Lina Siksniute. Doing Business in Lithuania 07.06.2013

The Baltic Law Firm/ www.LEXTAL.eu
Law Firm LEXTAL
Tallinn-Riga-Vilnius
DOING BUSINESS IN LITHUANIA
June 2013
Attorney at law/ managing partner
Lina-Šikšniutė-Vaitiekūnienė

Estonia
Population: 1.34 million
Latvia
Population: 2.06 million
Lithuania
Population: 2,9 million

THE BALTIC LAW FIRM
Law Firm LEXTAL
• 3 Baltic jurisdictions – Estonia, Latvia, Lithuania.
• ~30 lawyers and 12 working languages.
• Provides full scale of services in all practice areas.
• Acts as one-stop shop for clients in any Baltic country.
• Employs uniform procedures to guarantee the same
service standards across the Baltics.

THE MAIN TOPICS OF THE
PRESENTATION
• Investing in real estate and what is FEZ
• Mostly used types of companies to be set up in Lithuania
• Taxation;
• Visa, temporary and permanent EU residency permits.

THE MAIN FACTS OF LITHUANIA
Size: 65,300 km2. Lithuania is the largest of the 3 Baltic
States in terms of population, territory, and economy.
Population: 2,98 million
Dominant foreign
languages:
English, Russian, German, Polish.
GDP at current prices, EUR
mlrd. 2011/2012/2013
(forecast)
2011 – 30,6; 2012- 32,6; 2013 – 34,6
GDP growth (annual), %
2011/2012/2013 (forecast)
2011 – 5,8%; 2012- 3,6%; 2013 – 3%
Annual inflation, %
2011/2012/2013 (forecast)
2011 – 4,1%; 2012- 3,2%; 2013 – 3%
*Source: Lithuanian Department of Statistics

INVESTMENT ENVIRONMENT
• Strategic location. Lithuania is locates on the crossroads of 3
huge markets (Scandinavia, Western Europe, Russia);
• Lithuania is world leading in ICT (infrastructure of information
and communication technologies);
• Advanced business infrastructure (business friendly
environment);
• Lithuania has made the highest jump in the competitiveness
in the EU during the last two years;
• The high economic growth;
• There is a high level of educated, qualified and quite
inexpensive workforce.

REAL PROPERTY

INVESTMENT IN REAL PROPERTY
OF LITHUANIA
There are no restrictions for foreign investors to
invest into the real property in Lithuania except for
the following:
 Certain land is under exclusive ownership right of the state
and shall not be for sale;
 Agricultural and forestry land shall not be for sale for
foreign investors until 01/05/2014;
 Area of agricultural land acquired by purchase by natural
persons or legal entities shall not exceed 500 ha;
 Term of lease of privately owned land shall not exceed 100
years and the state land – 99 years.

ACQUISITION
OF REAL PROPERTY
 Contracts on transfer of title in real property must be
concluded before a notary public;
 Title in real property is transferred by way of title
conveyance, which must be recorded;
 Title transfer shall be enforced against third persons only if
registered with the real estate register.

ISSUES FOR CONSIDERATION
WHEN ACQUIRING REAL PROPERTY
 Is the title registered? Are there any restrictions?
 What tax implications are attributed to a particular
acquisition?
 Structure the deal considering tax implications.

REGULATIONS OF FREE ECONOMIC
ZONES (FEZ)

FREE ECONOMIC ZONES
IN LITHUANIA
• Free economic zones (FEZ) are the designated areas in
which companies are taxed very lightly or not at all in order
to encourage economic activity.
• There are seven free economic zones in the Republic of
Lithuania (located at Klaipėda, Kaunas, Šiauliai, Kėdainiai,
Panevėžys, Akmenė, Marijampolė)
• Prior permit of managing company of FEZ shall be obtained
• Manufacturing, building, wholesale trade, warehousing,
transport are allowed.
• The retail trade is permitted only for internal need of the
companies in FEZ.

TAX ADVANTAGES IN
FREE ECONOMIC ZONES
Zone companies which invest into capital of zone company
1 mln. EUR make use of these tax advantages:
– Relief of profit tax for 6 years;
– After the term of 6 years, profit tax rate is decreased
50% for 10 years;
– No real estate tax;
- 0 VAT on goods imported to or placed to FEZ.

AREAS OF FEZ IN LITHUANIA
FEZ AREA PLANNED TOTAL
AREA
Kaunas FEZ 294 ha 534 ha
Klaipėda FEZ 260 ha 412 ha
Šiauliai FEZ 218 ha 218 ha
Kėdainiai FEZ 131 ha 131 ha
Panevėžys FEZ 47 ha 47 ha
Akmenė FEZ 99 ha 99 ha
Marijampolė FEZ 78 ha 78 ha

COMPANY TYPES
 Individual activity without incorporation of a legal entity
 Individual (personal) Enterprise
 General Partnership
 Limited Partnership
 Small Company
 Public Company, Private Company
 Permanent establishment
 The Co-operative Society
 The Agricultural Company
 Branch
 Representative Office

DIFFERENCES OF PRIVATE AND
PUBLIC COMPANIES
Private Public
Statutory capital EUR 2,900 EUR 43,450
Number of
Shareholders
Up to 249 Not established
Registration of Shares Not applicable Mandatory
Public sale of securities Prohibited Allowed

TAXATION

TAXATION IN LITHUANIA
Corporate income tax 15% or 5%
VAT 21% (standard rate)
Social security tax 28,5% - 32,6% (varying for different
categories of insured persons)
Personal income tax 15%, 20 % for dividends
Land Tax 0.01% - 4% (depending on local
municipalities)
Real estate tax 0,3% - 3% for legal entities (depending on
local municipalities);
1% from the part of value of property
exceeding 1 mln. LTL (for natural persons).
Dividends General rate is 15% for legal entities;
20% for natural persons.
State land rent 0,1% - 4% depends on the average market
value of the land.

AVOIDANCE OF
DOUBLE TAXATION
Convention between Lithuania- Russia on 01/01/2006
The existing taxes to which this Convention applies are the
following:
Lithuania Russia
Corporate income tax Corporate income tax
Personal income tax Personal income tax
Real estate tax Corporate property tax
Interest on state capital usage Personal property tax

MIGRATION ISSUES

SCHENGEN SHORT-STAY VISA
• Prior to entry into Lithuania an alien should receive a visa;
• Schengen short-stay visa entitles to stay in Lithuania for
up to 3 months during 6 months period counting from
the date of first entry;
• In order to get a Schengen short-stay visa an alien shall
fill in the application and present the documents evidencing
possession of medical insurance, sufficient financial funds
for stay in Lithuania, verified invitation letter and etc.
• The decisions regarding the issuance of visa is made within
15 days after receipt of the application. In special cases
the term may be extended to 60 calendar days.

UAB
owner
and
director
Owner, whose
stay is necessary
to attain the aims
of enterprise
director
co-owner, whose
stay is necessary
to attain the aims
of enterprise
The authorized
capital
14 500 EUR
The authorized
capital
2900 EUR
Respective part of the
authorized capital
owned by the alien
14 500 EUR
The authorized
Capital
14 500 EUR

TEMPORARY
RESIDENCE PERMIT
• Required documents:
• valid travel documents;
• completed application form;
• document proving that an alien has or receives sufficient
income for living in Lithuania (290 EUR per month).
• document, proving that an alien has premises for residing
or rents premises;
• a valid document confirming possession of medical
insurance (5 800 EUR)
• other.
• A temporary residence permit is usually issued for a period of
one year.
• The respective decision is adopted not later than within 6 months
upon receipt of the application (2 months period is for the
replacement of a temporary residence permit).

PERMANENT RESIDENCE PERMIT
• A permanent residence permit grants a foreign individual
the right to continuously live in Lithuania.
• A permanent residence permit can be issued if:
– the alien has been residing in the Republic of Lithuania
uninterruptedly for the last five years holding a
temporary residence permit
– an alien passed an exam of the Lithuanian language
and
– passed an exam of the basic principles of the
Constitution of the Republic of Lithuania.

THANK YOU
FOR YOUR ATTENTION!
The content of the presentation cannot be applied as legal counselling as this
will always be subject to actual and specific knowledge of the client’s situation.

Lina Siksniute. Doing Business in Lithuania 07.06.2013

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (16)

Semelhante a Lina Siksniute. Doing Business in Lithuania 07.06.2013

Semelhante a Lina Siksniute. Doing Business in Lithuania 07.06.2013 (20)

Mais de Awara Direct Search

Mais de Awara Direct Search (20)

Último

Último (20)

Lina Siksniute. Doing Business in Lithuania 07.06.2013