COMPANY REGISTRATION IN LITHUANIA
Although the procedure to establish a business in Lithuania is quite straightforward, the help of experienced lawyers and specialists is needed. Throughout the years, we have helped hundreds of companies to settle in Lithuania.
At Leinonen, we offer high-quality accounting, financial, tax and legal services, enabling clients to focus on their core business. Therefore, we try to simplify even more the process of opening a business in Lithuania by talking our clients through the steps required by respectful authorities.
Leinonen team provides support when selecting which establishment form would be the most suitable for you (e.g., limited liability company, branch, etc.). It should be noted that the company’s activity in Lithuania may not require the establishment of the company, i.e. tax registration for VAT, payroll, or corporate income tax purposes may be sufficient.
Contact one of our experienced team members for further information regarding opening a company in Lithuania, as well as registering a legal address in the country.
TAXATION IN LITHUANIA
Lithuania is a business-friendly country. In addition to the stress-free procedure of opening a business in the country. From the 2026 tax year, the standard corporate income tax (hereinafter – CIT) is increased up to 17% (in 2025 the rate was 16%) and the reduced CIT is increased up to 7% (in 2025 the rate was 6%). In addition, if a company covers specific requirements, there may be no tax applied in the first two years of operation!
Moreover, from 2026, instant depreciation was introduced for certain asset groups (i.e., the acquisition price is immediately recognized as an expense when the asset is put into use) if the fixed asset is used in the company’s activity for at least 3 years.
Furthermore, the current VAT rate in Lithuania is 21%, although, in a few cases, there are reductions which apply to:
- accommodation, passenger transport, visiting art and cultural institutions and events (from 2026 VAT rate is 12%);
- printed and electronic books and non-periodical information publications (from 2026, VAT rate is reduced from 9% to 5%);
- technical aid devices and their repair services for the disabled, drugs and medical aid devices, as well as food products for special medical purposes, where they are all compensated by the state (under certain conditions), not compensated prescription drugs (5% VAT rate);
- goods supplied as humanitarian aid and exported from the European Union (EU) (from 2026, VAT rate is 0%).
Reduced VAT rates might also be applicable to other goods and services provided in the legislation.
Also, from 2026, a new tax is being introduced on contributions for non-life insurance contracts. Insurance companies operating in Lithuania will have to calculate and pay the tax. The tax rate is 10%. The exemption applies to contributions for compulsory drivers’ civil liability insurance contracts concluded with individuals for vehicles that are not used for economic activity.
If you want to find out more regarding taxation and/or requirements for tax reduction, contact one of our experienced tax specialists.
PAYROLL IN LITHUANIA
Lithuanian labor laws apply to foreign nationals and foreign businesses in the same manner as to domestic entities. That is why the country hosts thousands of international companies. However, the need of experienced payroll specialist is present as there are specifications relevant to the legislation in the country. Therefore, at Leinonen, we offer consultations regarding payroll details relevant to Lithuanian law.
It is important to note that in Lithuania, in addition to the standard income tax of 20% (or progressive up to 32%), there is also a social security contribution of 19.50% paid by the employee and 1,77% paid by the employer, as well as additional reductions such as pension funds.
Contact our experienced team if you wish to know more about the details regarding payroll in Lithuania.
BEING AN EXPAT
As Lithuania is a member of the EU, travelling and working in the country has been made easier for EU citizens. However, certain migration documentation might be required if an individual wishes to reside in the country for longer periods.
Most of the workers reside in Vilnius and Kaunas, which are the most developed districts in Lithuania. The living costs in the country are very low compared to other countries in EU, therefore Lithuania is a popular destination for expats.
If you wish to find out more about laws and regulations for expats in Lithuania, contact a member of our experienced team.
ACCOUNTING IN LITHUANIA
Accounting in Lithuania is regulated according to the following legal acts:
- Accounting Law of the Republic of Lithuania;
- Business Accounting Standards or International Accounting Standards;
- Law on Company Financial Statements of the Republic of Lithuania;
- other legislation governing accounting and financial statements.
An employed accountant or a company providing accounting services is responsible for the accuracy of accounting entries. It is important to note that all accounting records shall be supported by accounting documents (invoices, cheques, etc.). In addition, there are regulations that require specific documentation to be archived for 10 to 50 years. Therefore, having a reliable and experienced accountant is an essential part of any business.
Leinonen competitive advantage is the personal connection. We understand that accounting is a very important part of the business, therefore we are reachable and we can provide knowledgeable support at any time.
Contact one of our experienced accountants for more details related to accounting processes in Lithuania.
INTERESTING FACTS ABOUT LITHUANIA
- Lithuania remains a committed member of both the European Union and the Eurozone, offering a predictable regulatory environment and seamless access to the European Single Market. This stability continues to attract foreign investors and international companies.
- Situated at the crossroads of Northern and Eastern Europe, Lithuania offers strategic access to both EU markets and Eastern Europe. Its modern transport infrastructure and advanced digital networks reinforce its role as a regional hub.
- Lithuania has a highly educated workforce, with strong expertise in IT, engineering, fintech, and finance. Also, a growing pool of specialists in cybersecurity, AI, and financial technologies.
- Many Lithuanians are multilingual, with English widely spoken among younger generations and Russian still common across the population, and other languages.
- Lithuania continues to be recognized for its efficient, digital‑driven public services and business‑friendly climate.
- Lithuania’s GDP grew by approximately 2.7% in 2025, showing resilience in a challenging economic environment. Economic forecasts from European and international institutions project steady growth between 2.5% and 3.4% in 2026.
- In 2025, over 50% of Lithuania’s energy consumption was sourced from renewable energy, creating opportunities in the renewable energy sector.
