Lithuanian Subsidiary Of Foreign Company
Take Your Business Global: Start with Lithuania
Expanding your business into Europe opens a world of opportunity—and Lithuania is one of the most promising destinations to begin this journey. With its advantageous location, strong ties to the European Union, modern infrastructure, and progressive economy, Lithuania has emerged as a gateway to doing business across the continent. For foreign investors, establishing a Lithuanian subsidiary offers an excellent path to enter the European market with autonomy, legal protection, and local recognition.
A subsidiary in Lithuania allows you to operate as a separate legal entity from your parent company. This means it has its own liabilities, obligations, and legal structure, giving you more flexibility and security in how you conduct business. It also enables you to tap into local talent, take advantage of Lithuania’s competitive tax regime, and build a brand presence that feels native to the region.
At UAB “AM LAW”, we specialize in helping foreign businesses create a robust legal foundation in Lithuania. Our experienced legal team guides you through every step of the incorporation process, ensuring all legal, tax, and regulatory matters are properly addressed so your business can launch smoothly and grow confidently.
Why Lithuania Stands Out in Europe
Lithuania is not only a proud member of the European Union and the Eurozone, but it’s also recognized as one of the most digitally advanced countries in the region. Its high-tech infrastructure, skilled workforce, and pro-business government make it an attractive location for foreign direct investment. Many companies in technology, fintech, logistics, and manufacturing have successfully set up operations in Lithuania, benefiting from its business-friendly environment.
Geographically, Lithuania offers quick access to both Western and Eastern Europe. Major transport links, including seaports, railways, and airports, connect it seamlessly with neighboring countries and beyond. In today’s fast-paced global economy, this kind of accessibility provides a significant logistical advantage.
The local labor force is another major asset. With a high level of education, multilingual capabilities, and a growing pool of professionals trained in IT, engineering, finance, and legal services, Lithuania offers the kind of human capital businesses need to thrive. Most young professionals speak English fluently, and many also speak Russian, Polish, or German, adding value to international operations.
Understanding the Structure of a Lithuanian Subsidiary
Setting up a subsidiary in Lithuania means forming a new legal entity under local laws. The most common and practical form of subsidiary is the private limited liability company, known in Lithuania as a Uždaroji Akcinė Bendrovė, or UAB. This type of company can be 100% foreign-owned, giving you full control while complying with local requirements.
A subsidiary operates independently of the parent company. It can own property, sign contracts, employ staff, and pay taxes in Lithuania. This structure protects the parent company from local liabilities, since the subsidiary assumes its own risks and obligations. If something goes wrong, the parent company is not directly exposed, which makes this model more secure than opening a branch.
The subsidiary has its own management and governance, which typically includes a director and shareholders. These roles can be filled by foreign nationals, and there’s no requirement for Lithuanian residency. The minimum share capital requirement for a UAB is currently €2,500, which must be deposited into a temporary bank account during the registration process.
Step-by-Step Process of Establishing a Subsidiary
Setting up a subsidiary starts with defining your goals and selecting the appropriate legal form. At UAB “AM LAW”, we begin with a detailed consultation where we learn about your business, industry, and operational strategy. This helps us create a custom plan tailored to your expansion needs.
Once the structure is defined, we prepare all the founding documents required for incorporation. These include the Articles of Association, shareholder resolutions, details of the company’s director, and declarations of compliance. All documents are carefully drafted in accordance with Lithuanian corporate law and, if needed, translated into English for your review.
A temporary bank account is then opened to deposit the share capital. After the deposit is confirmed, we submit the application for company registration to the Lithuanian Centre of Registers. This process is efficient, and registration is usually completed within five to ten working days.
Once the subsidiary is officially registered, we assist in opening a permanent corporate bank account, registering for VAT if applicable, and handling other administrative steps such as obtaining company seals, preparing contracts, or initiating accounting services. Our team ensures that every step is compliant and smooth, so you can focus on starting your business operations.
Differences Between a Subsidiary and a Branch
Many business owners wonder whether to choose a subsidiary or a branch. While both models allow foreign companies to operate in Lithuania, they come with important differences.
A subsidiary is a legally independent entity. It has its own legal status and is responsible for its own liabilities. It also enjoys greater autonomy in decision-making, and its taxation is handled separately from the parent company.
A branch, on the other hand, is simply an extension of the foreign parent company. It does not have separate legal personality and is not protected from the parent company’s liabilities. This structure may be suitable for certain short-term or representative activities, but for businesses looking to build a strong, long-term presence in Lithuania and the EU, a subsidiary offers greater security and control.
Legal and Tax Benefits of a Lithuanian Subsidiary
The Lithuanian tax system is one of the most competitive in the European Union. Corporate income tax is only 15%, and certain small businesses or reinvested profit cases may qualify for reduced or even 0% tax rates. Value-added tax (VAT) is generally 21%, and businesses engaged in international trade can benefit from exemptions and cross-border provisions under EU rules.
From a legal standpoint, Lithuania maintains a transparent business registry, and regulatory requirements are clear and predictable. Annual reporting is required, and proper accounting must be maintained, but the government actively supports foreign investment by reducing red tape and providing online services for many processes.
Subsidiaries also benefit from double taxation treaties that Lithuania has signed with many countries, ensuring that businesses do not pay tax twice on the same income. This is especially advantageous for holding companies or enterprises with complex international structures.
Comprehensive Support from UAB “AM LAW”
When you work with UAB “AM LAW”, you gain access to a dedicated team of legal experts who understand the challenges of international expansion. We don’t just help you fill out forms—we become your long-term partners in Lithuania.
From company formation and legal documentation to ongoing tax compliance and advisory services, we offer everything you need to run a successful subsidiary. We also help you navigate employment laws, lease agreements, licensing issues, and any other regulatory matter that may arise during your business journey.
Our multilingual team speaks English, Lithuanian, and Russian, so communication is never a barrier. We pride ourselves on our responsiveness, professionalism, and client-first approach.
Ready to Expand? Lithuania is Waiting
Establishing a subsidiary in Lithuania is a smart and strategic step for any foreign company seeking a stable, cost-effective, and accessible base in the European Union. Whether you’re a tech startup, a manufacturing company, or a multinational enterprise, Lithuania offers the tools and the environment to help your business grow.
Let UAB “AM LAW” be your trusted legal guide. With our support, your subsidiary can be fully operational in just a few short weeks, backed by a team that’s committed to your success from day one.
Citizenship of Lithuania
Citizenship
- Acquisition of citizenship of the Republic of Lithuania by virtue of birth.
- Restoration of citizenship of the Republic of Lithuania.
- Oath of Allegiance to the Republic of Lithuania.
- Naturalisation.
- By way of exception.
- Simplified procedure.
Right to reinstate citizenship of the Republic of Lithuania to persons who had citizenship of the Republic of Lithuania and until 15 June 1940 and their descendants who have not acquired citizenship of the Republic of Lithuania before 2011-04-01.
We could help you to get citizenship in Lithaunia.
For jobseekers:
We are searching employees from Europe who would want to work in Lithaunian companies.
For employers:
We are dealing with recruitment companies all over the world and can suggest a variety of employees.