Lithuania ranks near the top in the EU for how quickly you can register a company digitally, and a 2026 tax reform actually broadened one of its most generous perks: a two-year 0% corporate tax holiday for new small companies. Here's what it takes to start a business in Lithuania in 2026.
1. Which business structure fits you?
Before you register anything, it helps to know what you're actually choosing between.
- IĮ (Individuali įmonė). A sole proprietorship, no share capital required, but unlimited personal liability.
- MB (Mažoji bendrija). A Small Partnership, with just €1 in minimum capital and no mandatory director, popular with freelancers and small teams. Members must be natural persons, capped at 10, but liability is limited, similar to a UAB.
- UAB (Uždaroji akcinė bendrovė). Lithuania's standard private limited liability company. Minimum share capital was cut to €1,000 in May 2023, with at least 25% paid in prior to registration.
2. Register your business
Registration goes through the State Enterprise Centre of Registers (Registrų centras). A UAB typically registers within about 3 business days, with full setup including bank and tax registration taking 7 to 15 working days; an MB can be set up for roughly €750 in 5 to 10 business days. Foreign founders can own and manage a Lithuanian company entirely remotely, with no physical presence required, though documents often need notarization and Lithuanian translation.
3. Register with the State Tax Inspectorate
Tax registration with the State Tax Inspectorate (VMI) happens as part of company formation, and VAT registration is handled as a related, separate step if it applies to you.
4. Check licenses and permits
Lithuania doesn't issue a single national business license. What you need depends on your industry; financial services, e-commerce, and other regulated activities carry their own permits, and Lithuania is a notable hub for fintech licensing in the Baltic region.
5. Understand Lithuanian taxes
Standard corporate income tax rose to 17% for 2026 (up from 16%) under the country's latest tax reform. Small taxpayers, companies with revenue under €300,000 and fewer than 10 employees, pay a reduced 7% rate (up from 6% as of January 1, 2026). Newly registered small companies get an even better deal: 0% corporate tax for their first two tax periods, provided revenue stays under €300,000. The 2026 reform actually broadened this holiday by removing the previous 10-employee cap, opening it to more businesses than before.
Lithuania also offers one of the more generous R&D incentives in the EU: qualifying research and development expenses can be deducted at 300%, meaning every €1 spent on eligible R&D reduces taxable income by €3.
VAT is 21% standard, with a 12% reduced rate (changed from 9% as of January 1, 2026) covering things like accommodation and passenger transport, and a 5% super-reduced rate for specific categories. Registration is mandatory once turnover exceeds €45,000 over the prior 12 months.
6. Stay compliant
A UAB carries a recurring director social tax, roughly €300 to €350 a month, that doesn't apply to an MB, since an MB has no mandatory director. VAT-registered businesses file returns on their assigned schedule, and companies keep standard financial records for tax and Commercial Register purposes.
Lithuania business costs at a glance
| Item | Cost |
|---|---|
| MB formation | ~€750 |
| UAB minimum share capital | €1,000 (25% paid in) |
| MB minimum capital | €1 |
| Corporate tax, standard (2026) | 17% |
| Corporate tax, small taxpayer (under €300K revenue) | 7% |
| Corporate tax, new small company (first 2 years) | 0% |
| VAT, standard rate | 21% |
| VAT registration threshold | €45,000 turnover |
Frequently asked questions
What's the corporate tax rate in Lithuania?
17% standard for 2026, reduced to 7% for small taxpayers with revenue under €300,000 and fewer than 10 employees, and 0% for newly registered small companies in their first two tax periods.
How much capital do I need to start a UAB in Lithuania?
€1,000 minimum, with at least 25% paid in prior to registration.
How much does it cost to form an MB in Lithuania?
Roughly €750, with just €1 in minimum capital and no mandatory director.
When do I need to register for VAT in Lithuania?
Once turnover exceeds €45,000 over the prior 12 months. The standard VAT rate is 21%.
Can a foreigner register a company in Lithuania remotely?
Yes. Foreign founders can own and manage a Lithuanian company entirely remotely, with no physical presence required, though documents often need notarization and Lithuanian translation.
Fees and rates above come from the State Enterprise Centre of Registers and the State Tax Inspectorate (VMI) as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to a Lithuania-qualified accountant or lawyer about your specific situation.