If you want to do business in Lithuania, reading this will help you becoming knowlegeable on the specific tax laws and rates for a LLC which is the most common company structure in Lithuania.
Lithuania taxes corporate income on a worldwide basis. The established estimated tax rate for offshore income, from our research, and these things do change, is 15%. However, income derived from a P.E. established in a EEA country or in a country where Lithuana has concluded a tax treaty with, may be exempted from corporate income tax. Taxes are very reasonable in Lithuania as the CIT standard rate is 15%. This ranks Lithuania as 47th overall with regards to corporate tax rate worldwide.
The VAT rate in Lithuania is 21.00%, that ranks Lithuania as 155th overall in terms of VAT globally. In terms of other taxation, an employer will contribute 32.1% to the equivalent of a social security fund and an employee will contribute 9%. The overall complexity of the tax system is medium. This is measured by average time to comply with a country's labor tax requirements is as it is 85hours. Contributing to this is the number of yearly labor tax payments, which is 1 in LT.
Thin capitalisation restrictions are officially enacted. Thin capitalisation refers to any sort of laws on a business and the debt-to-asset ratios. Dividends received may be subject to corporate income tax and taxed at 15% rate. Dividends may be exempt if the recipient holds at least 10% of shares of the subsidiary. Dividends are a distribution of a portion of a company's earnings, passed by the board of directors, to shareholders. Dividends can be one of the following stock, cash, or property. Capital Gains are included in CIT and taxed at a flat rate of 15%. Exemptions may apply for gains of the disposal of shares, if shareholder holds at least 10% of participation of a subsidiary. A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.
The interest withholding tax rate is estimated at 10%. This means that the taxman expects companies to withhold 10% of payments on interests to non-residents. The dividends withholding tax rate is 15%. This should be interpreted that usually the taxman expects companies to pay 15% tax of dividends remitted abroad. The royalties withholding tax rate is 10%. This means that the tax authorities expects legal entities to withhold 10% of payments abroad on royalties. Withholding taxes may be reduced under a tax treaty.
There is no known tax on wealth in Lithuania. There are real property and inheritance taxes in Lithuania. There are widely used research and development tax incentives in this country.
The above is not tax or legal advice for your company's particular tax obligations. We are able to point you to a lawyer in Lithuania who can answer all your questions. Contact us today. Click incorporate now if you are in a hurry, or press the free consultation button above.
It takes approximately 32 hours to file and prepare documents for a Lithuania Civil Law (Dutch).
The corporate tax is approximately 15% which is 48 in the world.
Owners of a company in Lithuania are not allowed to carry back a loss and may be allowed to carry forward a loss for 100 years.
The vat rate in Lithuania is 21% which ranks 155 in the world.
The underlying legal code in Lithuania is civil law (dutch) law. You will want to get some local advice as to how to best structure a company in Lithuania. E-signatures are allowed.
The letters LT is for Lithuania and the most common legal entity type in Lithuania is a LLC.
The amount you'll have to wait is about 3 weeks to incorporate a LLC in LT. The minimal capitalization, or amount you're expected to put into a bank, is 0, This means you don't have any minimum share capital. The types of cash you can use to setup your business is frequently EUR and any legal tender.
Yes, one is allowed to re-domicile a LLC from LT. You are usually allowed to change the jurisdiction of the company, pending certain procedures.
There must be at least 1 shareholder. This makes it possible for you to own a LLC in LT by yourself. Corporate Shareholders are encouraged, which means you can have a corporate shareholder. Foreign ownership is encouraged, up to 100% of the ownership of the LLC.
A legal entity is only required to have 1 director on the board. Furthermore, corporate directors are not permitted. Directors are disclosed publicly. There is a body of law which requires companies to hold an annual meetings of shareholders.
A registered office is a requirement, whom the company will pay yearly, for an address which can receive any official legal correspondance on behalf of the company. Furthermore, a company secretary is another cost you will need to incur.
There is an On that note, there is oftentimes a requirement to have these accounts audited.
Thin capitalization rules are not in effect.
A corporate director is not permitted, meaning this country is not a good option if you are setting up a structure where you want to protect director liability.
The directors are disclosed in the public registry of Lithuania, Baltic Legal. Shareholders are disclosed in the Baltic Legal.
Typically companies take 3 weeks to setup and there are 1 director(s) required and 1 shareholder(s) required at the time of incorporation.
Overall we think Lithuania is a good option and have given it a score of 70 as an IO score, using the Incorporations.IO proprietary formula.
We can help you form a company in Lithuania. Click the button above for a no-obligation quote. We will provide you with all the necessary documents to open a bank account as well as a registered office in Lithuania, which is required by law.
