Company formation in Lithuania usually means a UAB, a private limited company with at least €1,000 of share capital, registered with the Register of Legal Entities run by the State Enterprise Centre of Registers (Registrų centras). Foreigners can own one. From 1 January 2026 the standard corporate tax rate is 17%, while qualifying new small companies pay 0% for their first two tax periods and 7% after that.
Last checked: October 2026
In short:
- A UAB needs €1,000 minimum capital (cut from €2,500 in 2023), and a small partnership (MB) has no statutory minimum but can only have up to 10 individual members.
- Corporate tax rose from 15% to 16% in 2025 and to 17% in 2026; the small-company rate went from 5% to 6% and then 7%, with 0% for the first two tax periods of qualifying new companies.
- Lithuanian e-residency costs a €90 state fee and gives you a digital signature, but it is not a full remote company-and-bank package like Estonia’s.
Corporate tax: what changed in 2025 and 2026
Lithuania raised corporate income tax twice in two years to fund its State Defence Fund. If a formation guide quotes 15% and 5%, it is two years out of date.
| Rate | 2024 | 2025 | From 1 January 2026 |
|---|---|---|---|
| Standard corporate income tax | 15% | 16% | 17% |
| Small company reduced rate | 5% | 6% | 7% |
| New qualifying small company | 0% in the first tax period | 0% in the first tax period | 0% in the first and second tax periods |
Sources: Walless (2025 change), KPMG and PwC (2026 rates), KPMG Tax Card 2026. Dividend taxes are covered further down.
KPMG says the 2026 amendments also:
- extended the 0% rate to a new company’s first and second tax periods (previously only the first);
- removed the old 10-employee cap for small-entity status;
- kept the revenue test: annual revenue must not exceed €300,000.
Accountancy firm Ecovis lists the other conditions for the 0% start-up rate. The owners must be natural persons. First-period income must not exceed €300,000. Shares must not be transferred to new participants for three consecutive tax periods. The relief does not apply if the same person holds more than 50% of another entity. If you plan to own the UAB through a holding company, or you already control another company, check this carefully. The 0% rate is not automatic.
The 7% reduced rate also applies to some income from patented inventions and copyright-protected software under conditions, according to PwC. That is a separate relief from the small-company rate.
UAB or MB: which legal form
The Innovation Agency (Inovacijų agentūra), Lithuania’s point of single contact for businesses, compares the main forms.
| Feature | UAB (private limited company) | MB (small partnership) |
|---|---|---|
| Minimum capital | €1,000 | Not specified |
| Owners | Unlimited; individuals and companies | Up to 10 natural persons only (one is fine) |
| Liability | Limited | Limited |
| Management | Shareholders’ meeting plus a single head (CEO) on an employment contract; optional board | Members’ meeting, or a head appointed under a civil contract |
| Accounting | Full standards | Simplified |
On the capital. Some sites say the UAB minimum fell to €1,000 in 2025. Law firm Fondia and Mercator both report that the cut from €2,500 to €1,000 took effect in 2023 (Fondia says 1 May, Mercator says 1 June). Either way, €1,000 is current.
Choosing. An MB suits one to ten individual founders who want light accounting and no capital requirement. A UAB is the default when you need a corporate shareholder, outside investors, or a structure that banks and investors already know. Because MB members must be individuals, you cannot put an MB under a holding company. If a holding structure is part of the plan, read our holding company guide first.
How registration works
Invest Lithuania, the national investment agency, describes the standard notarial route for a UAB:
| Step | Typical time | Approximate fee |
|---|---|---|
| Name reservation (optional, holds the name for 6 months) | 1 day | About €16 |
| Notarisation of founding documents | 1-2 days | About €85-338, depending on share capital |
| Registration with the Register of Legal Entities | Up to 3 business days | About €32 |
Invest Lithuania describes paying the share capital into a temporary “accumulative” bank account first, which the bank then converts into a normal settlement account. It says that conversion takes 2-7 days depending on the bank. These are the agency’s approximate figures; we could not open the Registry Centre’s own fee table, so confirm current fees before filing.
Online. The Registry Centre also lets founders file electronically, which avoids the notary visit. To do that you need a recognised electronic signature. This is where Lithuanian e-residency is meant to help.
Lithuanian e-residency in 2026
Lithuania launched its own e-residency scheme in January 2021, after the Seimas passed the legislation in 2019 (ERR News).
| Item | Detail |
|---|---|
| State fee | €90 for the e-residence card including certificate and e-signature (Migration Department, payment code 5740) |
| External service provider fee | €80 per person where you use the provider abroad |
| Service locations abroad | 21 countries listed by the Migration Department |
| Validity | Three years, renewable (e-Residency of Estonia comparison) |
What it gives you is a Lithuanian digital identity for government e-services and for signing documents. Estonia’s e-Residency programme published a comparison, updated in May 2026, and its view is blunt. It says a Lithuanian card “simply grants a foreigner the ability to log into the government’s e-services portal and use digital signatures”, and that Lithuania has no dedicated e-residency team or service-provider ecosystem. Bear in mind that this comes from a competing programme. It also says you must travel to Lithuania to apply and collect the card, but the Migration Department now lists service locations in 21 countries. Nothing we read suggests e-residency comes with a bank account.
E-residency is not a visa and not tax residence. It does not let you live in Lithuania and it does not change where you pay personal tax.
Dividends and getting money out
Profit taken out of a UAB as dividends is taxed twice: once in the company, then in the hands of the shareholder.
- Individuals. PwC says dividends are taxed at a flat 15% in Lithuania, outside the new progressive scale.
- Foreign corporate shareholders. PwC says the domestic withholding rate on dividends is 17% from 2026. It drops to 0% if the recipient company has held at least 10% of the voting shares for at least 12 months without interruption, unless the recipient is in a blacklisted territory. Treaties can reduce the rate; the payer needs an approved residence certificate (form DAS-1) before payment.
For a Lithuanian-resident founder, salary is now less attractive. From 2026 PwC lists progressive personal income tax of 20% up to about €83,237, 25% up to about €138,729, and 32% above that, plus employee social security of 19.5%.
VAT
The standard VAT rate is 21%, with reduced rates of 12% and 5% (PwC). Avalara and Ecovis both put the domestic registration threshold at €45,000 of taxable turnover over 12 months. Ecovis notes you must register anyway if goods acquired from other EU states exceed €14,000 in the previous calendar year. If you sell B2C across the EU, the €10,000 EU-wide one-stop-shop threshold also applies.
Where the company is taxed, and where you are
PwC says a company is tax resident in Lithuania if it is incorporated there. That is simpler than Cyprus, which looks at management and control. But the country where you actually live may still claim the company is managed there, or that you have created a permanent establishment there. A treaty tie-breaker then decides. A UAB run entirely by a director living in another country is exposed to that risk.
You become personally tax resident in Lithuania under any one of five tests (PwC), including:
- a permanent place of residence in Lithuania;
- 183 days or more in Lithuania in a tax year;
- 280 days across successive tax periods, with at least 90 days in one of them;
- personal, social or economic interests that are more in Lithuania than elsewhere.
Living in Lithuania as a non-EU founder needs a residence permit. Deloitte describes start-up visa and shareholder routes, but its figures date from 2020 and we could not confirm the current thresholds, so check with the Migration Department. Our guide to the 183-day myth explains why residence tests elsewhere matter too.
Banking
Plan banking before you form the company. The notarial route assumes you open a temporary account to pay in the €1,000 capital, so a bank is involved from day one. Expect full know-your-customer checks: business plan, source of funds, and why a non-resident founder needs a Lithuanian company. E-residency does not solve this. A Lithuanian or EU payment institution account can help for day-to-day payments, but some banks and partners treat that differently from a bank account.
Pitfalls
- Assuming 0% for two years. Corporate owners, share transfers in the first three periods, or control of another company can disqualify you.
- Out-of-date rates. Many provider sites still quote 15% and 5%.
- Confusing e-residency with residence. It is a signature tool, not a right to live in Lithuania.
- Dividend math. 17% company tax plus 15% on dividends is about 29.5% combined on distributed profit at the standard rate (17% + 83% × 15%). At 7% it is about 21%. Our calculation, not an official figure.
- Home-country rules. If you live elsewhere, your own country’s controlled foreign company and management rules may pull the profit back home.
Who Lithuania suits
- EU founders who will live in Lithuania and can qualify for the 0% then 7% small-company rate.
- Small teams of individuals who want a low-admin MB.
- Founders who value a fast, digital registry and EU incorporation, and who accept that banking takes real effort.
It suits less well a non-resident who wants a remote EU shell with an easy bank account. Compare Estonia, Bulgaria and other options in our guide to where to incorporate.
Related guides: Where to incorporate as a digital nomad: US LLC, UK, Estonia, UAE · Estonia digital nomad visa 2026: €4,500 income, C vs D visa, tax · Bulgaria company formation (2026): 10% tax, 5% dividends and the EOOD · Holding company for founders (2026): how it works and where to set one up · Tax residency explained: why the 183-day rule is a myth for most countries
Quick answers
Q: What is the corporate tax rate in Lithuania in 2026?
The standard rate is 17% from 1 January 2026, up from 16% in 2025 and 15% before that. Small companies with revenue up to €300,000 pay 7%. Qualifying new companies owned by individuals pay 0% for their first two tax periods, if they meet the ownership and share-transfer conditions.
Q: What is the minimum share capital for a UAB in Lithuania?
It is €1,000. The minimum was reduced from €2,500 in 2023, not in 2025 as some sites say. A small partnership (MB) has no specified minimum capital, but it can only have up to 10 members and all of them must be natural persons, not companies.
Q: Can I open a Lithuanian company and bank account with e-residency?
Lithuanian e-residency costs a €90 state fee and gives you a digital identity for government e-services and e-signatures, which helps with online filings. It does not come with a bank account. Estonia’s e-Residency programme notes Lithuania has no service-provider ecosystem for e-residents, so expect normal bank onboarding and checks.
Sources
- KPMG: Lithuania, amendments to corporate income taxation effective 1 January 2026
- KPMG Lithuania: Tax Card 2026
- PwC Worldwide Tax Summaries: Lithuania, taxes on corporate income
- PwC Worldwide Tax Summaries: Lithuania, withholding taxes
- PwC Worldwide Tax Summaries: Lithuania, corporate residence
- PwC Worldwide Tax Summaries: Lithuania, other taxes
- PwC Worldwide Tax Summaries: Lithuania, tax credits and incentives
- PwC Worldwide Tax Summaries: Lithuania, taxes on personal income
- PwC Worldwide Tax Summaries: Lithuania, individual residence
- Walless: from 2025, sixteen is the new fifteen
- Ecovis Lithuania: Lithuanian tax guide
- Innovation Agency Lithuania: private limited liability company (UAB)
- Innovation Agency Lithuania: start a business
- Innovation Agency Lithuania: differences between the most popular legal forms
- Fondia: amendment to the Law on Companies in Lithuania
- Mercator: amendment to the Companies Act in Lithuania
- Invest Lithuania: start your business in Lithuania
- Migration Department of Lithuania: state fees, e-resident
- Migration Department of Lithuania: e-resident services
- e-Residency of Estonia: comparing Estonian and Lithuanian e-residency
- ERR News: Lithuania launches own national e-residency scheme
- Avalara: Lithuanian VAT registration
- Deloitte Lithuania: TRP for business and work purposes
This is general information from the Nomad Forums team, not legal, tax or financial advice. Rules change; check the official source or a qualified adviser before acting.
Over to you: If you have set up a UAB or MB recently, did you file online or through a notary, and which bank opened your account? Has anyone used Lithuanian e-residency for real company admin?