Lithuania is an increasingly attractive location for entrepreneurs who want to establish a company, become self-employed, launch an online business or build a technology startup in the European Union.
The country offers several ways to operate a business, ranging from individual activity for freelancers and independent professionals to legal entities such as a small partnership (MB) or private limited liability company (UAB).
This guide explains the main steps involved in starting a business in Lithuania, including choosing a legal structure, registering your business, understanding taxes, checking permits, hiring employees and finding business support.
One of the most important decisions is choosing the legal form that matches your business.
| Business Form | Typical Use | Key Consideration |
|---|---|---|
| Individual Activity | Freelancers, professionals, small service businesses | Simple way to operate personally when applicable |
| Business Certificate | Selected small activities | Only available for activities and situations permitted by the rules |
| MB | Small businesses and partnerships | Separate legal entity designed for small businesses |
| UAB | Growing companies and businesses with employees | Limited liability company structure |
| Other legal forms | Specialized organizations and businesses | Depends on the purpose and ownership structure |
For freelancers and many independent professionals, individual activity can be one of the simplest ways to begin operating a business.
According to the Lithuanian State Tax Inspectorate (VMI), individuals carrying out independent commercial, production, creative or professional activities can generally do so by registering individual activity under a certificate or obtaining a business certificate where the particular activity qualifies.
The correct option depends on the actual activity and applicable rules. VMI also specifically advises people to check whether legislation requires the establishment of a company or additional permits and licences for their particular activity.
Official VMI information: Register Individual Activity in Lithuania
A mažoji bendrija (MB), or small partnership, is a Lithuanian legal entity designed for small businesses.
An MB can be useful for entrepreneurs who want a formal legal entity while operating a relatively small company.
It may be suitable for businesses such as:
The exact tax and accounting consequences should be assessed before choosing an MB.
Official company registration information is available from the Lithuanian Centre of Registers: MB Registration Guide
A UAB, or private limited liability company, is one of the main corporate structures for businesses operating in Lithuania.
A UAB may be appropriate if you plan to:
The Lithuanian Centre of Registers provides procedures for establishing and registering a UAB.
Official information: UAB Registration Guide
When establishing a Lithuanian legal entity, the registration process involves providing the information and documents required for the selected legal form.
Depending on the structure, the process can involve:
The exact requirements vary by legal form and circumstances, so entrepreneurs should use the current official Centre of Registers procedures rather than relying on an old checklist.
Taxes depend on the legal structure, income, activity, employees and other circumstances.
For individual activity, VMI states that applicable obligations can include personal income tax (GPM), VAT in circumstances where registration is required, and social insurance contributions such as PSD and VSD where applicable.
For 2026, VMI describes a revised individual-activity income-tax calculation. For annual taxable individual-activity income up to €42,500, the system uses a 20% rate together with a tax credit, with the effective income-tax burden increasing as taxable income rises within the relevant range.
Official information: VMI Business Tax Information
Companies such as UABs and MBs are subject to corporate income tax rules. Lithuania's current 2026 corporate tax framework includes different rates and possible relief depending on the company and eligibility.
VMI's current business-form tax table should be checked before making financial projections because eligibility for reduced or zero rates depends on specific conditions.
Official information: Tax Obligations by Business Form
VAT registration is an important issue for many Lithuanian businesses.
Under the current small-business VAT rules, Lithuanian taxable persons generally need to consider VAT registration when taxable economic activity turnover in Lithuania exceeds the applicable €45,000 threshold, subject to the detailed rules and exceptions.
There can also be VAT obligations involving transactions with other EU countries, imports, acquisitions and particular types of services.
Official VMI information: Lithuania Small Business VAT Scheme
If your business grows and you need employees, you must account for employment contracts, payroll, taxes and social insurance.
Sodra's 2026 information states that the standard employee social insurance contribution rate is 19.5%, consisting of pension, sickness, maternity and health insurance components. Employees participating in the additional pension accumulation system may have an additional 3% contribution.
Employer contributions include unemployment insurance and other social insurance contributions, with rates depending on the circumstances and applicable risk category.
The 2026 minimum monthly wage listed by Sodra is €1,153.
Official Sodra information: Sodra 2026 Employer Information
Not every business can simply be registered and immediately operated without additional requirements.
Depending on the activity, you may need:
Innovation Agency Lithuania specifically provides consultations covering business regulation, taxation, permits, licences, regulated professions and product requirements.
Official support: Innovation Agency Lithuania Business Consultations
Lithuania offers opportunities in both traditional industries and newer technology sectors. The right opportunity depends on your skills, capital, location and target customers.
You do not need to establish a large company to begin entrepreneurship in Lithuania. Many businesses can start with one founder and expand after customer demand is proven.
For more ideas, see: Small Business Ideas in Lithuania .
Vilnius is Lithuania's largest business centre and an important location for technology, professional services, international companies, finance and startups.
Business ideas particularly suited to Vilnius can include:
Kaunas offers opportunities connected with manufacturing, engineering, logistics, education, healthcare, technology and consumer services.
Klaipėda has a distinctive business environment due to its coastal location, port economy, tourism and logistics connections.
Entrepreneurship is not limited to Vilnius, Kaunas and Klaipėda.
Smaller cities and towns can provide opportunities where local demand is underserved or operating costs are lower.
Potential businesses include:
Lithuania has an established startup ecosystem, particularly around technology and innovation.
Startup Lithuania, operated by Innovation Agency Lithuania, supports startups at different stages, including idea development, MVP development, investment, partnerships and international expansion.
Potential startup sectors include:
Official startup information: Startup Lithuania
New entrepreneurs can obtain assistance before and after establishing their business.
Innovation Agency Lithuania offers free consultations for people planning to start a business and for recently established businesses.
The consultations can cover:
This can be particularly useful if you are unsure which registrations, permits or business structure apply to your proposed activity.
Lithuania can be considered by EU citizens and entrepreneurs from outside the EU who want to establish businesses in the country.
However, company ownership and the right to personally work in Lithuania are not always the same thing.
Non-EU citizens should check immigration and residence requirements before planning to live and work in Lithuania through their business.
VMI specifically states that a non-EU citizen wishing to conduct individual activity through a permanent base in Lithuania must have an applicable temporary or permanent residence permit under Lithuanian immigration law.
See our related guide: Work Visa & Work Permit in Lithuania .
A registered business normally needs an appropriate address and the exact requirements depend on the legal structure and registration process.
Entrepreneurs working remotely may not need a traditional office for day-to-day operations, but they should still ensure that their registered-office arrangements meet Lithuanian legal requirements.
For online businesses, keeping fixed costs low during the initial stage can help preserve cash for product development and marketing.
A business needs reliable methods to receive customer payments and pay suppliers, employees and government obligations.
Depending on the company structure and business model, entrepreneurs may use:
The appropriate solution depends on transaction volume, currencies, customer location, business risk and the bank or payment provider's onboarding requirements.
Before registering a company, calculate whether the business can realistically support itself.
A basic business plan should include:
Entrepreneurs with limited capital can consider service businesses that do not require large amounts of inventory or expensive equipment.
Once the initial business model is profitable or demonstrates strong demand, growth can come from several directions.
For technology companies, international expansion can allow a Lithuanian startup to address a much larger market than Lithuania alone.
Your personal living costs can be important when deciding how much money you need before becoming an entrepreneur.
Start by defining your business activity, researching customers and competitors, choosing the appropriate legal form, checking permits and licences, registering the business or individual activity, arranging tax and accounting matters and then beginning commercial operations.
For many freelancers and independent professionals, individual activity can be a straightforward starting option when the activity qualifies. Businesses that require a separate legal entity may instead consider an MB or UAB.
MB stands for mažoji bendrija, or small partnership. It is a Lithuanian legal entity designed for small businesses.
UAB is Lithuania's private limited liability company form. It is commonly used for companies that need a formal corporate structure and may employ staff, work with larger customers or grow over time.
Foreigners can establish businesses in Lithuania, but nationality and residence status can affect the process and their right to personally work in the country. Non-EU citizens should check current immigration requirements before moving to Lithuania to operate their business.
It depends on the activity. Some businesses require licences, permits, qualifications or registrations, while many ordinary commercial and professional activities do not require a sector-specific licence. Always check the requirements for the exact activity.
VAT obligations depend on turnover and the type and location of transactions. The current Lithuanian small-business VAT rules include a €45,000 domestic turnover threshold, but EU transactions and other circumstances can create additional obligations.
There is no single cost because it depends heavily on the business model. A freelancer may start with relatively little capital, while a restaurant, manufacturing company or technology startup may require substantially more funding.
Vilnius is an important technology, business and startup centre, but the best location depends on the industry. Kaunas, Klaipėda and smaller Lithuanian cities can be better suited to manufacturing, logistics, tourism, local services or businesses seeking different operating costs.
Innovation Agency Lithuania provides free consultations covering areas such as company establishment, business regulation, taxation, business planning, funding opportunities, permits, licences and product requirements.
Lithuania has an active startup ecosystem and support infrastructure, particularly in technology and innovation. Startup Lithuania and Innovation Agency Lithuania provide resources for founders working on startups and international growth.