Set Up a Subsidiary In Lithuania
Set Up a Subsidiary in Lithuania: Unlock Europe’s Gateway to Growth
Expanding your business into the European market is a major milestone—and Lithuania offers the perfect springboard. Establishing a subsidiary in Lithuania is not only a strategic move due to its EU membership and favorable tax environment, but also a streamlined, cost-effective process for foreign companies looking to scale globally. Whether you’re a startup or a well-established enterprise, Lithuania’s modern infrastructure, educated workforce, and transparent business laws make it the ideal destination.
Let’s explore how you can set up a successful subsidiary in Lithuania and why more international companies are choosing this dynamic Baltic country.
Why Choose Lithuania for Your Subsidiary?
Lithuania stands out as one of the most business-friendly countries in Europe. Its rapidly growing economy, progressive legal system, and investor-friendly policies make it an attractive destination for foreign businesses. With access to the EU market of over 450 million people, a strong talent pool, low corporate taxes, and digital-first government services, Lithuania combines innovation with efficiency.
Companies from sectors like fintech, IT, logistics, manufacturing, and life sciences have already established successful subsidiaries here. Whether you’re looking to enter the European market or expand your operations in the region, Lithuania offers strategic advantages that are hard to ignore.
What Is a Subsidiary?
A subsidiary is a legally independent company that is fully or partially owned by a foreign parent company. In Lithuania, the most common legal form for a subsidiary is the Private Limited Liability Company (UAB). It has its own name, registration number, and legal rights, separate from the parent company.
This independence allows the subsidiary to conduct business in Lithuania and across the EU, sign contracts, hire employees, and be responsible for its own obligations—offering both flexibility and limited liability protection.
Step-by-Step Guide to Setting Up a Subsidiary in Lithuania
Establishing a subsidiary in Lithuania is a relatively straightforward process. Here’s a breakdown of the key steps involved:
1. Choose the Legal Form
Most subsidiaries are registered as UAB (Private Limited Liability Company). This structure offers limited liability, is suitable for most industries, and requires minimal share capital (as low as EUR 1,000).
2. Reserve the Company Name
You’ll need to choose a unique name and reserve it with the Lithuanian Centre of Registers.
3. Prepare Incorporation Documents
These include:
- Articles of Association
- Founding Act
- Shareholder resolutions
- Director’s consent forms
Professional legal support ensures everything complies with Lithuanian business law.
4. Open a Local Bank Account
A temporary bank account is required to deposit share capital before registration. After incorporation, it becomes the subsidiary’s operational account.
5. Register with the Centre of Registers
Once documents are signed and notarized, submit them to the Register of Legal Entities. The subsidiary is typically incorporated within 5–7 business days.
6. Obtain a Company Seal and VAT Number (if needed)
Depending on your business activity, you may need to register for VAT and obtain a company seal.
Can Foreigners Own 100% of a Lithuanian Subsidiary?
Yes! Lithuania welcomes foreign direct investment and places no restrictions on foreign ownership. A foreign company or individual can own 100% of the shares in a subsidiary. There’s also no requirement for directors or shareholders to be residents of Lithuania, offering maximum flexibility.
Benefits of a Lithuanian Subsidiary
Setting up a subsidiary in Lithuania offers a wide range of benefits, including:
Government Support: Various grants and incentives are available for foreign companies investing in Lithuania.
Access to the EU Market: Enjoy full trading rights and free movement of goods, services, and capital across the European Union.
Skilled Workforce: Lithuania boasts a highly educated, multilingual talent pool, particularly in technology, finance, and engineering.
Attractive Tax Environment: The standard corporate income tax rate is 15%, with potential reductions for small enterprises and reinvested profits.
Low Operational Costs: Office rental, salaries, and administrative costs are lower compared to Western Europe.
Subsidiary vs. Branch: Which Is Better for You?
While a subsidiary is a separate legal entity, a branch is simply an extension of the parent company. A subsidiary allows greater independence, local tax advantages, and legal protection. It’s often the preferred choice for long-term investment and brand-building in Lithuania.
A branch, on the other hand, may be suitable for temporary or limited-scope operations, but it lacks the flexibility and legal separation of a subsidiary.
Corporate Governance and Management Structure
Your Lithuanian subsidiary must have a managing director (CEO), but a board is optional unless required by the Articles of Association. You can appoint foreign nationals, and directors do not need to reside in Lithuania.
While it’s not mandatory to hire local staff, having a local representative can enhance your subsidiary’s credibility, especially when dealing with banks or government institutions.
Do You Need a Physical Office in Lithuania?
Yes, a registered office address in Lithuania is mandatory for incorporation. However, many companies opt for shared office spaces or virtual office solutions, especially during the early stages. It’s a cost-effective way to meet the legal requirement without committing to a full-scale office lease.
Common Mistakes to Avoid
Not localizing your documentation. Ensure all documents are translated and certified where required.
Overlooking tax registrations. If your subsidiary plans to trade, VAT and social insurance registrations may be necessary.
Poor planning for banking. Some banks require local representatives or specific documentation.
Underestimating legal compliance. A legal advisor familiar with Lithuanian corporate law is a must.
How Long Does It Take to Set Up a Subsidiary in Lithuania?
With professional guidance, your Lithuanian subsidiary can be up and running in as little as one to two weeks. The exact timeline depends on the accuracy of documentation, shareholder structure, and whether you’re opening a new bank account locally.
Partner with Experts for a Seamless Setup
At UAB “AM LAW”, we specialize in helping foreign companies establish successful subsidiaries in Lithuania. Our experienced team provides end-to-end support—from document preparation and legal structuring to bank coordination and ongoing compliance.
We understand the challenges of cross-border expansion and are committed to simplifying the legal process for you. With our expert assistance, you can focus on what matters most: growing your business.
Let’s Build Your Lithuanian Presence Together
If you’re ready to expand into Europe, setting up a subsidiary in Lithuania is the smart, future-forward choice. With its modern infrastructure, competitive tax system, and pro-business policies, Lithuania opens doors to countless opportunities.
Contact us today for a free consultation and take the first step toward establishing your company’s presence in one of Europe’s most exciting markets.
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