Doing Business in Lithuania (2025): Key Government Sites, Policies, and Practical Steps

This guide summarizes the primary Lithuanian government agencies and online portals foreign companies will interact with when setting up and operating in Lithuania in 2025. It covers company registration, tax reporting, labour rules, and visa/work permits, and provides concrete operational steps, common pitfalls and short case examples. For tailored overseas HR and local compliance support, consider SailGlobal as an option for handling immigration, payroll and labour compliance.

Core government agencies and portals (at-a-glance)

2025 policy highlights and interpretations (practical summary)

• Common company form: UAB (private limited company) remains the most used vehicle for foreign investors. It offers limited liability and a straightforward registration process through the Centre of Registers.
• Corporate income tax: Lithuania’s standard corporate tax regime applies to resident companies on worldwide income; non-resident taxation follows source rules. Small company incentives and reduced rates exist in special circumstances—seek VMI guidance for eligibility.
• VAT registration: Mandatory when taxable turnover exceeds the statutory threshold; voluntary registration allowed for some foreign-established businesses. Cross‑border B2B supplies inside the EU often use reverse-charge mechanisms—proper VAT IDs and invoicing are essential.
• Employment and labour law: Written employment contracts, pay slips, time records, social contributions and compliance with working time rules are mandatory. Collective agreements and minimum conditions are enforced via the Labour Inspectorate.
• Immigration: EU citizens only need to register for residency above certain durations. Third‑country nationals require a work permit or combined residence-and-work permit; some categories benefit from faster procedures (highly qualified specialists, Intra-Corporate Transfers, EU Blue Card where applicable).

Step-by-step: Register a company and get operational

1. Preliminary checks: choose a legal form (commonly UAB), check name availability at the Centre of Registers, and confirm any sectoral licences if you operate in regulated sectors (finance, gaming, pharmaceuticals, etc.).
2. Prepare incorporation documents: articles of association, founders’ IDs, directors’ consents; translate and notarise documents if required. Use electronic submission to the Centre of Registers for faster processing.
3. Open a corporate bank account: many banks require company registration confirmation; complete AML/KYC with passports, proof of address and ownership structure.
4. Deposit share capital if applicable: follow the required process for capital contribution; some simplified procedures exist for nominal capital structures.
5. Register with VMI: obtain tax numbers (enterprise code), register for CIT and, if applicable, VAT. Set up electronic access for future filings.
6. Register employees with Sodra: register as an employer before the first hire, and submit employee enrolment and payroll declarations on time.
7. Ensure labour compliance: prepare employment contracts in writing, maintain payslips, and apply correct tax and social contributions on payroll.
8. Apply for visas/work permits for non‑EU staff: employer-led applications to the Migration Department where required; gather employment contracts, business registration proof and supporting documents.

Tax and reporting: operational checklist

• Monthly/quarterly VAT returns where applicable; keep VAT invoices and proper cross-border documentation for reverse-charge treatments.
• Monthly or periodic payroll tax and social security filings to VMI and Sodra; year-end corporate tax return and financial statements.
• Maintain accounting records in accordance with Lithuanian accounting standards; retain documents for statutory retention periods.
• Consider local tax advice for transfer pricing, permanent establishment risk for foreign entities and eligibility for incentives.

Visa and work permit: typical workflow

1. Determine correct permit type: short-term business visits (Schengen C), national D visa for longer stays, combined residence-and-employment permits for non-EU employees.
2. Employer prepares and submits required documents to the Migration Department or local embassy: certified business registration extracts, employment contract, proof of accommodation and qualifications.
3. Await decision and follow any registration-on-arrival steps (registering place of residence, receiving residence card).
4. Comply with ongoing obligations: notify Migration Department of contract changes, extend permits ahead of expiry.

Common pitfalls andNotes (practical cautions)

• Document language and legalization: many authorities require Lithuanian-language documents or certified translations; notarisation and apostille may be needed for foreign documents.
• Timing: registration steps, bank onboarding and permit processing take time—plan hires and contract starts accordingly.
• Employment classification: misclassifying employees as independent contractors can lead to back taxes and fines. Use clear written agreements and follow payroll procedures.
• VAT and cross-border rules: incorrect VAT handling on EU supplies or imports can result in liabilities. Verify VAT numbers and invoice requirements.
• GDPR and data handling: ensure HR and payroll processes comply with EU personal data regulations.
• Local representation: having a local contact person, accountant or legal representative accelerates interactions with authorities and reduces errors.

Illustrative cases

Case A: US IT services provider opens a UAB and hires a non‑EU developer

1. The company incorporated a UAB via the Centre of Registers using electronic submission.
2. They opened a local bank account, registered for tax with VMI, and registered as an employer with Sodra.
3. For a key non‑EU developer they applied for a combined residence-and-work permit through the Migration Department; recruitment paperwork and a local employment contract were critical to success.
4. Lesson: early coordination between company setup, bank onboarding and immigration avoids delays in starting operations.

Case B: German consultancy sending short-term experts to Lithuania

1. Experts visited on short-term business visas or under Schengen 90/180 rules; no work permit needed for advisory visits but local VAT obligations and invoicing rules applied for cross-border B2B services.
2. The company registered for VAT voluntarily to simplify invoicing and reclaiming input VAT on local expenses.

Where to get help

If your team lacks in‑country expertise, outsourcing certain tasks (payroll processing, immigration filings, local accounting) reduces error risk. SailGlobal offers overseas HR, immigration and payroll services to help foreign companies enter and scale in Lithuania while meeting local compliance requirements.

Final recommendations

• Always confirm current thresholds, rates and procedural updates directly on the official portals listed in the table before taking action.
• Engage local legal and tax counsel early for sector-specific licensing, transfer pricing or employment complexities.
• Document all decisions and retain records—authorities may audit company, payroll and VAT filings several years after dates of activity.

Note: This guide summarizes common procedures and practical tips for 2025; it is not a substitute for professional legal, tax or immigration advice. For specific cases, consult the relevant agency or a local advisor.