Two main company forms in Lithuania – which one should you choose?

We, in Lithuania, have two main company forms for most businesses — MB and UAB. Both are private limited liability companies, and both have their own advantages and disadvantages.

Let’s start with an MB.

Most of our clients choose an MB because it is cheaper and takes less time to open. With an MB, you do not need to hire yourself as a director, while with a UAB you are legally required to appoint a director - either yourself or someone else - and pay a salary along with salary taxes, which are around ±300 EUR/month.

An MB is suitable for most businesses that are just starting and do not plan to raise investments. An MB can have up to 10 shareholders (members), so it is a very good option for freelancers, small business owners, and other activities. The minimum initial share capital for an MB is just 1 EUR.

How much does it cost to open an MB and how long does it take?

It costs 750 EUR to open an MB if there is one owner, and 800 EUR if there are 2 or more owners. All government fees and the company registration address are included in the price. It takes 2-3 weeks to complete the registration.

Who should choose a UAB?

Most of our clients who choose to open a UAB usually already have a larger business or plan to raise investments. A UAB can have up to 249 shareholders, and its minimum initial share capital is 1,000 EUR.

How much does it cost to open a UAB and how long does it take?

It costs 1,200 EUR to open a UAB. All government fees and the company registration address are included in the price. You will not have any extra charges or hidden costs. It takes around 3–4 weeks to fully complete the registration.

Do banks or other institutions treat MBs and UABs differently?

No, that is a myth. Institutions generally do not care about the legal form of your company. Both MB and UAB are well-recognized company structures, and you should not face any problems with banks or other institutions if you choose an MB instead of a UAB.

Can a company be opened remotely?

Both MB and UAB can be opened remotely. We only need copies of all shareholders’ IDs or passports, the company name, planned activities, and the amount of initial share capital. Everything else will be handled completely remotely by our team.

Taxes

In Lithuania, corporate income tax rates are 7% and 17%.

If your company’s annual revenue does not exceed 300,000 EUR, you will pay 7% corporate income tax. If your annual revenue exceeds 300,000 EUR, the tax rate becomes 17%.

Example: if your revenue is 100,000 EUR and your expenses are 60,000 EUR, your profit is 40,000 EUR. You would pay 7% corporate income tax on the 40,000 EUR profit, which would be 2,800 EUR.

How to proceed?

Please send us the requested information listed below. Once we receive the information, we will issue an invoice, and after the invoice is paid, we will begin the process

1. Company name. Please check the name in the trademark database to ensure your desired company name is not already a registered trademark. Database: https://branddb.wipo.int/en/quicksearch

2. Initial share capital (minimum 1€ for an MB)

3. Company activities;

4. Shareholders full name, surname, personal number (if it appears on ID or passport), date of birth, and complete address;

5. If there is more than one owner, please mention who will be the director of the company;

6. Company form: UAB or MB.

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E-Mails: info@balticincorp.com or info@startbusiness.lt