Lithuania

A
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H
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- Ireland
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P
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Company formation in Lithuania. Temporary and Permanent residence permit in Lithuania.

As of January 2008 Lithuania has become the part of the Schengen Area, a group of twenty-five European countries which have abolished all border controls between each other. Since then the interim work and residence permittees of this country have the right to travel over Europe visa-free. Consequently, there has been a growing demand in company formation and immigration services in recent years.

Company Express is a leading provider of company formation services in Lithuania. Our list includes all types of business entities:

Individual (Personal) Enterprise;
Lithuania Private Limited Liability Company (UAB);
Lithuania Public Limited Liability Company (AB);
Lithuania General Partnership (TUB);
Lithuania Limited Partnership (KUB);
Lithuania Branches and Representative Offices.

Like in other European countries Lithuania has legislation that governs the terms and provisions of business immigration for the foreigners who are willing to set up an entity and therefore to be engaged in lawful business activity in the country.
The term business immigration refers to the formation of the company in Lithuania and obtaining a temporary residence permit that has to be revalidated each year within 5 year period till a person acquires permanent residentship in Lithuania and correspondingly in Europe.
Furthermore, being a resident and a company owner a foreign person acquires the right to purchase immovable property and estate in land.
Company Express provides assistance to the clients in finding and purchasing real estate in Lithuania.

The necessary paperwork and incorporation procedure usually takes up to 20 working days.
An application for temporary residence permit is being prepared and filed with the immigration authorities within 5 working days.
On the basis of our experience, it takes to immigration authorities from 3 up to 6 months to grant residence permit. Half a year is a legal time limit; however the law does not set up the minimum time period to make a decision.
Temporary residentship is termed for 5 years without breaks and after it an alien will be able to become a legal resident of Lithuania on permanent basis.

Visits to Lithuania in order to apply for interim residence permit:

An applicant will have to visit Lithuania twice. During the first visit all the documents related to new company formation must be signed in person before a Lithuanian notary. As the procedure goes a client will have to credit a saving account of the company with paid-in capital. The legal minimum amount of share capital of Lithuanian private limited liability company is 10,000 Lithuanian litas (official course 3,4528 litas per 1 euro). On the whole, the first visit will last up to 3 days if a client takes an option to credit the company’s account with cash.
The second two-day visit schedule includes in-person application for residence permit at the immigration office. The deadline for receipt of temporary residence permit for the first time is ranging from 3 to 6 months; subsequent extension of temporary residence permit can be implemented in the period from 2 to 3 months.

It ought to be remembered that granting temporary or permanent residence permit is the exclusive prerogative of the State. This general rule is applied worldwide.

The cost of registration of the company in Lithuania for natural persons is 1000 Euros; term of execution is 20 working days. This includes fees for our company, as well as all costs associated with the registration of the enterprise. Additional costs associated with finding legal address are not included. The cost of domicile in Lithuania is ranging from 200 to 350 Euros. The residence permit application paperwork costs3000 Euros for one adult person.

The tax system of the Republic of Lithuania. Free economic zones

Exercising economic activity in the territory of Lithuania, individuals or business entities regardless of the origin of their capital are subject to the following major taxes:

VAT – 21 %
Corporation tax – 20 %
Dividend tax – 20 % + 6 % = 26 %
Compulsory heath insurance – 6 %
Real estate tax – 1 %

Wage taxes:

Social insurance (of employee) – 3 %
Social insurance (of employer) – 30.98 %
Citizen income tax – 15 %
Compulsory health insurance – 6 %
Guarantee fund income – 0.1 %

Other taxes:

Environmental pollution tax;
Packaging tax;
Advance corporation tax;
Tax for state natural resources;
Etc.

Free Economic zones

There are two economic zones in Lithuania: in Kaunas and in Klaipeda. The legal existence of these zones will last till the year of 2019. In Klaipeda the free zone range is 200 hectares and in Kaunas its range is 500 hectares. To obtain a work permit in free economic zone a company shall invest a minimum of 1,000,000 Euros (this means that the capitalization of business (assets and turnover) shall be not less than 1 million Euros). The company (Investor) shall be deemed tax exempt during the first 6 years of work, and the land tax will be 50%.

In the free zones are being promoted the following types of business: the supply of gas, water and electricity; construction; retail and wholesale trade; hotel and restaurant business; logistics; real estate business; education; health care; publishing services; manufacture of tobacco products.

More information on Lithuanian companies, see here