Accounting in Lithuania: Common Mistakes and How to Avoid Them

Accounting regulations can trip up foreign business owners. Here are frequent errors and how to steer clear:

• Incorrect VAT Registration: Businesses exceeding €45,000 annual turnover must register for VAT—failure incurs penalties.

• Delayed Financial Statements: Annual reports must be submitted by specific deadlines or risk fines.

• Improper Expense Documentation: Keep all invoices and contracts properly recorded.

• Mixing Personal and Company Finances: Open a dedicated business bank account.

• Underestimating Payroll Compliance: Follow correct tax and social security reporting for employees.

Tips for Foreign-Owned Companies:

• Hire a local accounting provider familiar with Lithuanian rules.

• Use cloud-based accounting platforms compatible with Lithuanian tax systems.

• Schedule regular consultations to review compliance updates.

Virtual Office Solutions: How They Work and Who They Benefit

Lithuania’s business environment allows for virtual offices, which provide a registered address and related services.

Benefits

• Affordability: From €100/month for post box, €150/month for address registration, to €200/month for workspace rent.

• Compliancy: Legal for company registration and communication.

• Flexibility: No need for a physical office, ideal for startups or foreign founders.

Legal Standing

• Recognized by Lithuanian authorities as a valid company address.

• Required for company registration—documented proof from provider is necessary.

Cost Comparison

Service	Price (Monthly)	Best For
Post Box Only	€100	Small businesses, minimal correspondence
Address Registration	€150	Official company registration
Workspace Rent (City)	€200	Occasional in-person work or meetings

Who Benefits Most

• Non-resident founders needing legal presence

• Companies with remote or distributed teams

• Startups minimizing operational costs

By understanding these essentials, non-EU entrepreneurs can confidently establish and manage businesses in Lithuania—leveraging the country’s competitive, business-friendly landscape.