Comparative and International Context

Lithuania vs. Estonia vs. Latvia: Company Incorporation

Feature	Lithuania	Estonia	Latvia
Min. Share Capital	€1,000 (UAB)	€2,500 (OÜ)	€2,800 (SIA; small-cap possible)
Company Registration	Online & in-person	Online (e-Residency, fastest)	In person/online (Latvian e-ID)
Registration Language	Lithuanian/English	Estonian/English	Latvian
Time to Register	Up to 5 days	1–3 days (online)	Up to 5 days
Tax Rate (CIT)	15% (5% for small)	20% (on distributed profit)	20%
VAT Registration	€45,000 threshold	€40,000	€40,000
e-Residency/E-services	Yes (limited)	Yes (advanced)	Yes
Popular For	IT, fintech, startups	Tech, startups, digital nomads	Local & regional businesses

• Estonia is renowned for its advanced e-Residency system and ultra-fast online registration.

• Lithuania offers the lowest minimum capital and a tax-friendly environment for small businesses.

• Latvia bridges between both systems, offering flexibility especially for EU-based shareholders.

Doing Business: Lithuania vs. Western Europe

• Cost Advantage: Labor and office costs are lower in Lithuania compared to Western Europe, while quality remains high.

• Business Environment: Lithuania ranks highly for ease of doing business, government support, and digital service infrastructure.

• EU Compliance: Lithuanian legal and fiscal frameworks are aligned with EU rules, ensuring certainty for international founders.

• Talent & Language: Multilingual, IT-literate workforce and pro-business atmosphere.

Frequently Asked Questions

Lithuanian Company Formation – FAQs

• What’s the fastest way to register? Online registration using a qualified electronic signature is fastest, taking as little as 1-3 business days for UABs.

• Do foreigners need to be residents? No; non-residents can own and manage companies. A local registered office is required.

• Is a local address mandatory? Yes. This can be provided via virtual office services.

• What documents are needed?

  • Articles of Association

  • Shareholder/Director IDs

  • Proof of address

  • Capital deposit confirmation (if applicable).

• Is a business bank account necessary? Yes, to manage capital and transactions.

FAQs: Virtual Office Solutions in Lithuania

• What is a virtual office? It is a registered business address providing correspondence, call handling, and sometimes meeting space—ideal for remote founders and small companies.

• Is it legal to use for company registration? Yes, and it is recognized by authorities.

• Who benefits most? Startups, foreign owners, and businesses minimizing office costs.

• What’s included? Official address, mail management, and optional add-ons like phone answering or conference rooms.

FAQs: Tax Filing for Lithuanian SMEs

• When do tax returns have to be filed? Annual returns must be submitted by May 1st of the following year.

• What taxes apply to SMEs?

  • 15% (or 5% for very small businesses) corporate income tax.

  • VAT above €45,000 turnover.

  • Social security for employees.

• Is professional accounting required? Strongly recommended to ensure compliance and proper deductions.

• Foreign income: All worldwide income must be reported if tax resident.

• Are there VAT exemptions for small businesses? Yes, businesses below the turnover threshold can avoid VAT registration.

• What are common tax mistakes? Late filings, incorrect VAT registration, poor documentation, and mixing personal/company finances.

This structured guide provides practical insights for tech founders and SMEs interested in Lithuania and the Baltics, supporting smart decisions across legal, tax, and operational aspects.