Lithuania has steadily become one of the most attractive European jurisdictions for entrepreneurs, investors, and international businesses seeking a secure, efficient, and cost-friendly place to operate.
The country combines EU single-market access, modern digital infrastructure, a transparent legal system, and a highly favourable business environment.
Company formation in Lithuania is known for its speed, clarity, and flexibility, which makes it appealing to both local founders and foreign investors exploring business expansion.
With several different company types available – each suited to different needs – understanding the structure that fits your business model is essential.
Company Types Available in Lithuania
Lithuania provides a wide range of legal structures to accommodate businesses of all sizes – from solo entrepreneurs and freelancers to large international corporations establishing a European presence. The main company types include:
- Private Limited Liability Company (UAB)
- Small Partnership (MB)
- Sole Proprietorship (IĮ)
- Public Institution (VšĮ)
- Association (Asociacija)
- Branch Office of a Foreign Company
- Representative Office
Each entity type has its own legal, tax, and operational characteristics. Some are best suited for commercial activity, while others are designed for non-profit initiatives or specific types of professional services.
Choosing the right structure ensures smoother registration, easier compliance, and long-term operational efficiency.
Private Limited Liability Company (UAB): The Most Popular Company Type in Lithuania
A UAB (Uždaroji Akcinė Bendrovė) is the most commonly registered business entity in Lithuania. It offers strong liability protection, a flexible management structure, and is suitable for nearly all commercial activities.
Due to its credibility and clear legal framework, a UAB is the standard choice for companies in areas such as IT, fintech, logistics, consulting, e-commerce, manufacturing, and international trade.
A UAB can have one or multiple shareholders, all of whom have limited liability up to the value of their shares. The minimum share capital requirement is €1,00, which can also be contributed with non-cash assets. The company must have a director, who can be a Lithuanian resident or a foreign citizen.
The structure is regarded as the most scalable legal form in Lithuania, making it appropriate for investors, startups planning to raise capital, and businesses intending to hire employees and expand internationally.
UAB Registration Costs & Paperwork
The registration process is efficient and can be completed remotely. The typical expenses include:
- State fees and registry charges: Usually low and predictable
- Legal service fees: Vary by provider, often influenced by included services (articles of association, shareholder structure, tax registration, etc.)
- Minimum share capital: €1,000
When comparing company registration fees in Lithuania, the UAB tends to cost slightly more than MB or IĮ due to share capital and more complex governance requirements, but it offers stronger legal protection and a more formal structure – an advantage for most commercial businesses.
Small Partnership (MB): A Flexible Type for Freelancers & Startups
The MB (Mažoji Bendrija) is ideal for small teams, early-stage projects, freelancers, and consultants who need a simple and low-cost business structure.
MBs do not require any minimum share capital, which significantly reduces the financial barrier to starting a business. Members can contribute financially, with assets, or with work, making the structure unusually flexible.
MB management is also simpler than UAB management. There is no requirement for a board or formal meetings, and owners can directly manage the company’s operations.
Many Lithuanian residents choose an MB for starting a consultancy, creative business, small online shop, or other service activity.
MB Registration Fees and Maintenance Costs
The registration fees for an MB are among the lowest in Lithuania. Expected costs include:
- State registration fees: Minimal
- Legal service fees: Lower than UAB due to simplified structure
- Accounting and maintenance: Typically moderate, depending on activity volume
For small-scale businesses and freelancers, an MB often provides the most cost-effective balance of flexibility and limited liability.
Sole Proprietorship (IĮ): For Single Owners & Manual Professions
A Sole Proprietorship (Individuali Įmonė) is designed for individuals who operate alone and perform professional or manual work. This structure allows a straightforward setup and lower operational costs, but the owner bears full personal liability for the business’s obligations.
The IĮ is often used by tradespeople, small-scale service providers, and individuals who do not need a corporate structure.
Since the entity does not separate personal and business liabilities, it is rarely chosen for high-risk sectors or activities involving significant financial commitments.
IĮ Setup Costs & Legal Requirements
A sole proprietorship has very low formation costs:
- State registration fees: Among the lowest
- Documentation: Simple and minimal
- Compliance: Less extensive compared to UAB or MB
However, due to unlimited liability, it is recommended only for low-risk activities and entrepreneurs comfortable with personal financial responsibility.
Public Institution (VšĮ): For Nonprofits and Social Projects
A VšĮ (Viešoji Įstaiga) is a non-profit legal entity created for public benefit activities. It is commonly used in sectors such as education, culture, healthcare, childcare, environmental protection, social support, and community initiatives.
Unlike commercial entities, VšĮ cannot distribute profits to founders; all income must support the organisation’s activities.
A VšĮ can apply for funding from Lithuanian state programs, EU grants, private donors, and international organisations. This structure is ideal for NGOs, public-service projects, and charitable initiatives.
6.1 VšĮ Registration Fees & Compliance Obligations
The costs associated with establishing a VšĮ are moderate:
- Formation fees: Slightly higher than MB due to governance structure
- Required bodies: A director and governing board
- Reporting: Annual financial statements and public activity reports
Organisations must follow strict compliance rules to maintain their non-profit status.
Association (Asociacija): For Communities, Clubs & Professional Groups
An Association is created by a group of individuals or legal entities with shared interests or goals.
This structure is suitable for professional groups, hobby clubs, sports communities, industry unions, and similar networks. Members collectively manage the association and elect a governing board.
Associations can engage in economic activities, although their primary purpose must remain the collective benefit of their members. They can also receive membership fees, donations, or grants, providing flexible financing options.
Association Formation Costs & Documentation
Registration requirements typically include:
- Founding documents signed by members
- A governing body (board)
- Registration fees: Usually moderate
Associations work well for groups aiming to collaborate, promote shared interests, or organise community activities.
Branch Office of a Foreign Company
A branch office allows a foreign company to conduct commercial activities in Lithuania without registering a separate legal entity.
The branch operates under the parent company’s liability and legal framework. This structure is common for companies expanding into the EU market while keeping operations centralised abroad.
Branch offices can hire employees, provide services, sign contracts, and generate revenue in Lithuania. However, the parent company remains fully responsible for obligations arising from the branch’s activities.
Branch Office Registration Costs & Process
Branch registration involves:
- Providing notarised documents from the parent company
- Preparing translated and apostilled incorporation documents
- Covering moderate state and legal fees
- Establishing a local representative
This structure is best for foreign companies that want operational presence in Lithuania without forming a local subsidiary.
Company Registration Fees Comparison (UAB vs MB vs IĮ vs VšĮ)
Below is a practical cost comparison:
| Company Type | State Fees | Capital Requirement | Accounting Cost | Liability | Best For |
|---|---|---|---|---|---|
| UAB | Medium | €1,000 | Medium–High | Limited | SMEs, startups, international businesses |
| MB | Low | None | Low–Medium | Limited | Freelancers, small teams, early-stage businesses |
| IĮ | Low | None | Low | Unlimited | Single-owner service businesses |
| VšĮ | Medium | None | Medium | Limited | Social projects, NGOs, public-benefit organisations |
This comparison helps determine which structure aligns best with your financial capabilities and risk tolerance.
How to Choose the Right Company Type in Lithuania
The ideal legal structure depends on:
1. Liability tolerance: UAB and MB offer limited liability; IĮ exposes the owner to full personal responsibility.
2. Business goals
- UAB fits growth, investment and international trade.
- MB supports small, flexible operations.
- VšĮ and associations serve non-profit missions.
3. Budget: UAB requires capital; MB and IĮ do not.
4. Number of founders: MB and associations are ideal for teams; UAB works for both individuals and groups.
5. Long-term potential: Businesses expecting to scale generally choose a UAB due to credibility and investment readiness.
How Lawhill Helps You Register Any Company Type in Lithuania
Lawhill is a trusted Lithuanian legal firm with over 13 years of experience in company formation, corporate law, and ready-made companies.
Our team helps clients from around the world register all types of Lithuanian companies, including UAB, MB, IĮ, VšĮ, associations, branches, and representative offices.
We provide complete, remote-friendly legal support:
- Drafting and submitting all documents
- Structuring the company in compliance with Lithuanian law
- Managing tax registration, legal address, and accounting setup
- Offering ready-made UAB companies with existing bank accounts
- Handling corporate changes such as capital increases, board appointments, or restructuring
Our experts ensure a smooth, compliant, and stress-free company formation process so you can focus on growing your business.
Conclusion
Lithuania provides a wide range of business entity options suited for entrepreneurs of all backgrounds – startup founders, freelancers, international corporations, and nonprofit organisations.
Each company type offers unique benefits in terms of liability, taxation, cost, and operational flexibility.
By selecting the right structure and working with an experienced legal partner such as Lawhill, business owners can confidently establish a secure and compliant presence in one of Europe’s most dynamic markets.
