Lithuania company registration
Civil Code of the Republic of Lithuania lay dawn the legal norms of foundation, legal status, management bodies and their competence, liquidation and reorganization of different type companies in Lithuania. According to the Civil Code, all companies operating in Lithuania have a status of a legal person. A legal person shall be defined as a company, institution or organization, which may acquire and exercise rights and obligations at its own name.
Prior to establishing an enterprise it is essential to assess and choose the type of an undertaking which is the most appropriate for you in legal and economic terms, because this choice will affect not only the amount of necessary equity capital, but also the legal status of the enterprise and other business-related issues.
The most common form of a business presence in Lithuania is a limited liability company (UAB).
There are four main kinds of company registration Lithuania for foreign investors, and they are as follows:
- public company (AB) is similar to limited liability company (LLC) or joint stock company (JSC)
- private company (UAB)
- general partnership (TUB) or limited partnership (KUB)
- branch or representative Office
All business entities must register with the unified Register of Legal Persons (The Registrar), administered by the State Enterprise Centre of Registers.
Baltic Legal will assist you in preparation of incorporation documents and represent your interests in the Register Centre. More on Baltic Legal will help you set up business in Lithuania and do everything related to company formation.
Public limited liability company (AB)
Public limited liability company is the most common business vehicle for medium or large companies in Lithuania.
- Authorised capital
- When establishing a public limited liability company, the minimum registered capital is EUR 40,000. The minimum registered capital must be formed in bank account; at least 25% have to be paid up. The capital is divided into shares, which may be traded or offered for sale publicly.
- Founder
- One or more persons can be the founder/s (shareholder/s) of a public limited liability company, and they can be both natural persons and legal entities. The founder may be a resident or non-resident of the Republic of Lithuania.
- Status
- A public limited liability company is considered a legal entity.
- Liability
- The company and its shareholders have limited liability, they are liable for its obligations to the extent of its entire property. A founder or shareholder is not liable for the public limited liability company's obligation, as well as the public limited liability company is not liable for the founder's or shareholder's obligations.
- Management body
- The decision-making body of a limited liability company is the board with minimum of three board or supervisory council directors. The management bodies of the company are determined by the general shareholders meeting.
Private limited liability company (UAB)
The most common way to invest in the Republic of Lithuania for smaller foreign investors is to establish a private company.
- Authorised capital
- When establishing a private limited liability company, the minimum registered capital is EUR 2,500. The minimum registered capital must be formed in bank account; at least 25% have to be paid up. The capital is divided into shares, which may not be traded or offered for sale publicly.
- Founder
- One or more persons can be the founder/s (shareholder/s) of a private limited liability company. The founder may be a resident or non-resident of the Republic of Lithuania.
- Status
- A private limited liability company is considered a legal entity.
- Liability
- The company and its shareholders have limited liability. The shareholders' undertaking is limited to the amount of the capital invested only.
- Management body
- A private limited liability company is determined by the general shareholders meeting, there is no requirement for board or supervisory council. The maximum number of shareholders in a private limited liability company must not exceed 250.
- Audit
- Annual audits are required if turnover exceeds EUR1.4m.
General partnership (TUB) or limited partnership (KUB)
There are two type of partnership in the Republic of Lithuania. The main difference is range of liability.
- Status
- Both partnerships are considered a legal entity.
- Liability
- General partnerships have unlimited liability and limited partnerships have limited liability, it means that the limited partners are liable to the extent of their contributions, while there must be at least one General Partner with unlimited liability.
For both general partnerships and limited partnerships, there needs to be an agreement between the partners, signed by all of them and notarised.
Branch or representative office
The foreign companies or organisations may establish their representative offices and the branches. The representative office or the branch is a part of a foreign company or organisation, which is situated in the territory of the Republic of Lithuania. At least one manager must reside in Lithuania.
The branch or the representative office are the unit of a legal person (foreign company), but is not a legal person.
The branch office is a structural unit of a legal person, which has its registered office and performs all or a part of the legal person's functions. The branch office can conduct trade within scope set by foreign company.
The representative office is a unit of a legal person, which has its registered office, and enjoys the right to perform the operations specified, i.e. to represent the interests of the legal person and safeguard them. The representative office can promote but cannot trade.
The main feature of the representative office or the branch is that foreign company is responsible for all liabilities.
For tax purposes a foreign company may set-up a permanent establishment in Lithuania. The representative office or the branch is no formal auditing requirement.
