extension of the parent — not a separate legal entity. A Representative Office (Atstovybė) can conduct non-commercial liaison activities only. Both are registered with the Register of Legal Entities. Used for market entry testing or where the parent company already exists and a separate Lithuanian UAB is not required.
Lithuania's Two-Tier Corporate Tax — 7% and 17%
Lithuania's corporate tax structure is one of the more commercially intelligent in the EU for growth-stage businesses: a 7% reduced rate for small companies with annual revenues below €300,000 and fewer than 10 employees (raised from 5%/6% effective 1 January 2026), stepping up to a standard 17% rate above these thresholds (raised from 16%). This two-tier design incentivises business growth within Lithuania — qualifying new small companies also benefit from a 0% rate for their first two tax periods (extended from one year in the 2026 reform), allowing profits to compound before any tax applies.
Lithuanian Corporate Tax — The 5% Advantage
Lithuania Tax Framework
7%
Reduced rate for small companies — applies when annual revenue is below €300,000 and the company has fewer than 10 employees; raised from 5%/6% effective 1 Jan 2026; 0% applies in the first two tax periods for qualifying new small companies
17%
Standard corporate income tax — raised from 16% effective 1 Jan 2026; applies above the small company thresholds; still competitive within the EU Eurozone
21%
Standard VAT rate (PVM) — mandatory registration when annual turnover exceeds €45,000; reduced rates of 9% and 5% apply to specific categories
Lithuania uses the euro and has been a Eurozone member since 2015 — the newest Eurozone entrant in this series. Lithuania has a double taxation treaty with the United States. The 7% rate is not a time-limited startup incentive — it is available to any qualifying company indefinitely, as long as the revenue and employee thresholds are maintained (a separate 0% rate applies only in a qualifying company's first two tax periods). Lithuania's participation exemption generally exempts qualifying dividends received from EU subsidiaries from corporate tax. Dividend withholding tax is 15% for non-resident shareholders, which may be reduced under the US-Lithuania treaty. Lithuania's State Tax Inspectorate (VMI — Valstybinė Mokesčių Inspekcija) operates a fully digital tax administration through the VMI e-services portal.
⚠️ US Tax Obligations Apply to Lithuanian Company Owners — and the 5% Rate Creates a GILTI Issue
US citizens and Green Card holders are taxed by the United States on worldwide income regardless of where their business is incorporated. Owning a Lithuanian UAB creates US filing obligations including FBAR reporting for Lithuanian bank accounts over $10,000 and Controlled Foreign Corporation (CFC) reporting. The 7% reduced corporate tax rate — Lithuania's most attractive feature for small businesses — is well below the GILTI high-tax exclusion threshold of 18.9%, meaning profits taxed at 7% in Lithuania will likely be included in the US owner's taxable income annually under GILTI rules. At the standard 17% rate, the situation is also below the threshold, though closer to it. In practice, for a carefully structured American-owned Lithuanian UAB, the GILTI inclusion significantly reduces the effective tax advantage of the 7% rate. Engage a US cross-border tax advisor with Baltic region experience before incorporating — understanding your actual combined US-Lithuanian tax position is the most important planning step.
How to Register a Company in Lithuania
Lithuania's UAB registration is one of the most efficient processes in the EU — entirely online for founders who can use Lithuania's e-signature infrastructure, and with a simple workaround for non-residents. The Register of Legal Entities (Juridinių Asmenų Registras) processes applications and typically issues the registration certificate within 3 to 5 business days.
1
Choose Your Business Structure and Plan Your Tax Position
For most foreign entrepreneurs and Americans, the UAB is the correct choice. Before proceeding, consult a US-qualified international tax advisor about the GILTI implications of owning a Lithuanian UAB at the 7% rate — the potential GILTI exposure at both the 7% and 17% rate levels is the most important planning variable for US owners. Understanding your real combined tax position before committing to a Lithuanian structure ensures you make an informed decision about whether the net after-US-tax rate still represents a meaningful advantage for your specific situation.
Decision + US tax planning
2
Choose and Check Your Company Name
The company name must be unique within the Lithuanian Register of Legal Entities (Juridinių Asmenų Registras) and must comply with Lithuanian naming regulations. The name must include the entity type designation "UAB" or the full "Uždaroji Akcinė Bendrovė". Name availability can be checked through the JAR (Juridinių Asmenų Registras) online portal. Certain restricted words (e.g., "Banka", "Draudimas") require regulatory approval before use. Your Lithuanian attorney or corporate service provider will check availability as part of the formation engagement.
JAR name search
3
Prepare the Articles of Association and Founding Documents
Prepare the Articles of Association — outlining the company's name, registered office address in Lithuania, business activities, share capital, shareholder structure, and governance rules. All founding documents must be in Lithuanian. Non-resident founders who cannot use Lithuanian e-signature infrastructure will need to have documents notarized and apostilled, then submitted through a Lithuanian representative (attorney or corporate service provider) who can use qualified electronic signatures. A Lithuanian corporate service firm can typically prepare and execute all founding documents remotely on behalf of non-resident founders.
Lithuanian language — e-signature or notarized
4
Open a Bank Account and Deposit Share Capital
Open a corporate bank account with a Lithuanian bank and deposit at least 25% of the minimum €1,000 share capital (€250 minimum, reduced from €2,500 in May 2023) before registration — the remaining 75% can be paid within 12 months of registration. The bank issues a confirmation of deposit required for the registration application. Lithuanian banks are generally accessible for non-resident founders, particularly in Vilnius, where the fintech ecosystem has made international company banking more routine. EU-licensed fintech business accounts are also widely used by Lithuanian UABs for day-to-day operations.
25% of €1,000 required before registration
5
Register the UAB with the Register of Legal Entities (JAR)
Submit the registration application to the Lithuanian Register of Legal Entities (Juridinių Asmenų Registras — JAR) online through the Registrų Centras (State Enterprise Centre of Registers) portal. Online registration costs approximately €57; in-person registration at a Registrų Centras branch costs €120. The application includes the Articles of Association, bank deposit confirmation, identification documents of shareholders and directors, and proof of registered office address. Standard processing time is 3 to 5 business days. Upon approval, the company receives its legal entity code (juridinio asmens kodas) — its unique identifier for all Lithuanian tax and administrative purposes.
€57 online / 3–5 business days
6
Register for VAT (PVM) with the State Tax Inspectorate
If your expected annual taxable turnover will exceed €45,000, register for VAT (PVM — Pridėtinės Vertės Mokestis) with the State Tax Inspectorate (VMI — Valstybinė Mokesčių Inspekcija) through the VMI e-services portal. Voluntary registration below the threshold is available and may be advantageous for businesses incurring significant input VAT or dealing primarily with other VAT-registered EU businesses. The standard Lithuanian VAT rate is 21%, with reduced rates of 9% (books, passenger transport, accommodation) and 5% (specific medical goods, periodical publications) applying to designated categories.
€45,000 threshold
7
Register with Sodra (Social Insurance) if Hiring
If your company will hire employees in Lithuania, register with the State Social Insurance Fund Board (Sodra — Valstybinio Socialinio Draudimo Fondas) for social insurance and health insurance contributions. Lithuanian employer social insurance contributions are approximately 1.77% of gross salary; employee contributions cover pension (8.72%), health (6.98%), and unemployment insurance. Total combined contribution rates are among the more competitive in the Eurozone. Registration with Sodra is handled through the VMI e-services portal as part of employer registration.
If hiring
What Does It Cost to Register a Company in Lithuania?
Lithuania is one of the most cost-efficient EU jurisdictions for company formation — the €57 online registration fee and €1,000 minimum share capital (of which only €250 must be paid upfront) make it highly accessible — reduced from a €2,500 minimum by a May 2023 law change. Ongoing professional costs reflect Lithuania's competitive professional services market.
| Cost Item | Notes | Est. Amount |
|---|---|---|
| JAR registration fee | Government fee for online UAB registration through the Registrų Centras portal. In-person registration costs €120. | €57 (online) |
| Minimum share capital (UAB) | €1,000 total (reduced from €2,500 in May 2023); at least €250 (25%) must be deposited before registration. Remaining 75% payable within 12 months. Stays as company capital. | €250 paid up initially |
| Registered office address | Every Lithuanian company requires a registered address. Virtual office and registered address services are widely available in Vilnius and Kaunas. | €200–€600/yr |
| Legal & corporate service fees | Lithuanian attorney or corporate service provider assistance with document preparation, JAR submission, and e-signature coordination for non-residents. | €400–€1,200 |
| Notarization and apostille (if applicable) | Required for non-residents who cannot use Lithuanian e-signature infrastructure for remote document signing. | €100–€400 |
| Accounting & annual compliance | Annual financial statements and corporate tax return mandatory. Lithuanian accountancy fees are among the most competitive in the Eurozone. | €500–€2,000/yr |
Post-Registration Requirements
Lithuanian companies face standard EU-level ongoing compliance obligations. Lithuania's digital tax administration through the VMI e-services portal makes most compliance tasks manageable online. Annual financial statements and tax returns are filed digitally, and the overall compliance burden is considered moderate by EU standards.
Annual Financial Statements & Corporate Tax Return
All Lithuanian UABs must prepare annual financial statements in accordance with Lithuanian Business Accounting Standards (LBAS — Verslo Apskaitos Standartai) and file annual corporate income tax returns with the VMI through the e-services portal. Financial statements must be filed with the Register of Legal Entities (JAR) and are publicly accessible. The corporate income tax return deadline is the 15th day of the sixth month following the end of the financial year (typically 15 June for calendar-year companies).
Corporate Governance — Director (Vadovas)
A Lithuanian UAB must have at least one director (vadovas) who is registered with the JAR. The director can be a foreign national and is not required to reside in Lithuania. Changes to the directorship must be filed with the JAR. The director bears personal responsibility for the company's legal and tax compliance. A supervisory board is required only for UABs exceeding certain size thresholds — most small foreign-owned UABs are exempt.
Accounting Records — LBAS Standards
Lithuanian companies must maintain accounting records in accordance with Lithuanian Business Accounting Standards (LBAS). A statutory audit is required for companies exceeding two of the following thresholds for two consecutive years: annual revenue above €3.5M, total assets above €1.8M, or more than 50 employees. Smaller companies are generally exempt from mandatory audit. Most foreign-owned Lithuanian UABs are well below these thresholds.
Beneficial Ownership Register (JAR)
Lithuania maintains a central beneficial ownership register through the JAR in line with EU AML directives. All companies must register their ultimate beneficial owners — individuals owning or controlling more than 25% of the company — and keep information current. Registration is completed through the Registrų Centras portal and must be updated within five business days of any ownership change. Information is publicly accessible.
What Americans Should Know Before Registering in Lithuania
The 7% rate is real — but both the 7% and 17% rates are below the GILTI threshold for US owners
Lithuania's two-tier corporate tax structure is genuinely compelling for non-US entrepreneurs. For American owners, however, both the 7% rate and the standard 17% rate sit below the GILTI high-tax exclusion threshold of 18.9% — meaning undistributed profits of a Lithuanian UAB owned by a US person are almost certainly included in the US owner's taxable income annually under the GILTI regime. At the 7% rate, the GILTI inclusion adds approximately 11.9% additional US tax on retained profits (before treaty credits), effectively turning the 7% Lithuanian rate into a much higher combined rate for US owners. At 17%, the additional US GILTI charge is approximately 1.9% before credits. The structure is not necessarily unworkable for Americans — but it requires careful GILTI planning that reduces or eliminates the additional US charge. This planning is possible and commonly done, but must happen before incorporation, not after.
Lithuania's fintech licensing is a genuinely distinct advantage — EMI and PI licences pass-ported across the EU
For fintech businesses, Lithuania is not merely a convenient EU registration jurisdiction — it is the most accessible regulatory gateway to the EU payment services market. The Bank of Lithuania (Lietuvos Bankas) has invested heavily in building a fintech-friendly regulatory framework, offering Electronic Money Institution (EMI) and Payment Institution (PI) licences under the EU's PSD2 and EMD2 frameworks. Once obtained in Lithuania, these licences are passported across all 27 EU member states — giving a Lithuanian-licensed fintech access to the entire EU payment market. The application process is faster and less costly than equivalent licences in Germany, the Netherlands, or Ireland. If your business involves payment processing, e-money, or financial services, Lithuania should be your primary EU consideration.
Non-residents can register remotely — but e-signature infrastructure requires a local representative
Lithuania's UAB registration is fully online — but the online system uses Lithuania's qualified electronic signature infrastructure, which non-residents do not automatically have access to. The practical solution is to engage a Lithuanian corporate service provider or attorney who can prepare and submit all documents using their qualified e-signature on behalf of non-resident founders, with a signed power of attorney. This is a standard, well-understood arrangement in the Lithuanian market. Alternatively, documents can be notarised and apostilled in the US and submitted through a Lithuanian representative. The fully remote formation process typically takes one to two weeks from engagement of a local representative to receipt of the registration certificate.
Vilnius is a genuinely affordable EU capital — a real operational base, not just a registration address
Unlike some EU jurisdictions where company registration is purely administrative, Lithuania — and Vilnius in particular — offers a genuine operational environment at dramatically lower cost than Western Europe. Office space, professional services, senior engineering talent, and the general cost of living are all significantly below the Western European average. For American founders who plan to spend time in their EU jurisdiction — whether for talent acquisition, regulatory meetings, investor relationships, or simply enjoying life in Europe — Vilnius offers a UNESCO World Heritage old town, excellent international connections via Vilnius International Airport, strong English proficiency among professionals, and a growing international business community. Lithuania is not just a mailbox — it is an increasingly serious operational hub.
The 25% paid-up capital rule means you can start with €250 — but plan to fully fund within 12 months
Lithuania's UAB formation requires only 25% of the €1,000 minimum share capital — €250 — to be deposited before registration (the minimum was reduced from €2,500 by a May 2023 law change). The remaining 75% (€750) must be paid within 12 months of the company's registration date. This is a legal obligation, not a recommendation — failure to pay up the full capital within the 12-month period can expose the company to legal risk. Set a calendar reminder for the 12-month anniversary of registration and ensure the remaining capital is transferred to the company account before the deadline. Your Lithuanian accountant should track this as part of ongoing company administration.
Registering a Lithuanian Company Is Right for You If…
- →You operate a fintech, payment services, or e-money business and want the EU's most accessible regulatory gateway — a Lithuanian EMI or PI licence is passported across all 27 EU member states.
- →You want a Eurozone EU company at very low operating costs — Lithuania's professional services, office space, and talent are significantly cheaper than Western Europe while maintaining EU-standard institutional quality.
- →You have taken US cross-border tax advice on managing GILTI exposure at both Lithuania's 7% and 17% rates, and you understand your real combined US-Lithuanian tax position with appropriate structuring in place.
- →You are building a digital, services, or technology business that benefits from Lithuania's highly educated English-proficient workforce, advanced e-government infrastructure, and fast registration process.
- →You are open to Vilnius as a genuine operational base — one of Europe's most liveable and affordable capitals, with a growing international professional community and real startup ecosystem depth.
We work with trusted Lithuanian corporate service providers, attorneys, and accountants who specialise in company formation for non-EU nationals. From Articles of Association preparation and JAR registration to bank account setup, VMI tax enrollment, VAT registration, fintech licensing guidance, and US cross-border tax coordination — we guide you through every step of Lithuania's efficient digital formation process. You can also check LocalVouch for attorneys and accountants other American founders have personally vouched for.