Private Limited Liability Company (UAB)
Uždaroji akcinė bendrovė
Company formation in Lithuania
The UAB is best suited for: Fintech startups seeking EU EMI or payment institution licences, Small companies qualifying for the 5% reduced corporate tax rate, Tech businesses wanting a Eurozone base with strong digital infrastructure, EU market entry for non-EU founders at a moderate cost, Companies in financial services, payments, and blockchain. Lithuania applies a standard corporate income tax rate of 15%. Small companies — defined as those with fewer than 10 employees and annual revenue under €300,000 — qualify for a reduced rate of 5% during the first year, and 5% in subsequent years if they continue to meet the criteria. Dividends paid to individual residents are taxed at 15%. Dividends to EU parent companies qualifying under the Parent-Subsidiary Directive are exempt from withholding tax. VAT is 21% (9% on heating, books, and certain other goods/services). Employer social security contributions are approximately 1.77% (Sodra) plus 0.16% guarantee fund, while employee contributions are approximately 19.5% (including pension, health insurance, and sickness). Lithuania has adopted the OECD's Pillar Two rules for large multinationals.
- Fintech startups seeking EU EMI or payment institution licences
- Small companies qualifying for the 5% reduced corporate tax rate
- Tech businesses wanting a Eurozone base with strong digital infrastructure
- EU market entry for non-EU founders at a moderate cost
- Companies in financial services, payments, and blockchain
Key Facts
Step-by-Step Formation Process
Reserve a company name
Check name availability through the Lithuanian Register of Legal Entities (Registrų centras) at registrucentras.lt. The name must be unique and comply with Lithuanian naming rules. Reservation is optional but recommended.
Prepare the articles of association and founding documents
Draft the articles of association (įstatai) specifying the company name, registered office, share capital, shareholder details, and management structure. For a single-founder UAB, a founding act is used instead. Documents must be in Lithuanian or accompanied by a certified translation.
Open a capital accumulation account and deposit share capital
Open a temporary capital accumulation account at a Lithuanian bank (SEB, Swedbank, Luminor, Šiaulių bankas) and deposit the full €2,500 minimum share capital. The bank issues a certificate confirming the deposit. Unlike Estonia, the capital cannot be deferred.
Notarise the founding documents
Have the articles of association and the founding act notarised by a Lithuanian notary. Non-residents can arrange this through a notary in their home country with an apostille, or grant a power of attorney to a Lithuanian representative.
Register with the Register of Legal Entities
Submit the notarised documents, capital deposit certificate, and registration form to the Centre of Registers (Registrų centras). Online registration is available for Lithuanian residents with a qualified electronic signature. The registration fee is approximately €53.
Register with the State Tax Inspectorate (VMI)
Register the company with the State Tax Inspectorate (Valstybinė mokesčių inspekcija) for corporate income tax, VAT (mandatory above €45,000 turnover; voluntary registration available), and payroll taxes. Apply for a VAT number if needed.
Open a business bank account
Convert the capital accumulation account to a regular business account or open a new account at a Lithuanian bank or EMI. Lithuania's strong fintech ecosystem means many digital banking options are available.
Required Documents
- Articles of association (įstatai) — notarised
- Founding act or minutes of the founders' meeting
- Bank certificate confirming share capital deposit of €2,500
- Passport or national ID copies of all founders and directors
- Proof of registered office address in Lithuania
- Power of attorney (if registering through a representative)
Cost Overview
Tax Treatment
Lithuania applies a standard corporate income tax rate of 15%. Small companies — defined as those with fewer than 10 employees and annual revenue under €300,000 — qualify for a reduced rate of 5% during the first year, and 5% in subsequent years if they continue to meet the criteria. Dividends paid to individual residents are taxed at 15%. Dividends to EU parent companies qualifying under the Parent-Subsidiary Directive are exempt from withholding tax. VAT is 21% (9% on heating, books, and certain other goods/services). Employer social security contributions are approximately 1.77% (Sodra) plus 0.16% guarantee fund, while employee contributions are approximately 19.5% (including pension, health insurance, and sickness). Lithuania has adopted the OECD's Pillar Two rules for large multinationals.
Pros & Cons
- 5% corporate tax rate for qualifying small companies (under €300,000 revenue, fewer than 10 employees)
- Full Eurozone membership — no currency conversion issues
- EU's leading fintech licensing hub with a supportive regulatory framework
- Full Schengen and EU single market access
- Fast company registration (3–5 business days)
- Competitive operating costs compared to Western European jurisdictions
- Strong tech talent pool and growing startup ecosystem
- Bank of Lithuania provides an efficient regulatory sandbox for fintech
- €2,500 minimum capital must be paid in full upfront — no deferral option
- Lithuanian language required for most official documents and filings
- Small domestic market (under 3 million population)
- Traditional banks can still be cautious with non-resident owned companies
- 15% standard corporate tax rate is higher than Bulgaria (10%) or Estonia's effective 0% on retained profits
- Social security contributions are relatively high (approximately 19.5% employer-side)
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Get StartedThis content is educational and does not constitute legal or tax advice. Always consult a qualified professional for your specific situation. Data last verified March 2026.