Lithuania

Modern legal system of Lithuania belongs to the Romano-Germanic legal family.

The sources of law are laws and by-laws, international treaties and agreements, domestic regulatory treaties, regulations of constitutional control authorities and customs recognized by law.

Legislation of Lithuania provides for the establishment of the following types of companies:

Sole proprietorship is a private legal entity with unlimited liability. The owner of such an enterprise is liable for their obligations to the extent of their property. Only one individual may be the founder and owner of a sole proprietorship, and they may not be the owner of another sole proprietorship.

It is the most popular business structure for medium-sized and large business. Liability of founders of such a company is limited to the amount contributed by them to the company’s capital. The minimum amount of the authorized capital when incorporating a public limited company is EUR 40 000. The maximum number of founders of such a company is not limited.

Such a company is the most common way of investment for small business. The minimum authorized capital required to incorporate a UAB in Lithuania is EUR 2 500. Shareholders’ liability is only limited to the amount of invested capital.

General partnership is not a separate legal entity. The basis for formation of such a partnership is a partnership agreement, which shall be signed by all partners. The number of members of a general partnership varies between 2 and 20. Partners bear unlimited liability for debts.

In a limited partnership, general partners are liable to the extent of all their property. There must be at least 1 general partner. Limited partners are only liable to the extent of property contributed to the capital. The minimum number of such partners is 1.

Foreign companies may open in Lithuania a representative office of register a branch. Such forms of companies do not have separate legal personality.

A branch may conduct business activity to the extent determined by the foreign company.

A representative office has the right to represent the foreign legal entity’s interests and conduct marketing or research activities.

The foreign parent company is liable for obligations of its representative offices and branches.

Each company incorporated in Lithuania must have its name that distinguishes it from other organizations.

Words in a company name must conform to grammar rules of the Lithuanian language (endings).

Latin words are allowed.

The name of a legal entity must not contradict public order or morality.

A name must not deceive by being similar to well-known trademarks that have been registered or recognized. A foreign name may be used if there are a registered trademark and permission of the owner of that trademark.

Characters and digits are not allowed, except for “name.lt”, trademarks, and names of parent companies.

The foreign name of the parent company may be used if the founder of the company is the parent company, or in the case of establishment of a branch of the foreign company.

The name of a private limited company must contain the words “Uždaroji akcinė bendrovė” defining its form of incorporation, or the abbreviation “UAB”.

The following steps must be taken to incorporate a company in Lithuania:

1. Check of the company’s name. In Lithuania, a company name must be checked for uniqueness and reserved on a paid basis with the State Enterprise Centre of Registers.

2. Opening a bank account. An account needs to be opened with a bank of Lithuania or a payment system (EMI) to deposit the authorized capital in it.

For a private limited company, at least EUR 2 500 must be deposited in the account.

The authorized capital must be paid before filing the company incorporation application.

Then an account statement must be obtained, which will have to be enclosed with the application for incorporation of the company in Lithuania.

3. Obtaining a registered address. Each company in Lithuania must have its registered office, i.e. physical registration address.

4. Preparation of founding documents. Documents required for incorporation must be prepared, including: the memorandum and articles of association, and minutes of the first meeting of shareholders.

All founding documents must be translated into Lithuanian and notarized.

5. Registration with the Register of Legal Entities.

The following information must be provided for the purpose of registration:

• company name;
• registered address;
• data of the company’s founders (full name, citizenship, passport / ID);
• information on the amount of the authorized capital;
• kinds of the company’s activity;
• bank statement (authorized capital);
• and other documents.

All required information on the company is entered in the Register of Legal Entities. Since that time, the company is considered incorporated.

After the registration, the company receives a Certificate of Incorporation containing the registration number.

6. Registration with the Social Insurance Fund and tax authorities.

Registration of a company takes 1 to 5 days.

The minimum number of directors in a Lithuanian company is one.

There are no residency requirements.

Corporate directors are not allowed.

Legislation does not require a private limited company to have a secretary.

The minimum number of shareholders in a private limited company is one, the maximum number is 250.

There are no residency requirements.

Corporate shareholders are allowed.

Shareholders’ data is entered into a public register and disclosed to the local agent.

Frequency of holding meetings of shareholders is not determined by law in Lithuania.

Shareholders’ liability is only limited to the amount of capital invested by them.

Foreign citizens may be 100% owners and directors of Lithuanian companies.

Since 2022, all legal entities in Lithuania must receive, update and store accurate information on their ultimate beneficial owners (UBOs):

• full name;
• personal identification number, date of birth (if no personal identification number is provided by legislation of the foreign state);
• state that issued the identification document, place of residence; property rights and their extent (percentage of shares, percentage of votes or other control rights (chairman of the board of directors, member of the board of directors, chief executive officer, senior executive director, other positions connected with percentage of transferred voting rights).

This information must be provided to the Register of Legal Entities within 10 days after data has changed.

Beneficiaries must disclose their identity to the representative of the legal entity who fulfils the data provision obligation.

Failure to meet the above requirements and disclose information results in administrative liability:

• for legal entities: EUR 500 – EUR 2 400;
• for managers of legal entities: EUR 2 100 – EUR 6 000.

In addition, the Criminal Code provides for liability in the form of imprisonment for up to 7 years.

Information shall be transferred electronically by accessing the customer self-service system of the Center of Registers (with an electronic signature, through e-banking).

The authorized capital of a private limited company must be at least EUR 2 500.

Shares of such a company may not be offered and may not be publicly traded. Offer of shares to shareholders, employees and creditors of the private limited company is not considered a public securities offering.