Types of Companies in Lithuania
Lithuania offers one of the most business-friendly environments in the EU, and choosing the right type of company is the first - and most important - decision you'll make. The wrong structure can cost you in taxes, compliance, and flexibility down the line.
The main types of companies in Lithuania are:
UAB - Private Limited Liability Company
MB - Small Partnership (Limited Liability Company as well)
VsI - Public Institution (non-profit)
II - Sole Proprietorship
AB - Public Joint-Stock Company
This guide breaks down each structure - who it's for, what it costs, and how it's taxed, so you can make the right call before registering a company for yourself.
UAB - Private Limited Liability Company
The UAB is by far the most popular legal structure in Lithuania. According to the Centre of Registers, UABs account for the majority of all registered legal entities in the country - and for good reason.
Who is it for?
The UAB suits entrepreneurs who want a credible, scalable structure - especially those seeking investment, planning to hire staff, or operating in international markets. It's the go-to choice for startups, trading companies, and service businesses.
Tax overview
Corporate income tax: 7% (if you do not exceed 300 00 EUR annual revenue threshold) and 17% (if you do)
VAT registration threshold: 45,000 EUR in the last 12 months. If you exceed mentioned threshold within 12 months, you will have to register for VAT. VAT is 21% in Lithuania.
From 2026, newly incorporated UABs benefit from 0% corporate tax for the first two years, provided annual revenue stays below 300,000 EUR and all participants are natural persons.
MB - Small Partnership
The MB is Lithuania's most flexible structure for small businesses and freelancers. It was introduced specifically to reduce administrative burden for micro-businesses.
Key facts
Minimum capital contribution: 1 EUR
Number of members: 1–10
Director: A member acts as manager (no separate employment contract required)
Accounting: Can be simplified; professional accountant not always mandatory
Who is it for?
The MB is ideal for solo founders, freelancers, small service providers, and anyone who wants to start lean without a large upfront capital requirement. It's also popular with digital nomads and remote workers relocating to Lithuania.
Tax overview
Corporate income tax: 7% (if you do not exceed 300 00 EUR annual revenue threshold) and 17% (if you do)
VAT registration threshold: 45,000 EUR in the last 12 months. If you exceed mentioned threshold within 12 months, you will have to register for VAT. VAT is 21% in Lithuania.
VsI - Public Institution (Non-Profit)
The VsI is a non-profit legal entity used by organisations that reinvest all revenue into their stated public or social mission. Despite the "public" label, a VsI can be founded by private individuals.
Key facts
Minimum capital: No minimum
Founders: Natural or legal persons
Profit distribution: Not allowed - all surplus must be reinvested
Tax: Generally exempt from corporate income tax on core non-commercial activities
Who is it for?
NGOs, educational institutions, cultural organisations, social enterprises, and community projects. It's also used by some businesses as a holding structure for specific activities.
II - Sole Proprietorship
The II (Sole Proprietorship) is the simplest business form in Lithuania - a one-person business where the owner and the company are essentially the same legal entity.
Key facts
Minimum capital: None
Liability: Unlimited — the owner is personally liable for all business debts
Participants: One natural person only
Accounting: Simplified, but still required
Who is it for?
Small traders, craftspeople, and sole operators who want the simplest possible setup and accept personal liability. Not recommended for high-risk activities or anyone with significant personal assets.
Important caveat
Because of unlimited personal liability, the II is becoming less popular. Most founders who would previously have chosen II now opt for an MB instead - same simplicity, but with limited liability.
AB - Public Joint-Stock Company
The AB is the large-scale equivalent of the UAB. It's designed for companies that plan to list on a stock exchange or raise capital from the general public.
Key facts
Minimum share capital: 40,000 EUR
Shareholders: Unlimited
Shares: Freely transferable; can be listed publicly
Compliance: Significantly higher - annual audits, board requirements, public reporting
Who is it for?
Large enterprises, holding companies, and businesses planning an IPO or significant institutional investment. For most SMEs and startups, the UAB is a more practical alternative.
What Type of Company Do Most Foreign Entrepreneurs Choose?
For foreign founders - whether EU citizens or non-EU nationals - UAB or MB is the default recommendation. It's internationally recognised, easy to open a business bank account with, and straightforward for VAT registration across the EU.
The MB is a strong second choice for solo founders or small teams who don't need external investment and want to minimise costs and paperwork.
Neither the II nor the AB is typically recommended for new foreign-owned businesses.
Conclusion
When choosing between the types of companies in Lithuania, three things matter most: your liability appetite, your funding plans, and how lean you want to operate.
UAB - the most credible and scalable option, ideal for growth-focused businesses and foreign investors.
MB - the leanest structure, perfect for solo founders and freelancers who want limited liability without the complexity.
VsI / II / AB - niche structures suited to specific use cases.
If you're unsure which structure fits your situation, our team can advise you at no cost before you commit to anything.
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