In 1990 it was Lithuania to be the first of the Soviet Republics to declare its independence and in 2004 Lithuania has joined NATO and the EU. In 2009 Lithuania celebrates the millennium of the existence of its name.

The country practices a semi-presidential political system, and it is one of the fastest growing countries among new members of the EU. Most of its commerce is conducted with countries of the EU. Its economic activity is based on biotechnology, laser equipment and informational technologies, as well as tourism.

Its national currency is Litas (Lt, LTL).

Geography

The landscape of Lithuania has been significantly influenced by glaciers. Aukstojas Hill (around 294 m) is the highest point of the country, to the territory of which mixed-forests and numerous lakes are very characteristic. It is considered that Vilnius, the capital of Lithuania, is situated almost in the very centre of the geographical centre of Europe.

Lithuania has almost a 100 km sand coast line, of which only 38 km face the open Baltic sea shore directly. Neman is the country’s main river.

The climate of Lithuania includes elements of maritime and continental types of climate. Winters are cold while summers are mild and wet.

Map, Flag and Coat of Arms

Types of Company

Agricultural Company (ZUB)

At least a half of the company income should be generate from agricultural activities and the company’s liability does not exceed its capital.

Limited Liability Company (UAB)

At least one shareholder is an obligatory requirement to form a company but the number of shareholders must not exceed 100. The minimum share capital is of 10,000 Lt that can be submitted in money form or other assets indicated in regulations. The liability of each shareholder is limited to the capital invested.

Public Limited Liability Company (AB

At least one shareholder forms a company but there is no limit to the maximum number of shareholders of a public company. The minimum capital for incorporating such a company is of 150,000 Lt, and shares of the company can be offered to the public. A board of directors or a supervisory council must be appointed, and the accounts of the company must be audited.

General Partnership

At least two partners should join to work together under a common name, the liability at least of one of the partners correspond to all its assets.

Limited Partnership

Two or more partners should establish a partnership, in which at least one partner should have a limited liability that is equivalent to the assets invested in the organization.

Branch and Representative Office

Foreign companies can establish their branch or representative office in Lithuania that will follow local companies regulations

Sole Proprietorship

A structure owned by one person without limited liability status and without a corporation. This company is easier and faster to incorporate in comparison to other structures as well as it has relatively low start-up costs. However, it is hard to raise capital with this structure and a person is fully liable for the business performance.

Taxation

Private

A resident of Lithuania is liable to income tax on earnings made in Lithuania and worldwide, while non-residents pay income tax only on the earnings generated on the territory of the country. A resident of Lithuania is a person who spends at least 183 days in Lithuania or has home there that is the person’s permanent living place (even if he/she is there less than 183 days a year).

An employer deducts directly the tax and national insurance from the salary of an employee on a monthly basis. An employee pays taxes at a rate of 24%, but a self-employed person is liable for 15% tax. Personal capital gain tax is 15%.

Corporate

A standard rate of a corporate income tax is 15%, but smaller companies with less than 10 people employed and a limited annual turnover are liable to a 13% tax. Income from dividends paid to another Lithuanian company is exempt from the tax. Capital gains are added to the income.
There are tax deductions on dividends, interests rates and royalties on patents at different rates according to each case in particular