Company Formation & Tax in Lithuania
A bank-friendly Baltic base with low capital requirements — the UAB, a competitive corporate tax, VAT, and incentives for small and new companies.
Lithuania has become a popular EU entry point for digital and fintech businesses — fast remote setup, a reputation as a bank-friendly jurisdiction, and a low minimum capital. One thing to get right: the corporate tax rate rose at the start of 2026, and many online guides still quote the old figure.
Choosing an entity
The standard vehicle is the UAB (uždaroji akcinė bendrovė, private limited company), with a minimum share capital of EUR 1,000 (at least 25% paid upfront). Larger businesses use the AB (public, EUR 40,000); smaller ventures may use the MB or sole proprietorship. Registration runs through the Centre of Registers (Registrų centras) — usually 1–3 business days — followed by tax registration with the State Tax Inspectorate (VMI) and, for employers, SoDra.
Corporate tax and VAT
| Tax | Rate |
|---|---|
| Corporate income tax (standard) — from 1 Jan 2026 | 17% (up from 16%) |
| Reduced rate — qualifying small companies | 7% (0% possible in the first period) |
| VAT (standard) | 21% (reduced 12% / 5%) |
| Dividend withholding tax (individuals) | 15% |
From 1 January 2026, the standard corporate income tax rate is 17% (raised from 16%). Qualifying small companies — broadly fewer than 10 employees and revenue under €300,000 — pay a reduced 7%, and may apply 0% in their first tax period. VAT is 21% standard, with reduced rates of 12% and 5% and a €45,000 registration threshold. Free Economic Zones can offer 0% corporate tax for an initial period.
Frequently asked questions
What is the corporate tax rate in Lithuania?
17% standard from 1 January 2026, with a reduced 7% rate (and 0% possible in the first period) for qualifying small companies.
How much capital do I need for a UAB?
EUR 1,000, with at least 25% paid upfront.
What is the Lithuanian VAT rate?
21% standard, with reduced rates of 12% and 5%; registration applies above €45,000 turnover.
Can a non-resident own a Lithuanian company?
Yes — there are no nationality or residency restrictions on founders or directors, and setup can be remote.
Official sources
This guide is general information prepared by ARM Management and is current as at June 2026. It is not legal or tax advice; rates changed in 2026 and rules continue to evolve. Confirm against the State Tax Inspectorate, or with an advisor, before acting.
Establish your Lithuanian company correctly.
ARM Management advises international founders on Lithuanian UAB formation, the 2026 tax changes and ongoing compliance. Begin with a confidential conversation.