UAB (Lithuanian: Uždaroji akcinė bendrovė) or closed joint stock company is the most common form of business in the Republic of Lithuania. 9 out of 10 companies are registered as a closed joint stock company in Lithuania. The reasons are many: from the ease of organising a business to an acceptable taxation level.
If you want to register a UAB company and are interested in general peculiarities, then we hope our article will help you understand the registration matters in more detail. Here we’re answering 10 popular questions about registration and running a UAB in Lithuania.
May a non-resident of Lithuania open a UAB?
Yes, citizens of other countries can be founders, shareholders and directors of a CJSC. Also, such an enterprise can be founded by another legal entity.
How many shareholders shall UAB (Lithuania) have?
UAB can be established by one or more natural or legal persons. A crucial point is that the number of shareholders shall not exceed 250.
What documents does the legal entity need to register UAB?
As a rule, if another company is the founder of the enterprise, the following information and documents shall be provided to the Registration Centre to register a UAB:
Written decision of the General Meeting of Shareholders and the Director to open a UAB enterprise in the Republic of Lithuania. The decision shall be notarized.- A copy of the founder’s certificate of registration;
- Company charter;
- Notarized permission to represent the interests of the company for those who have the right to do so by decision of the Meeting of Shareholders;
- Company name in several variants. It is important to use Latin letters only. Numbers and capital letters are also allowed.
- Also, when filling out the registration forms, it is necessary to indicate the types of enterprise activities selected in the cadastre, as well as its legal address and physical address if the actual and the legal location differ.
- The registration forms also require to indicate the full name of the director of the company, his/her registration address, passport number and a copy of passport.
- A document with the name of the parent company, including the registered address and company registration number.
- If, in addition to the founder, a closed joint stock company in Lithuania has individual shareholders, then their data (full name, passport number, registration address) shall be indicated in the registration forms.
All papers in the country are filled out in Lithuanian, even if the company is founded by a foreign citizen. Also, before submitting documents to the Registration Centre, you have to open a growth account in the bank and transfer the authorized capital.
What documents does the natural entity need to register UAB?
To establish a UAB in Lithuania, an individual shall prepare a set of papers and fill out registration forms that include:
- Company name in several variants. It is important to use Latin letters only. Numbers and capital letters are also allowed.
- The types of enterprise activities selected in the cadastre, as well as its legal address and physical address if the actual and the legal location differ.
- Full name of the director of the company, his/her registration address, passport number and a copy of passport.
- Information about shareholders, including first and last names, passport numbers, registration addresses.
If the founder of the company is about to submit registration documents using third party services, the general list has to include a notarized permission to register the company on his/her behalf, issued to a third party.
Also, before submitting documents to the Registration Centre, you have to open a growth account in the bank and transfer the authorized capital.
How long does it take to register a UAB in Lithuania and how does it work?
As a rule, the procedure for registering a UAB takes 3~6 working days from the date when the necessary papers were prepared.
The process of registering a CJSC looks like this: filling out registration forms, preparing constituent documents, opening an account in one of the country banks, transferring the authorized capital, notarizing prepared documents, submitting registration documents to the authority.
What is the minimum amount of the UAB authorized capital in Lithuania?
The authorized capital of a UAB in the Republic of Lithuania has to be at least EUR 2,500. This is the minimum amount that must be deposited to the growth account in a bank when registering a company in the country. This is a relatively small amount, considering the policy regarding CJSC companies in other EU countries. For example, in Germany the minimum authorized capital for such enterprises is EUR 25,000, while in the UK, GBP 50,000.
In Lithuania, if the authorized capital of the company is more than the minimum, it can be contributed both in cash and in property equivalent. For this, an external valuator evaluates the property to be attributed to the authorized capital.
Do I need to come to Lithuania to register a UAB if the founder is the natural person?
Not necessary, since you can register a company in Lithuania both independently and by power of attorney. For example, by issuing a power of attorney for an employee of a law firm that will deal with all registration issues.
What taxes UAB has to pay?
Depending on the type of activity, the company might pay the following taxes in Lithuania:
- Income tax, which is paid once a year and usually makes 5% for small businesses and 15% for others;
- 15% dividend tax;
- 21% value added tax if the company is a VAT payer;
- Taxes to government funds for employees.
Is it mandatory to register VAT number when starting a UAB?
No, it is not, because registration of a UAB in Lithuania does not always provide for the payment of VAT. Your company is considered a VAT payer in Lithuania if it has sold goods or services in the amount of more than EUR 45,000 during the year, has bought goods in other EU countries for more than EUR 14,500 or has a foreign registration but sells goods or services in Lithuania.
What is better to register: UAB or MB (small partnership)?
Like UAB, MB is a closed limited liability company. Such company can use property as its authorized capital. Unlike a closed joint stock company, small partnerships have a preferential income tax rate of 5%, provided that the company’s annual turnover is not more than LTL 1 million, and the team has more than 10 employees. Only individuals can establish small partnerships. So consider these when choosing between a UAB and MB institution.
We hope you found this article helpful. If you still have questions or wish to register, re-register or buy a UAB in Lithuania, Lano Solutions is ready to provide comprehensive legal support in resolving your issue.
Our team of professional lawyers and accountants is ready to advise you, as well as deal with all issues related to the preparation, drafting and submission of documents to the Registration Centre for further establishment of your company.
Since 2012, we have been dealing with the registration of a UAB in Lithuania and the EU countries. Our recent achievements:
- Registration and legal support of a company that develops computer and mobile games. The company’s turnover is over EUR 5 million per year.
- Comprehensive support in the sale and purchase transaction of a company from Lithuania, which owns a complex of real estate in the Republic of Lithuania and two other countries.
Years of experience and diversified legal and economic expertise allow us to help open a UAB in Lithuania with minimum bureaucracy. We successfully resolve tasks because our success drives the success of our clients.