The tiny, fast-growing economy of Lithuania has been successful in transferring from Soviet-era industries to a service-based economy. The country’s tech industry is particularly booming: the capital city of Vilnius recently became the world’s fastest growing startup ecosystem, with over 400 tech companies opening in a single year. Additionally, Lithuania’s business climate is ideal for startups. According to the World Bank’s 2019 Doing Business Report, Lithuania was listed as one of the world’s top ten reformers.
Overview of Starting a Business in Lithuania
Lithuania is ranked as an “upper-middle income” country by the World Bank, with a GDP per capita of $22,100. While the country has a healthy economy overall, its economy is naturally sensitive to the economic health of its neighboring countries. As a member of the European Union (EU) and the Eurozone, Lithuania’s economy is greatly influenced by the performance of its EU trading partners, including Germany, the United Kingdom, and France. As far as business conditions are concerned, there are a number of reasons why now might be the perfect time to start a business in Lithuania. First, the country’s economy continues to grow, expanding at a rate of 2.9% in 2018. This is an increase from the prior year, when the economy grew by only 1.4%. In addition, Lithuania’s GDP per capita is expected to increase as well, from $22,100 in 2018 to $23,500 in 2019.
Company Registration
To legally operate a business in Lithuania, you must register your company with Lithuanian authorities. You can do so by visiting the Registry of the Commercial Registry and submitting a declaration of establishment form. The declaration form is in Lithuanian, but you can have a friend or colleague translate it for you if needed. Although the government website says that the declaration of establishment form is only available in person, anecdotal reports from entrepreneurs indicate that you can also submit the form online. However, you will also need to visit the commercial registry in person to submit supporting documents and payment for your business registration.
Licensing Process
Even though you will need to register your company before beginning to operate, you will also need to obtain an operating license from the Department of Health. In order to apply for the license, you will need to visit the Department of Health website and download the application packet for food business operators. The application packet contains instructions for completing the application as well as a list of required documents. Once you have completed the application and submitted the required documents, officials at the Department of Health will review your application and inspect your facility before issuing you a license.
Taxes for Small Businesses
Lithuanian tax law treats business entities differently based on their legal status. For example, the Stamp Tax and the Corporate Income Tax apply only to companies and limited liability companies (LLCs). Conversely, income tax applies to partnerships and sole proprietorships. Stamp tax is a tax on commercial transactions, and it applies to businesses regardless of their legal status as well as to individual persons who are engaging in buying and selling activities as part of their business. Corporate income tax applies to companies and LLCs, and it generates the largest share of government tax revenue in Lithuania. Income tax applies to sole proprietorships and partnerships, and it is the third largest source of government tax revenue.
Key Industries to Start With
If you are not sure what business to start in Lithuania, you might want to consider some of the top industries for entrepreneurs in the country. These industries include technology, healthcare, and construction. Lithuania is currently experiencing a tech boom. It has become a hotbed for development, and many companies are choosing to expand to the country to take advantage of the low operating costs and access to a skilled workforce. Healthcare is another promising field for entrepreneurs in Lithuania. The country offers a robust and reliable health insurance system, which means there is a significant need for medical staff. In fact, the country is experiencing a shortage of doctors and nurses. Lastly, construction is another booming industry in Lithuania. The government is investing heavily in infrastructure, and there is a shortage of workers in the construction sector.
Conclusion
This article details where you can start a business in Lithuania and why now might be the perfect time to do so. Lithuania is a small and fast-growing economy that has been successful in transitioning from Soviet-era industries to a modern, service-driven economy. The country’s tech scene is especially booming, and the capital city of Vilnius was recently named the fastest growing startup ecosystem in the world. Additionally, the country’s business climate is favorable for entrepreneurs. This makes Lithuania an excellent place to start a business.
