Registering a Construction Company In Lithuania

Starting a Construction Company in Lithuania: Complete 2026 Guide

Starting a construction company in Lithuania can provide access to residential developments, commercial projects, renovation work, infrastructure contracts and public procurement opportunities. Lithuania is part of the European Union, uses the euro and follows EU-wide rules governing construction products, employee protection, public procurement and cross-border services.

However, construction is more heavily regulated than ordinary consulting, trading or online business. Registering a company and declaring a construction-related activity does not automatically give that company permission to perform every type of construction work. The applicable requirements depend on the services being provided, the classification of the structure, the qualifications of the company’s specialists and whether the business will operate as a general contractor, subcontractor, developer or specialist installer.

There is no single construction licence that every Lithuanian construction company must obtain. Instead, the legal requirements are determined by the type and complexity of each project. Before accepting work, the company should ensure that its legal form, EVRK activity codes, professional qualifications, VAT treatment, insurance, employee documentation and occupational safety procedures are suitable for the intended activities.

Why Lithuania Is an Attractive Market for Construction Businesses

Lithuania offers a practical base for construction businesses planning to operate locally or elsewhere in the European Union. Lithuanian companies can work with private property owners, developers, other contractors, municipalities, public institutions and international customers.

The market covers residential and commercial construction, property renovation, energy-efficiency improvements, utility infrastructure, roads, industrial facilities and specialist installation services. Lithuanian companies may also perform construction work in other EU countries, provided that they comply with the tax, employment, posting and professional requirements of the country where the project is located.

Another advantage is that Lithuanian companies can be fully foreign-owned. There is generally no requirement to appoint a Lithuanian shareholder or give a local partner an ownership interest in the business. Both EU and non-EU entrepreneurs may establish and own companies in Lithuania.

Foreign ownership must nevertheless be separated from immigration status. Owning a Lithuanian company does not automatically grant its shareholder or director the right to live or perform physical work in Lithuania. Non-EU nationals intending to work in the country should assess their residence and employment position separately through the Lithuanian Migration Department.

Can Foreigners Start a Construction Company in Lithuania?

Foreign citizens and foreign legal entities may establish a construction company in Lithuania. In many cases, the corporate formation can be completed remotely without the founder travelling to Lithuania.

The most appropriate legal structure will depend on the intended size of the company, its ownership structure and the type of contracts it plans to undertake. BalticIncorp provides complete assistance with company formation in Lithuania, including the preparation of incorporation documents, a registered legal address and the administrative procedures required to establish the company.

A foreign-owned construction company must comply with the same construction, employment, tax, insurance and occupational safety rules as a company owned by Lithuanian citizens. Foreign ownership does not provide an exemption from contractor certification or professional qualification requirements.

A construction company that is already authorised to perform regulated work in another EU or EEA country may be able to apply for recognition of its existing professional rights in Lithuania. The company’s foreign documents, experience and authorisations are assessed against Lithuanian legal requirements.

Choosing Between an MB and a UAB

The two most common legal forms for a construction business are the UAB, or private limited liability company, and the MB, or small partnership. Both are separate limited liability legal entities, but they are intended for different types of businesses.

A Lithuanian UAB is normally the more suitable option for a company planning to hire a larger team, act as a general contractor, participate in public tenders, work with investors or undertake higher-value projects. A UAB has a conventional shareholder structure, requires a director and has minimum share capital of €1,000.

Shares in a UAB may be owned by individuals or legal entities. This makes it suitable for foreign parent companies, joint ventures and businesses that may later bring in additional shareholders. Its structure is also widely understood by banks, developers, investors and international business partners.

An MB, or Small Partnership, can be suitable for a smaller, owner-operated construction business. It is frequently used by small teams providing renovation, finishing, installation, plastering, painting, flooring or other specialist services.

An MB does not require traditional share capital and may have up to ten members. However, all members must be natural persons, meaning that a foreign or Lithuanian company cannot become a member of an MB. This structure may be convenient when several tradespeople want to operate through one company, but it becomes less flexible if the business later needs corporate investors or a more formal shareholder structure.

For a small team performing finishing or repair work, an MB may be sufficient. For a general contractor, employer, tender participant or company planning substantial growth, a UAB is usually the stronger long-term choice. An MB can be converted into a UAB later if the company outgrows its original structure.

Choosing the Correct EVRK Codes for Construction Activities

Every Lithuanian company must declare the economic activities it performs. These activities are classified under EVRK, the Lithuanian version of the European NACE classification.

New companies should use EVRK Revision 2.1, which entered into force in 2025. Older websites and documents may still refer to the previous classification, so construction businesses should be careful when copying activity codes from outdated sources.

Under EVRK 2.1, code 41.00 covers the construction of residential and non-residential buildings. This is normally the principal activity for a company building complete houses, apartment buildings, commercial properties or other buildings. The former code 41.20, which appears in many older publications, has been replaced by 41.00 under the updated classification.

Civil engineering activities appear under Division 42. These include the construction of roads and motorways under 42.11, railways under 42.12, bridges and tunnels under 42.13, utility projects for fluids under 42.21, electricity and telecommunications infrastructure under 42.22, water projects under 42.91 and other civil engineering projects under 42.99.

Specialised construction activities appear under Division 43. Relevant codes include 43.11 for demolition, 43.12 for site preparation, 43.21 for electrical installation, 43.22 for plumbing, heating and air-conditioning installation, 43.23 for insulation, and 43.24 for other construction installation.

Finishing activities include 43.31 for plastering, 43.32 for joinery installation, 43.33 for floor and wall covering, 43.34 for painting and glazing, and 43.35 for other building completion and finishing. Roofing is classified under 43.41, masonry and bricklaying under 43.91, while other specialised activities that do not fit a more specific category may fall under 43.99.

A company may declare several activity codes when it provides different services. However, its principal code should reflect the activity expected to generate the largest part of its business.

An EVRK code only describes the company’s economic activity. It is not a construction licence and does not prove that the company has the qualified personnel, experience or certification needed to perform regulated work.

Property development should also be distinguished from physical construction. Under EVRK 2.1, the development of building projects no longer falls under the former construction code 41.10. It is now classified as real estate activity under code 68.12. A company developing and selling property through external contractors may therefore need a different principal code from a company physically performing construction work.

Does a Construction Company Need a Licence in Lithuania?

Lithuania does not have one universal construction licence that applies to every contractor. A company may be registered with construction-related EVRK activities without obtaining a general construction licence, but this does not mean it can legally undertake every project.

The requirements depend on the work being performed and the legal classification of the structure. Lithuanian construction law distinguishes between simple structures, non-special structures and special structures. The more complex or higher-risk the structure, the stricter the requirements placed on the contractor and the responsible specialists.

Certain ordinary renovation, repair and finishing activities may be performed without a company-level qualification certificate. This can include painting, plastering, flooring, joinery and other relatively straightforward work. Nevertheless, an individual project may still require a qualified construction manager, certified specialist, compulsory insurance, safety documentation or a valid construction permit.

The description used by the customer is not decisive. A project described informally as “simple renovation” may include work that legally qualifies as reconstruction, alteration of structural elements or regulated installation. The actual scope should be assessed before the contract is signed.

Certification for Work on Special Structures

A company wishing to act as a contractor on special structures, known in Lithuanian as ypatingieji statiniai, will generally need a qualification certificate issued by the Construction Sector Development Agency, or SSVA.

Special structures can include technically complex, large or higher-risk buildings and infrastructure. Depending on their characteristics, this category may cover high-rise buildings, large public buildings, energy facilities, industrial structures and major infrastructure projects.

During the certification procedure, SSVA evaluates whether the company is properly prepared to perform the requested activities. The assessment can include the company’s certified construction managers, technical personnel, employees, completed projects, customer references, tax compliance, construction procedures, equipment and specialist qualifications.

According to the official SSVA requirements, a contractor seeking the right to perform all general construction works on special structures normally needs at least two years of construction-sector experience. Other specialist contractors generally need at least one year of relevant experience.

This is important for new companies. A newly established company may not immediately qualify for the broadest contractor certificate unless it can demonstrate the required experience, qualified personnel and completed work in accordance with the applicable rules.

Companies from EU or EEA countries, as well as Switzerland, may apply for recognition of documents confirming their right to perform construction activities in their country of origin. Companies from other countries usually follow the same qualification procedure as Lithuanian companies.

Qualifications for Specialist Construction Work

Additional qualifications may be required for particular construction activities. These can include electrical installation, gas systems, fire-safety systems, work involving fluorinated gases, cultural heritage structures, lifting equipment, welding and work at height.

Some qualifications must be held by the company, while others must be held by the individual specialist performing or supervising the work. These requirements should be checked separately. Employing an experienced specialist does not automatically give the company every right held by that person, and a company certificate does not replace the professional qualifications required from individual employees.

A new construction company should therefore define its intended scope before recruiting personnel. The company needs specialists whose qualifications correspond to the type of contracts it plans to accept.

Hiring Employees and Construction Specialists

A Lithuanian construction company may employ Lithuanian, EU and non-EU workers. Each employee must have a written employment contract and must be reported to the Lithuanian social insurance system before beginning work.

From 1 January 2026, the statutory minimum monthly wage in Lithuania is €1,153 gross, while the minimum hourly rate is €7.05. The minimum wage is generally intended for unqualified work. Employees performing skilled construction work should be paid according to their responsibilities, experience and professional qualifications.

Gross salary is subject to personal income tax and employee social insurance contributions. The employer also pays the applicable employer contributions. The employee’s net salary can vary depending on the tax-free allowance, pension accumulation and other personal circumstances.

When preparing a project budget, a construction company should calculate the full employment cost rather than considering only the salary that the worker expects to receive after taxes. Travel, accommodation, protective equipment, health checks and safety training may also form part of the real labour cost.

Transparent Worker Identification Code

Every person working on a Lithuanian construction site must have a valid Transparent Worker Identification Code, known as the Skaidriai dirbančiojo ID.

This is a QR code generated through the Sodra social insurance system. It allows the responsible authorities and construction-site operator to verify that the person is officially employed, legally self-employed, properly posted to Lithuania or working under another permitted arrangement.

The requirement applies to employees, self-employed tradespeople, MB managers working under eligible civil contracts and workers posted by foreign employers. The employer must ensure that its workers have valid codes, while the developer or authorised contractor must be able to verify the people present on the construction site.

The State Labour Inspectorate’s official guidance explains how the codes are issued and who must possess them. A subcontractor’s verbal assurance that its workers are officially employed should not replace actual verification.

Employing or Posting Foreign Workers

EU and EEA citizens benefit from free movement rules, although registration and employment formalities may still apply. Non-EU nationals will usually require an appropriate Lithuanian residence status before they can legally work in the country.

Foreigners who own shares in a Lithuanian company do not automatically receive permission to work for that company. Ownership, management and physical employment are separate legal matters.

A foreign employer temporarily sending workers to a construction project in Lithuania must comply with the rules governing posted workers. Depending on the circumstances, this can include notification to the State Labour Inspectorate, an LDU notification through Sodra, local remuneration requirements, working-time rules, A1 social insurance documents and Transparent Worker IDs.

Construction is subject to stricter posting controls than many ordinary services. The official posted-worker guidanceshould be reviewed before foreign workers arrive at the construction site.

Corporate Income Tax for Construction Companies

Construction businesses are generally subject to the same corporate income tax rules as other Lithuanian companies. From 2026, the standard corporate income tax rate is 17% of taxable profit.

Qualifying small companies whose annual income does not exceed €300,000 may apply a 0% corporate income tax rate during their first and second tax periods. A reduced rate of 7% may apply during subsequent periods, provided that the company meets the statutory conditions.

Corporate income tax is calculated on taxable profit rather than total turnover. For example, if a construction company earns €250,000 and incurs €210,000 in allowable business expenses, the tax is calculated on the taxable profit, subject to any tax adjustments, rather than on the full €250,000 received from customers.

Properly documented expenses related to the company’s taxable activity may generally be deducted. These can include construction materials, employee salaries, subcontractor invoices, equipment, transport, insurance, accounting and professional services. Personal expenses and undocumented payments cannot simply be treated as company costs.

The current corporate income tax rates are published by the Lithuanian Ministry of Finance.

VAT Registration for a Construction Company

The standard VAT rate in Lithuania is 21%. A company is generally required to register as a regular VAT payer when its taxable turnover in Lithuania exceeds €45,000 during the current or preceding calendar year.

VAT registration may become necessary before the turnover threshold is reached. Certain purchases of goods from other EU countries, services acquired from foreign suppliers and cross-border services can create an earlier registration obligation.

Voluntary VAT registration in Lithuania is often commercially useful for construction businesses. Contractors regularly purchase materials, tools, equipment, fuel and professional services with VAT. A VAT-registered company performing taxable activities may generally deduct eligible input VAT when it possesses valid invoices and supporting documents.

A new business applying for voluntary VAT registration should be prepared to demonstrate genuine planned activity. The tax authority may request customer contracts, supplier quotations, bank statements, information about employees and a clear explanation of the company’s business model.

Reverse-Charge VAT on Construction Work

Lithuania applies a special domestic reverse-charge mechanism to qualifying construction work under Article 96 of the VAT Law.

When qualifying construction services are supplied to a customer that is both a Lithuanian VAT payer and a taxable person, the obligation to account for the VAT is transferred to the purchaser. The invoice must be prepared correctly and indicate that reverse-charge VAT applies.

The mechanism does not automatically apply to every invoice issued by a construction company. When the customer is a private individual, is not registered for VAT or the service does not legally qualify as construction work, the ordinary VAT treatment may apply.

The distinction between construction work, equipment supply, maintenance, design and other professional services can be important. A mixed contract should be reviewed carefully instead of applying reverse-charge VAT to the entire invoice automatically.

The Lithuanian State Tax Inspectorate provides detailed guidance in its commentary on Article 96.

Construction Work in Other EU Countries

A Lithuanian construction company may perform projects elsewhere in the European Union. However, construction services are usually connected with specific immovable property, and the VAT treatment is generally determined by the country where that property is located.

A Lithuanian contractor working on a building in Germany, Sweden or another EU country should not assume that an ordinary cross-border B2B reverse charge will always be sufficient. The company may need a local VAT number, posted-worker registrations, local payroll arrangements, sector-specific authorisations or additional insurance.

The European Commission’s VAT guidance confirms that services connected with immovable property are generally taxed where the property is situated. The national rules of the country where the project takes place must therefore be checked before invoicing begins.

Accounting Requirements for Construction Companies

Construction accounting is more complicated than recording a small number of ordinary monthly invoices. Projects can include advance payments, staged invoices, subcontractors, retention amounts, materials held on site, additional work, equipment depreciation and disputes over completed work.

The accounting records should make it possible to connect every invoice and expense with the relevant project. Contracts, estimates, approved variations, material invoices, timesheets and acceptance documents should be stored together. This helps the company calculate project profitability, support VAT deductions and respond to questions from customers or the tax authority.

Completed work is commonly documented using signed acceptance or completion acts. The contract, invoice and acceptance documents should describe the same work and reporting period. Additional work should be approved in writing, including its price and effect on the completion date.

VAT-registered companies must maintain purchase and sales invoice records and submit the required VAT declarations. Payroll, social insurance reports, annual financial statements and corporate income tax returns must also be prepared within the applicable deadlines.

Because construction invoicing involves industry-specific VAT and revenue-recognition issues, it is advisable to use an accountant familiar with contractor and subcontractor transactions. BalticIncorp provides ongoing accounting services in Lithuania, including bookkeeping, payroll and VAT reporting.

Occupational Safety Requirements

Construction is one of the sectors most closely monitored for occupational safety. Every employer is responsible for providing safe working conditions regardless of the company’s size, profitability or the nationality of its employees.

Before work begins, the company must assess occupational risks and implement measures to eliminate or reduce them. Depending on the project, this may include safe work-at-height procedures, scaffolding inspections, electrical safety, machinery controls, lifting plans, excavation protection, personal protective equipment and emergency arrangements.

Employees must receive proper instructions and training for the work they perform. A worker should not be allowed to operate equipment or undertake a hazardous task without the required knowledge, training and protection. Mandatory health checks may also apply where employees are exposed to specific workplace risks.

Safety documents must reflect the actual construction site. A generic risk assessment copied from another business is unlikely to be sufficient when the equipment, work processes and hazards are different. The State Labour Inspectorate confirms that occupational risks must be assessed in every company and that the employer is responsible for financing the required safety measures.

Insurance Requirements

Insurance should be arranged before the contractor enters the construction site. Lithuanian construction law provides for compulsory insurance covering certain construction works and civil liability connected with construction, reconstruction, repair, renovation, demolition and work on cultural heritage structures.

The required policyholder and scope of cover depend on the company’s role, project structure and contractual arrangements. When several contractors and subcontractors participate in one project, the parties should establish who is responsible for arranging the compulsory construction works policy and whether all participants are properly covered.

Performing regulated construction activity without the compulsory insurance required for that activity can be treated as operating without the legal right to perform the work.

A contractor should also consider general public liability, equipment insurance, vehicle insurance and cover for damage to materials or completed work. Public tenders and private customers may require insurance limits exceeding the statutory minimum.

The company should check the policy’s exclusions, deductible, territorial coverage, subcontractor protection and reporting deadlines. A policy that does not reflect the company’s real activities may provide little protection when a claim occurs.

Working With Customers and Subcontractors

A well-prepared construction contract is one of the most important forms of protection for a contractor. The agreement should clearly define the scope of work, technical documents, price, payment schedule, deadlines, responsibility for materials, acceptance procedure, warranty obligations and rules for approving changes.

Many disputes begin with additional work. The contractor performs something that was not included in the original estimate, but the customer later argues that it formed part of the agreed price. Additional work should therefore be approved in writing before it begins, together with its price and effect on the completion date.

The contract should also explain how delays caused by the customer, other contractors, unavailable materials, design changes or unexpected site conditions will be handled. If the customer withholds part of the payment as retention, the percentage and release conditions should be stated clearly.

When subcontractors are used, the main contractor should verify their registration details, VAT status, certificates, insurance, employees and Transparent Worker IDs. The subcontract should also reflect the obligations that the main contractor has accepted towards the customer.

Foreign subcontractors require additional attention. Their employees may need posting notifications, A1 social insurance certificates, Lithuanian Transparent Worker IDs and employment documents available at the work location.

Public Procurement and Construction Tenders

Lithuanian construction companies may compete for contracts published by municipalities, ministries, schools, hospitals, infrastructure organisations and other public bodies.

Electronic public procurement takes place through the Central Public Procurement Information System, commonly known as CVP IS. Registration provides access to public procurement opportunities and allows suppliers to submit tenders electronically. Information about the system is available from the Lithuanian Public Procurement Office.

Construction tenders may require evidence of previous projects, minimum turnover, financial capacity, insurance, certified specialists, contractor qualification certificates and access to suitable equipment. Suppliers may be excluded for unpaid taxes, social insurance debts, false declarations or serious failures during previous public contracts.

A newly established company without its own project history may find it difficult to meet some tender requirements. Depending on the procurement conditions, it may be possible to participate as a subcontractor, submit a joint tender or rely on another eligible company’s capacities. Any such arrangement must be genuine and properly disclosed.

How Much Does It Cost to Start a Construction Company in Lithuania?

There is no single amount that applies to every construction business. The required budget depends on the chosen legal structure, certification requirements, number of employees, insurance, equipment and working capital needed for the first contracts.

A UAB requires minimum share capital of €1,000. An MB can be established without traditional share capital, but the legal structure should be selected according to the planned scale of the business rather than simply choosing the cheapest option.

If certification for work on special structures is required, SSVA currently charges a separate assessment fee. As of 2026, the published fee for certification as a contractor of special structures is €550. Additional costs may arise from translations, document preparation, specialist employment and supporting certificates.

The largest initial requirement is often working capital rather than company registration. A contractor may need to pay for materials, wages, accommodation, transport, insurance and subcontractors before receiving the next staged payment from the customer.

A realistic budget must therefore account for company formation, share capital where applicable, professional certification, insurance, tools, vehicles, employee costs, protective equipment, accounting and enough cash to finance the early stages of a project.

Common Mistakes to Avoid

One of the most common mistakes is assuming that registering a company with a construction EVRK code gives it permission to undertake every project. The activity code describes the business, but qualifications and certificates must be evaluated separately.

Another frequent error is using outdated EVRK codes. Since 2025, newly registered companies should use EVRK 2.1. For example, the construction of residential and non-residential buildings is now classified under 41.00 rather than the former 41.20.

VAT mistakes are also common. Reverse-charge VAT should not be applied automatically to every construction invoice. The customer’s VAT status and the legal nature of the service must be checked first.

Companies also create unnecessary risk by allowing unverified subcontractors or workers onto a construction site. Employment status, Transparent Worker IDs, insurance, posting documents and professional qualifications should be checked before work begins.

Finally, additional work should never depend entirely on verbal instructions. Every change affecting the price, materials, scope or completion date should be approved in writing.