Lithuania has become one of the top business hubs in the EU for small and medium-sized businesses. The reason is simple: low taxes, fast setup, and clear rules.
Competitive Corporate Taxes
Lithuania offers one of the lowest corporate tax systems in Europe:
- 0% corporate income tax — for the first two years, your company may qualify for a 0% corporate income tax rate if its annual revenue does not exceed €300,000 and the company is registered directly in your name with a power of attorney. Please note that this type of registration costs more than a standard company setup.
- 7% corporate income tax — applies if annual revenue is up to €300,000.
This company setup is cheaper and faster to establish than the 0% income tax option. - 17% corporate tax – if revenue exceeds €300,000
This means more of your profit stays inside the company, allowing you to reinvest, scale, and grow faster.
Beyond taxes, Lithuania provides:
- Predictable regulations
- Low administrative costs
- A pro-business environment inside the EU & Eurozone
- Easy VAT registration
Whether you are launching a startup or relocating an existing business, Lithuania offers a strong strategic advantage.
Company Types in Lithuania: MB vs UAB
When registering a company in Lithuania, most founders choose between MB and UAB. Both offer limited liability, but they are designed for different business goals.
MB (Mažoji Bendrija – Small Partnership)
The MB is ideal for freelancers, digital entrepreneurs, consultants, and small online businesses.
Advantages
- No minimum share capital (can start from €1)
- Flexible profit withdrawals during the year (advance on profit)
- You don’t need to appoint yourself as a director, which means you avoid paying monthly salary taxes to the government (typically around €300–€400 per month).
- Simpler accounting and lower maintenance costs
Disadvantages
- Maximum 10 members
- Only natural persons can be members (no companies)
✅ Best for: solo founders, online businesses, service providers, small teams.
UAB (Uždaroji Akcinė Bendrovė – Private Limited Company)
The UAB is Lithuania’s most common and internationally recognized company type.
Advantages
- Unlimited shareholders
- Shareholders can be individuals or companies
- Strong international credibility
- Easier to attract investors or sell shares
- Ideal for scaling, hiring, and VC-backed growth
Disadvantages
- €1,000 minimum share capital
- Mandatory director employment contract
- Monthly salary & employment taxes required
- Profits usually distributed once per year as dividends
✅ Best for: scalable businesses, e-commerce brands, tech startups, companies seeking investors.
Which One Should You Choose?
Choose MB if you:
- Are starting small
- Want flexibility
- Want lower fixed monthly costs
Choose UAB if you:
- Plan to scale fast
- Need investors or partners
- Want maximum credibility with banks and suppliers
There is no “better” option — only the right structure for your goals.
Why Professional Incorporation Support Matters
Lithuanian regulations are business-friendly — but still strict. Mistakes during setup can cause:
- Tax inefficiencies
- Compliance issues
- Banking problems later
A specialized consultancy helps you:
- Choose the right company type
- Prepare legal documents
- Register with tax authorities & Registrų centras
- Ensure full compliance from day one
Final Thoughts
Lithuania combines low taxes, EU access, and simple administration — making it one of the smartest jurisdictions in Europe for small and medium businesses in 2026.
We have successfully established over 500 companies in recent years.
If you want to set up your company correctly, efficiently, and without stress, professional guidance is the fastest and safest way forward.