Lithuania has quietly become one of the most practical and cost-effective jurisdictions in the EU for company formation. With a standard corporate tax rate of 17% — and as low as 0% for qualifying startups in their first two years — full EU market access, a thriving fintech and tech ecosystem, and a straightforward registration process that 1Office handles entirely on your behalf, Lithuania is attracting founders, consultants, e-commerce operators, and international businesses who want a real EU company without the complexity or cost of Western European alternatives. This guide covers everything you need to know: why Lithuania, how company formation works, what the UAB structure means, what your annual report obligations look like, and what 1Office handles for you.

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Why Lithuania

Why Lithuania is worth serious consideration for company formation in 2026

Lithuania is a full EU member state, part of the Eurozone, a member of NATO, the Schengen Area, and the OECD. For international founders choosing a European jurisdiction, those memberships matter — they mean your Lithuanian company operates within the same regulatory, legal, and financial infrastructure as any other EU business. What makes Lithuania stand out within that framework is its combination of genuinely low operating costs, competitive tax rates, and a fast-growing technology and services ecosystem centred on Vilnius and Kaunas.

Competitive and tiered corporate tax rates

Lithuania's standard corporate income tax (CIT) rate is 17% from 1 January 2026, raised from 16% as part of the government's broader tax reform package. While not the lowest headline rate in the EU, Lithuania's real competitive advantage lies in its tiered structure. Companies with fewer than 10 employees and annual gross revenue under €300,000 qualify for a reduced CIT rate of 7% — making it one of the most attractive jurisdictions in the EU for small and early-stage businesses. New startups in their first two years of operation qualify for a 0% CIT rate on profits, giving founders maximum runway to get established before the standard rate applies. The employee count condition for the 0% startup rate was also removed in the 2026 reform, broadening eligibility. These rates are permanently built into Lithuanian tax law and available to any qualifying company, including foreign-owned ones.

Triple R&D deduction for innovation-driven businesses

Lithuania offers one of the most generous research and development tax incentives in the EU. Qualifying R&D expenses can be deducted at 300% — meaning for every €1 spent on eligible research and development activity, €3 can be deducted from taxable income. For technology companies, software developers, product businesses, and any company investing in innovation, this dramatically lowers the effective tax burden. The incentive is available to Lithuanian UABs regardless of whether the founders are Lithuanian residents.

EU single market access and Eurozone membership

A Lithuanian UAB is a full EU entity. You can invoice EU clients without VAT complications, benefit from EU VAT OSS for cross-border B2C e-commerce, access EU banking and payment infrastructure, and operate under EU contract law — all from a single Lithuanian company. For businesses that need EU legitimacy for clients, partners, or regulators, Lithuania delivers the same single market access as Germany, France, or the Netherlands at a fraction of the compliance cost.

One of Europe's fastest-growing fintech and tech ecosystems

Vilnius has become a serious European fintech hub. The Bank of Lithuania (LB) has one of the most founder-friendly regulatory frameworks for payment institutions and e-money institutions in the EU, making Lithuania the jurisdiction of choice for many fintech startups seeking an EU licence. Beyond fintech, Lithuania produces more ICT specialists per capita than almost any other EU country — a talent pool that makes it attractive for technology companies looking to hire. The country has produced unicorns including Vinted, Nord Security (NordVPN), and Kevin., signalling that the ecosystem is real and growing.

Low cost of operations

Company formation in Lithuania, accounting, legal services, office space, and employment costs are all materially lower than in Western Europe. Monthly bookkeeping for a simple Lithuanian UAB starts at €80 per month with 1Office — compared to €200 to €400 for equivalent services in Germany or the Netherlands. For founders who want to keep overheads lean while building, Lithuania's cost structure is a genuine operational advantage.

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The UAB Structure

Company formation in Lithuania: the UAB explained

The standard legal entity for company formation in Lithuania is the UAB — Uždaroji Akcinė Bendrovė, which translates as private limited liability company. It is Lithuania's equivalent of the UK's Ltd, Estonia's OÜ, or Germany's GmbH. It is the right structure for the overwhelming majority of founders, consultants, agencies, e-commerce businesses, and technology companies. Here is what you need to know before you register.

Share capital requirement

A Lithuanian UAB requires a minimum share capital of €1,000. At least 25% of this — €250 — must be paid up before the company is registered. The remaining 75% must be paid within 12 months of formation. For most founders this is straightforward: the €250 upfront is deposited into a temporary formation account, confirmed by the notary, and then transferred to your regular business account once the company is registered. The full €1,000 share capital is a real deposit into the business, not a fee — it belongs to the company and can be used for operating costs.

Notary requirement

Lithuania requires a notary procedure for company formation. This is the most significant procedural difference between Lithuania and the UK or Estonia, where formation is fully online with no notary involvement. The notary verifies the founding documents, confirms shareholder and director identities, and certifies the registration application. The good news: you do not need to visit Lithuania or appear at a notary in person. 1Office handles the entire notary procedure on your behalf via power of attorney. You provide the required documents, sign them digitally or by post, and 1Office's local representative completes the notary appointment in Vilnius.

Director requirements

A Lithuanian UAB must have at least one director (vadovas). The director does not need to be a Lithuanian resident or citizen — non-residents can serve as directors of a Lithuanian company. However, if your director is a non-EU citizen, additional documentation may be required and the process can take longer. 1Office can advise on the most efficient director setup for your specific situation, including whether a nominee director arrangement makes sense for your company structure.

Registered address in Lithuania

Every Lithuanian company must have a registered legal address in Lithuania. This is the official address used for correspondence from government authorities, the Register of Legal Entities, and VMI (the State Tax Inspectorate). You do not need to rent or occupy physical office space — a virtual registered address from 1Office is fully compliant with Lithuanian law and is included in all 1Office Lithuania formation packages.

Formation timeline

Lithuania company formation via 1Office typically takes 3 to 7 business days from submission of complete documents. The timeline includes document preparation, notary appointment, and registration with the Centre of Registers (Registrų centras). This is slower than the UK (same day) or Estonia (one day), but faster than many other EU jurisdictions — and the process requires no physical presence from you at any point.

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Step by Step

How to register a company in Lithuania: the complete process

Here is exactly what happens when you form a Lithuanian UAB through 1Office, from initial enquiry to a fully registered and operational company.

1. 1

   Choose and reserve your company name

   Your UAB name must be unique in the Lithuanian Register of Legal Entities (Registrų centras). Names are checked against the register before submission — 1Office confirms availability as part of the process. The name must end in UAB or the full form Uždaroji Akcinė Bendrovė. Names cannot be identical or deceptively similar to existing registered entities, and certain restricted terms require prior approval.

2. 2

   Provide founder and director documentation

   You will need to provide a valid passport copy and proof of address for all founders and directors. If you are a legal entity (company) acting as a founder rather than an individual, corporate documents are required. 1Office prepares a complete document checklist and reviews your submissions before the notary appointment to avoid delays. All documents are handled in English — Lithuanian translations are prepared by 1Office where required by the notary.

3. 3

   Deposit the initial share capital

   Before the company can be registered, at least €250 (25% of the minimum €1,000 share capital) must be deposited into a temporary formation bank account. 1Office provides guidance on the fastest way to make this deposit. The notary requires a bank confirmation of the deposit before certifying the registration documents. Once the company is registered, the funds are transferred to your company's regular business account.

4. 4

   Notary procedure via power of attorney

   1Office's local Lithuanian representative attends the notary appointment in Vilnius on your behalf, using a power of attorney that you sign and send. The notary verifies all documents, certifies the Articles of Association and founding documents, and confirms the share capital deposit. This is the step that makes Lithuania different from fully online jurisdictions — but with 1Office handling it, you are not involved in the logistics at all.

5. 5

   Registration with the Centre of Registers

   Following the notary appointment, 1Office submits the complete registration package to the Registrų centras — Lithuania's official registry of legal entities. Registration is typically confirmed within 1 to 3 business days of submission. You receive your company registration number (juridinio asmens kodas), an extract from the Register of Legal Entities, and your founding documents by email.

6. 6

   Tax registration with VMI

   Once registered, your company is automatically assigned a tax identification number by VMI (Valstybinė mokesčių inspekcija), Lithuania's State Tax Inspectorate. If your company will be VAT-liable — either because you expect to exceed the €45,000 annual turnover threshold, or because you want to register voluntarily — 1Office handles VAT registration as part of the setup. VAT registration in Lithuania is also required for companies receiving certain services from other EU countries (reverse charge rules).

7. 7

   Open a business bank account

   Your Lithuanian UAB will need a business bank account for operating purposes. Options include Luminor, Swedbank, and SEB for traditional Lithuanian banking, and Wise Business or Paysera for fintech alternatives that can be opened fully online. Traditional Lithuanian bank accounts typically require an in-person or video verification appointment. 1Office advises on the right banking approach for your company's activity and ownership structure.

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Costs

How much does company formation in Lithuania cost?

Lithuania is one of the most cost-effective EU jurisdictions for company formation and ongoing compliance. Here is a realistic breakdown of what to expect.

The total cost to form a Lithuanian UAB through 1Office — including state fees, notary, formation service, and first month of legal address — is typically €650 to €800 all-in, excluding share capital (which stays in the company). Ongoing monthly costs for an active company with basic accounting start at approximately €95 per month. These figures make Lithuania one of the most affordable full EU company setups available.

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Annual Report Lithuania

The Lithuanian annual report: what every UAB must file and when

Every registered company in Lithuania — including dormant companies with zero activity — must file an annual report (metinė ataskaita) each year. This is one of the most important compliance obligations for Lithuanian UAB owners, and missing the deadline carries financial penalties. Here is what you need to know.

What is the annual report deadline in Lithuania?

The annual report for a Lithuanian company must be filed with the Centre of Registers (Registrų centras) within six months of the end of the financial year. For companies using the standard calendar financial year (January to December), this means the annual report deadline is 30 June. Filing a late annual report results in automatic penalties from Registrų centras, which can escalate if the delay continues. A company that fails to file its annual report for two consecutive years can be struck off the register by the authorities.

What does the Lithuanian annual report contain?

The annual report for a Lithuanian UAB consists of the financial statements for the year, prepared in accordance with Lithuanian Accounting Standards or IFRS (for larger companies). For small and micro-sized companies — which most UABs qualify as — a simplified set of financial statements is sufficient. These typically include a balance sheet, profit and loss statement, and notes to the accounts. The annual report must be approved by the company's shareholders before it is filed. 1Office prepares the full annual report and coordinates shareholder approval as part of the accounting service.

Who qualifies as a small or micro company in Lithuania?

Lithuanian accounting law divides companies into four size categories: micro, small, medium, and large. The thresholds are based on balance sheet total, net revenue, and average number of employees over the year. Most foreign-owned UABs formed for service businesses, consultancy, e-commerce, or technology fall into the micro or small category, which significantly reduces the complexity and cost of annual report preparation. Micro companies (balance sheet under €350,000, net revenue under €700,000, and fewer than 10 employees) can use the most simplified reporting format.

Corporation Tax return and VMI filings

Separate from the annual report filed with Registrų centras, every Lithuanian company must also file an annual corporate income tax return with VMI by the 15th day of the sixth month after the financial year end — which for calendar-year companies means 15 June. For companies that qualify for the 0% startup rate or the 7% small company rate, this return is where the preferential rate is applied. Advance CIT payments are required during the year for companies whose annual CIT liability exceeded €3,000 in the previous year. 1Office handles all VMI filings as part of the accounting package.

Monthly declarations for active companies

If your Lithuanian company is registered for VAT, or if it employs staff and runs payroll, monthly declarations are required. VAT returns are filed monthly with VMI by the 25th of the following month. Payroll declarations (including personal income tax and Sodra social insurance contributions) follow a similar monthly schedule. For companies with neither VAT registration nor employees, the annual report and annual CIT return are the only regular filing obligations — keeping compliance straightforward and costs low.

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Industries

Who registers companies in Lithuania and why

Lithuania company formation attracts a wide range of founders and business types. Here is where it makes the most concrete sense by industry.

Fintech, payment institutions and e-money companies

Lithuania is the leading EU jurisdiction for fintech licensing. The Bank of Lithuania (LB) has issued more payment institution and e-money institution licences than almost any EU regulator, and its GATE regulatory sandbox allows fintech startups to test products before full authorisation. The entire regulatory framework is designed to be founder-accessible — Vilnius hosts the Fintech Inn conference, and the government actively supports financial innovation. For any startup that needs an EU payment licence, Lithuania is the most practical starting point in 2026.

IT companies, software development and SaaS

Lithuania produces the highest share of ICT graduates relative to total graduates in the EU. Vilnius and Kaunas are home to large development talent pools, making Lithuania attractive for tech companies that plan to hire locally. The triple R&D deduction makes software investment significantly more tax-efficient than in most other jurisdictions. For SaaS and software businesses — particularly those with development operations rather than purely remote founders — Lithuania offers a combination of tax efficiency and talent access that few EU countries can match.

E-commerce businesses selling into the EU

A Lithuanian UAB gives full access to the EU VAT One Stop Shop (OSS), making cross-border B2C e-commerce compliance manageable from a single filing point. For sellers on Amazon Europe, Etsy, and other EU marketplaces, a Lithuanian entity provides a clean EU legal base with lower formation and accounting costs than alternatives like Germany or the Netherlands. Post-Brexit, this is particularly relevant for non-EU founders who want an EU entity for their European sales channel.

International companies expanding into Eastern and Northern Europe

Lithuania's geographical position — bordered by Latvia, Belarus, Poland, and with Kaliningrad to the west — makes it a natural logistics and distribution hub for the Baltic and Central European region. For companies managing supply chains, distribution networks, or regional operations across Eastern Europe, a Lithuanian base offers EU legal structure combined with competitive costs and strong transport infrastructure, including the Rail Baltica project connecting Lithuania to Poland and the wider European rail network.

Consultants, agencies and service businesses

For independent professionals and service businesses that want an EU company at the lowest possible ongoing cost, Lithuania is a straightforward choice. The 7% CIT rate for small companies under €300,000 revenue, combined with monthly accounting starting at €80, makes Lithuania the most affordable EU company for a solo founder or small team that wants EU credibility without the overhead of a larger jurisdiction.

Shared service centres and back-office operations

Several global corporations — Barclays, Western Union, Nasdaq, Swedbank — have established their European shared service centres in Vilnius. The combination of EU membership, English-language professional services, strong IT infrastructure, and labour costs well below Western European levels makes Lithuania a practical location for back-office, finance, and technology operations that require an EU presence but want to keep costs competitive.

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What 1Office Handles

Company formation in Lithuania with 1Office: what is included

1Office has been supporting company formation and accounting in Lithuania for international founders since 2007. Our Vilnius-based team handles the full formation process remotely — you do not need to visit Lithuania, visit a notary, or navigate Lithuanian-language government portals. Here is what is included.

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  Full notary procedure on your behalf. 1Office's local Lithuanian representative attends the notary appointment in Vilnius using your power of attorney. You do not attend. All founding documents are prepared by 1Office in both Lithuanian and English, reviewed for accuracy, and submitted to the notary with your signed authorisation.
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  Company name check and reservation. We confirm availability in the Registrų centras register before you commit to a name, saving time and avoiding rejected applications. We advise on naming rules and restricted terms.
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  Legal registered address in Lithuania. Every Lithuanian UAB must have a registered address. 1Office provides a legal address at our Vilnius office, included in all formation packages, used for official government correspondence.
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  Registration with Registrų centras and VMI. We submit the complete registration package and follow up until your company number is confirmed. We also handle your initial VMI tax registration and advise on VAT registration timing.
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  Annual report Lithuania — preparation and filing. 1Office prepares your annual financial statements, coordinates shareholder approval, and files your annual report with Registrų centras before the 30 June deadline. Annual CIT return filing with VMI is included. You never miss a deadline.
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  Ongoing monthly accounting and VAT. For active companies, 1Office provides monthly bookkeeping, VAT return preparation and filing, payroll and Sodra declarations, and management reporting — all in English, all through the my1Office platform.
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  Banking guidance. We advise on the right banking route for your company — whether that is a traditional Lithuanian bank or a fintech solution — and help you prepare the documentation needed for account opening.

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FAQ

Frequently asked questions about company formation in Lithuania