RUNNING BUSINESS IN LITHUANIA

CONTRACTS

Many of agreements people and companies make are verbal. However, a written agreement makes things easier for the seller and purchaser, and reduces the risk of the parties interpreting the content of the agreement differently. There also are some types of contracts which must be in written or even notarized.

CONTACT US for individual legal advise if you need to draw or review a contract.

CORPORATE DOCUMENTS

The set of registration and other corporate documents is the “face” of the company. Accordingly, these documents must be comprehensively prepared and in compliance with the local statutory laws as the company's future performance and business reputation depend on them.


CONTACT US for individual legal advise.

OTHER CATEGORIES

There are many categories of documentation which must be prepared and confirmed depending on company's activity. Whether they concern employment regulations, health and safety training of employees, evaluation of occupational risk or other categories - management of the company must take care of this.

CONTACT US for advise on the documents you may need and how to prepare them correctly.

INVOICING

 Invoicing procedures in Lithuania have been harmonized with the EU directives: electronic invoices may be used, the buyer may issue 
invoices, and a favorable procedure of 
invoice storage has been introduced. 
If mandatory data is missing, such 
documents are not recognized for tax
purposes.

Read our blog post about requirements for invoicing in Lithuania 
or
CONTACT US for individual advise.

BOOKKEEPING

It is necessary to follow all the applicable
Lithuanian requirements for accounting
and bookkeeping of other company
documents. Documents must be kept in
Lithuanian and, if necessary, they may
be kept in two languages as well. Documents
must contain certain mandatory data of
the parties to the transaction. Having a qualified accountant in the company is highly recommended.

Take a look at bookkeeping prices 
or
CONTACT US for individual consultation on bookkeeping services.

AUDIT

Audit is mandatory for all Lithuanian companies meeting two of the three below listed criteria: (1) Revenues from sales exceeded 3,500 kEUR over the past accounting year, (2) over the accounting year, the average number of employees was at least 50, (3) assets on the balance sheet exceeded 1,800 kEUR.

CONTACT US for individual recommendations concerning company audit.

VAT

Lithuanian VAT rules on the format and information to be provided on invoices conform to the obligations of the EU VAT Directive and its VAT invoice requirements. VAT rate in Lithuania is 21%, VAT returns are processed every month. 

CONTACT US for individual advise.


TAX ISSUES FOR NON-RESIDENTS

Lithuania has concluded more than 50 treaties on avoidance of double taxation
of income and capital and prevention of tax evasion. In order to claim relief from double taxation you may need to prove where you are resident and that you have already paid taxes on your income.

CONTACT US for individual tax advise.

OTHER TAXES

Taxes in Lithuania are levied by the central government and local municipalities.  Social security contributions are collected in a separate social security fund, outside the national budget. Taxes are administered by the State Tax Inspectorate, except tariffs that are administered by the Customs.

CONTACT US for individual tax advise.

HIRING EMPLOYEES

Recruitment services in Lithuania are provided by the State Labour Exchange Office free of charge, or by private recruitment service providers. Employers also recruit by  advertisements, recruitment agencies and personal contacts. Employment contracts are the most common form, though forms of independent contractors and agency workers are growing popularity. Some restrictions and requirements for non-EU residents are in force.

READ MORE about hiring in Lithuania

CONTACT US for individual consultation or recommendation.

HAVING EMPLOYEES

Key terms of every employment contract are description of a position (function or profession) of an employee, his or her wage and work place. The parties can also agree on other benefits for employee, hours of work, confidentiality and non-competition and other provisions. In companies having 20 or more employees, labour Council must be elected.

READ about NON-COMPETITION agreements

CONTACT US for individual advise.

DISMISSING EMPLOYEES

An employee is entitled to terminate employment contract by giving his employer written notice of at least 14 days. Employment contract may as well be terminated by a bilateral agreement. Employer may dismiss employee by noticing him or her 2 months in advance (or, sometimes, instantly). Special rules for dismissing group of people at once apply.

READ MORE about dismissing employees in Lithuania

CONTACT US for individual advise.

PRE-COURT PROCEDURES

Usually, disputes between companies or people are resolved by way of mutual agreement of the
parties. However, in case this first and most simple option fails, each of the parties has a right to summon an action in court. In some cases, an obligatory pre-court procedure applies (for example, in cases concerning the protection of consumer rights)

CONTACT US for a review of your case and individual advise.

DISPUTE SOLVING IN COURT

Unresolved disputes between different companies or between service providers and consumers, legal review usually take place in court. Civil cases are heard by the Common courts of which there are three instances, second court system is that of Administrative courts, which solve disputes against administrative (usually governmental/municipal) institutions. Litigation time in Lithuania largely depends on the case.

CONTACT US for individual information or advise on representation in court.

ARBITRATION AND MEDIATION

As investors tend to resolve disputes in arbitrations, as compared to national courts, the regulation of arbitration in Lithuania is becoming an important legal matter for international businesses.  Alternatively, rather than going to court or arbitration institution, it is getting popular in Lithuania to solve dispute through mediation.

CONTACT US for additional information on arbitration and mediation in Lithuania

WHAT IS AML/KYC?

In short, AML stands for anti money-laundering means in general. Know Your Customer (KYC) is a set of rules and requirements in the process of adhering to the preventive measures necessary to monitor money laundering techniques used by suspected parties. Those rules are applicable to certain types of companies and businesses. Any institution with a good AML compliance department does well to keep their KYC information up to date.

AML/KYC COVERED ENTITIES

Banks, credit unions, financial leasing firms
Insurance companies and brokers
Lawyers, notaries
Tax advisors, auditors, accountants
Investment and management companies
Real estate brokers and agents
Gaming enterprises
Postal services
Dealers in art, antiquities, precious metals and stones, and high-value goods.

AML/KYC POLICY

AML policies must be in accordance with acts of law of the Republic of Lithuania, local and international legal acts and must include KYC procedures, customer identification,
monitoring of the financial transactions and other means.

CONTACT US for information about Lithuanian and EU legislation concerning AML/KYC policies.