What Is an MB Company in Lithuania? (Simple Guide)

Lithuania gives entrepreneurs a choice of legal structures — and the MB (mažoji bendrija, or "small partnership") is the one most solo founders get wrong by overlooking it entirely.

An MB (small partnership) is a limited liability company in Lithuania designed for individuals and small teams. It requires a minimum contribution of just €1, does not require a director, and is simpler and cheaper to run than a UAB (private limited company). It is the most cost-effective legal structure for freelancers, consultants, and small online businesses operating in the EU.

If you are considering formalising your business in Lithuania, this guide covers exactly what an MB is, how it compares to a UAB, what taxes you will pay in 2026, and how to register one - with up-to-date figures from Lithuania's revised corporate tax rules.

What Is an MB Company?

The MB (small partnership) was introduced under Lithuanian law in 2012 specifically to give small operators a lighter, more practical alternative to the UAB.

An MB is a separate legal entity — its debts and obligations belong to the company, not to its individual members personally. Members are protected by limited liability, meaning their personal assets are shielded from business obligations.

Key facts at a glance:

1. Members: 1 to 10 natural persons only — legal entities cannot be members

2. Minimum capital: From €1

3. Director: Not required — members manage the company directly

4. Limited liability: Yes — personal assets are protected

5. Payment processors: Accepted by Stripe, PayPal, and other major platforms

6. Share structure: None — the MB does not issue shares

The absence of a mandatory director is not a minor detail. It is one of the most financially significant differences between an MB and a UAB, and it is covered in full below.

Who Is an MB Best Suited For?

The MB is not the right structure for every business. It is the right structure for a specific type of operator.

An MB works best if you are:

• A freelancer, consultant, or solo service provider looking for EU-based legal status

• A small team of up to 10 people working without outside investors

• An e-commerce or digital business that needs to accept Stripe, PayPal, or other major processors

• A foreign entrepreneur wanting a low-overhead Lithuanian entity without travelling to Lithuania

• Someone who wants to keep running costs minimal and avoid mandatory director salary obligations

An MB is not the right choice if you plan to raise investment, bring in corporate shareholders, or need a structure that signals formal credibility to large institutional clients. In those cases, a UAB is the appropriate choice.

MB vs UAB: What Is the Difference?

This is the question almost every founder asks. The comparison is straightforward on paper — but one difference matters far more than the others.

The hidden cost of a UAB most people miss

With a UAB, a director must be formally employed by the company — whether that is you as the owner or someone else. Under Lithuanian law, even a director hired at quarter-shift is taxed on the basis of the full minimum wage.

In practice, this means approximately €350 per month in mandatory social taxes, regardless of how many hours the director actually works. That is over €4,000 per year in unavoidable overhead before you have paid yourself a single euro in profit.

With an MB, there is no director requirement and no such obligation. For small businesses and solo operators, this alone makes the MB the more economical choice.

How Is an MB Taxed in Lithuania in 2026? {#mb-taxation}

This is where the picture changed significantly at the start of 2026. If you have been reading older guides, the tax rates you have seen are out of date.

Corporate income tax (CIT) — updated 2026 rates

Lithuania revised both its corporate income tax rates upward by one percentage point in January 2026. The current rates are:

The zero-rate period is a genuine two-year tax holiday for qualifying new companies — not a deferral. For a startup or small consulting business reinvesting early profits, this is a significant structural advantage. (Source: VMI — vmi.lt; Lithuanian Ministry of Finance — finmin.lrv.lt)

Important: Companies registered via a transfer method — where the company is first set up under the agency's name and then transferred to you — do not qualify for the 0% holiday. The applicable rate in that case starts at 7% from day one. If the 0% period is a priority, the company must be registered directly in your name.

VAT

VAT registration is mandatory once annual turnover exceeds €45,000. Below that threshold, registration is voluntary. The standard VAT rate in Lithuania is 21%, with reduced rates of 12% and 5% applying to specific categories such as books, medicines, and accommodation. (Source: finmin.lrv.lt)

How to Register an MB in Lithuania

To register an MB company in Lithuania, you will need to provide the following:

1. A unique company name — make sure your chosen name is not already registered by an existing Lithuanian company and does not infringe on any trademarks. You can check name availability through the Centre of Registers.

2. ID or passport copies for all owners — every person who will be a member of the MB must provide a clear copy of their passport or national identity card.

3. Your business activities — a description of what your company will do, used to assign the correct NACE activity codes at registration.

4. Starting share capital — an MB can be established with a contribution of as little as €1.

Once we receive this information, we begin the process. We register the company under our name first, then transfer full ownership to you once everything is set up. This is the fastest, easiest, and most affordable method available — and the entire process takes approximately 2–3 weeks.

Alternatively, you can register the company by visiting Lithuania in person or by granting a Power of Attorney to a local representative. Both options are valid, but they take longer and typically cost at least €500 more.

What Are the Ongoing Obligations of an MB?

An MB has a manageable set of ongoing compliance requirements:

• Annual financial statements submitted to the Centre of Registers

• Corporate income tax return filed with VMI

• VAT returns if VAT-registered (monthly or quarterly)

• Sodra contributions for working members (self-employed rate applies — verify current rates at sodra.lt as these are subject to annual revision)

• Bookkeeping — simplified accounting is permitted for qualifying small MBs

For most MBs, monthly bookkeeping through a Lithuanian accounting service costs between €50 and €150 depending on transaction volume.

Conclusion

Three things to take away about MB companies in Lithuania:

1. An MB is a limited liability small partnership requiring just €1 in starting capital, no director, and significantly lower running costs than a UAB — making it the right structure for most freelancers and small businesses.

2. As of January 2026, qualifying new MBs pay 0% corporate income tax for the first two years, then 7%thereafter — provided annual revenue stays below €300,000. These are the updated 2026 rates; older sources citing 5% or 6% are out of date.

3. The MB works with Stripe, PayPal, and all major payment processors, can be registered entirely remotely, and does not require a Lithuanian resident director.