Law on Public Limited Companies of the Republic of Lithuania
Law on Small Societies
Main types of companies
Private limited liability company (UAB)
Small partnership (MB)
Statutory capital requirements
UAB - 1000 EUR
MB - no requirement for a contribution amount
% of shares must be paid up at incorporation?
LLC: 100% (or at least 25% in cash, provided that the cash payment is at least EUR 1 000 and the remainder can be paid within 12 months in cash or contributions in kind)
MB: the procedure shall be laid down in the MB statutes
Can be bearer shares?
NO
Is a formal nominee shareholder possible?
NO
Minimum number of shareholders/members
UAB: 1 (whether local or foreign natural or legal person)
MB: 1 natural person (local or foreign, maximum 10 persons)
Holding shares in the Trust?
NO (no direct entry, intermediate holding company required, e.g. Maltese company)
Holding shares in the Foundation?
YES
Do general meetings of shareholders have to be held on site?
NO
Director
UAB: 1
MB: optional (a representative from the members can be identified), but possible.
The possibility of a Corporate Director?
NO
Mandatory local director?
NO
Is a company secretary mandatory?
NO
Is a local reg.agent required?
NO
Is it compulsory to register business address in Lithuania?
YES
A public register of directors?
YES
Public register of shareholders/members?
YES
Notarial transfer of shares?
LLCs: YES, when 25% or more of the shares are transferred or when the sale price exceeds EUR 14 500
MB: NO
Beneficiary disclosure to the companies register?
YES
Accounting, annual reporting
YES
Are audits mandatory?
NO, except in certain cases
Average time to start a business?
2-4 days
Possibility of acquiring "shelf" companies
YES (on the same day as the documents are agreed)
Opening a bank or EMI account?
in Lithuania or any other country
Ordinary General Meeting of Shareholders
UAB: once a year (by 30 April of the following year)
MB: as provided for in the Regulations
Is the Hague Convention on the Recognition of Apostilles valid?
YES
Taxation
Corporate tax rate
0% for the first tax period (where the number of employees does not exceed 10 and the revenue does not exceed €300,000 (and none of the conditions apply to related controlled companies), the shareholders are natural persons and there has been no suspension of the company's activities, liquidation or reorganisation, and no transfer of shares within 3 consecutive tax periods).
6% (where the number of employees does not exceed 10 and the revenue does not exceed €300 000 (and none of the conditions apply in the related controlled companies). 16% - ordinary corporate tax.
Subject to corporation tax
Lithuanian companies
Permanent establishments
Taxation of capital gains income for Lithuanian companies?
0% if holding more than 10% of the shares of an EEC resident company or a company resident in the country with which the DTAA is signed for at least 2 years) (if holding more than 10% of the shares for at least 2 years, the other new shares are exempted from the 2 year requirement).
Capital gains taxation for foreign companies in Lithuania?
NO
Advance corporation tax
NO - if the taxable income for the previous tax period did not exceed EUR 300 000).
YES - for other companies.
The company can choose:
(a) whether to pay the advance corporation tax on the basis of the results of 9 months of the preceding year and the remainder on the basis of the results of 10 to 12 months of the preceding year;
(b) pay advance corporation tax based on expected profits (in which case the advance corporation tax must not be less than 80% of the amount of future actual corporation tax , otherwise interest will be charged).
Losses
Loss carry forward (70%, except for companies taxed at 0/6% corporate tax rate (their losses are carried forward at 100%)
Transfer of losses between group undertakings
YES (under certain conditions)
Dividend tax
UAB:
0% for dividend distributions if at least 10% of the shares are retained or intended to be retained for more than 12 months.
Otherwise 16%, unless another % is provided for under the DAIS; dividends received from EEC resident companies are in all cases tax-free.
16% if the international tax benefit is sought and is the main or one of the main objectives. Also for blacklisted companies.
15% for dividends paid to natural persons
Withholding tax on interest payments abroad
0% if paid to companies incorporated in the EEC or in countries with which there are double taxation treaties (otherwise 10%, unless a different % is set by the DTC)
Withholding tax on royalty payments abroad (franchise)
0% if paid to an EU resident company (or a related entity) that has held at least 25% of the shares for at least 2 years (otherwise 10%), or tax treatment provided for in double taxation treaties.
Taxable gross income
Income earned worldwide
Shipping revenue
Shipping units may be subject to a tonnage tax on income from international carriage by sea and directly related activities if the unit meets certain criteria.
Standard VAT rate
21%
VAT registration
Voluntary (for all those operating in Lithuania);
Mandatory when taxable income (individually or between related parties) exceeds €45 000;
Mandatory for purchases of goods (individually or between related persons) from other EU countries exceeding €14,000;
Compulsory when buying services in the country from foreign persons (for which VAT must be calculated and paid);
Compulsory for supplies of services the place of supply of which is another Member State according to the criteria for determining the place of supply of services (except for services which are exempt from VAT or subject to a 0 % VAT rate in that other Member State);
Compulsory for foreign persons carrying out economic activities in Lithuania (simplified local small business (LSB) VAT registration may apply).
Filing a VAT return
By the 25th of the following month.
Presentation of the annual financial statements
30 days after financial reports are confirmed (latest date up to 30th of May).
Payment of corporation tax
Until 15 June next year.
Are all companies resident for tax purposes (regardless of management and control)?
YES
Possibility of obtaining an advance binding tax ruling?
