Business guide Lithuania 2018
General, tax and legal information for foreign investors. Table of Contents
Country managing partner’s foreword 3 General information 4 Facts and figures Politics Economic environment 8 Key economic indicators Attractive sectors Regional and urban economic overview and trends Setting up a business 12 Ease of doing business Types of entities Accounting and audit requirements Share option plans Investment incentives 14 Investment financing Legal framework Double tax treaties Free economic zones Investment in real estate and land Investment protection and guarantees Labour 18 Conclusion of an employment agreement Working conditions Termination of an employment agreement State social security issues Immigration & permits 20 EU citizens Non-EU citizens Tax system 22 Corporate income tax (CIT) Withholding tax (WHT) Value added tax (VAT) Personal income tax Social security Other taxes Useful links in Lithuania 33 PwC 34 Contacts 35
© 2018 PricewaterhouseCoopers UAB. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. Country Managing Partner’s Foreword
It is a great pleasure for me to pre- the most dynamically developing city sent the Business Guide of Lithuania in the CEE region. 2018. The Guide offers a useful Here, at PwC Lithuania, we’re de- insight into the Lithuanian busi- lighted to share our insights to make ness environment for the potential your first steps in the Lithuanian individual or corporate investors. It market as easy as possible. We’re provides answers to the most com- ready to help you with a full range mon questions that the investors may of business, tax and legal issues. Our have: from business set-up to the people have extensive expert knowl- most relevant upcoming changes in edge and professional experience, the regulatory system of the country. and they are willing to offer profes- Our team at PwC Lithuania has also sional services tailored to the needs prepared an overview of the local of your business. economic environment, legal require- Rimvydas Jogėla ments, educational advantages and Managing Partner governmental incentives for investing for PwC Lithuania in Lithuania. We’re happy and proud that, despite the changing geopolitical environ- ment, Lithuania is able to maintain stable economic growth. It is not therefore surprising that in 2017, for the third year in a row, Vilnius – the capital of Lithuania – was elected as
Business Guide Lithuania 2018 3 General information
Facts and figures den and Denmark lie. Extending to 65,300 sq. km, Lithuania is a coun- try larger than Belgium, Denmark, Geography the Netherlands or Switzerland. The Republic of Lithuania is situated Lithuania has around 99 km of sandy in Northern Europe on the south- coastline devoted to a combination of eastern shore of the Baltic Sea. It is leisure and conservation. Lithuania the largest of the three Baltic States, has an ice-free port in Klaipėda, the other two being Latvia and Esto- which is the most important and the nia. Lithuania shares its borders with biggest Lithuanian transport hub, Latvia in the north (558 km), Belarus connecting sea, land and railway in the south-east (653 km), Poland routes from East to West. and the Kaliningrad Region of the The climate is midway between Russian Federation in the south-west maritime and continental. In January (104 km and 249 km, respectively). the average daytime temperature is To the west of the Baltic Sea Swe- -3°C (27°F), rising in July to +20°C (68°F).
Country facts Estonia
Capital Vilnius Latvia
Area 65,300 km² Lithuania Population 2.9 million Language Lithuanian Dominant languages English, Russian, German, Polish Currency Euro (EUR)
Source: Statistics Lithuania
4 Business Guide Lithuania 2018 Vilnius Old Town is a UNESCO World Heritage Site
Population and language The population of Lithuania is 2.9 million. Some 86.9% of the popula- tion are ethnic Lithuanians, 5.6% are Poles, 4.6% are Russians, and 2.9% - others. Lithuania is the largest of the three Baltic States, but globally it is a small country. Its capital and the largest city is Vilnius with a population of The New York Times ranks Vilnius 545 thousand. The second and the third largest cities are Kaunas and as one of the best places to live. Klaipėda with a population of 293 thousand and 151 thousand, respec- Vilnius is among 5 most affordable tively. The official and most commonly EU cities to live in. spoken language is Lithuanian. It is one of only two living languages (the other one being Latvian) of the Baltic branch of the Indo-European language family. About 95% of the population speak one foreign language (English, Russian, German or Polish) and more than 50% speak two foreign languages. 95% Time, weights and measures Lithuania uses Eastern European of working-age Time, which is two hours ahead of Lithuanians Greenwich Mean Time (GMT+2 know at least hours). Every year, between March and September, Lithuania intro- one foreign duces Daylight Saving Time (GMT+3 language hours). Lithuania uses the metric Lithuania system of weights and measures and the Celsius temperature scale. ranks second globally for Codes entrepreneurship The international extension code for Lithuania is 00 370. of managers The country code used in the Inter- net domain names is .lt.
Business Guide Lithuania 2018 5 Politics • According to the Constitution of the Republic of Lithuania (adopted in 1992), Lithuania is an inde- pendent democratic parliamentary republic. • The supreme executive power rests • The supreme legislative power is with the Prime Minister who is held by the Seimas (Parliament), appointed by the President and the consisting of 141 members elected Parliament. Currently, the position for a term of four years on the of the Prime Minister is held by Mr basis of universal, equal and direct Saulius Skvernelis, one of the lead- suffrage and by secret ballot. Cur- ers of the Lithuanian Farmers and rently, Lithuania’s ruling coalition Greens Union. consists of the Lithuanian Farmers • Lithuania has 60 municipalities and Greens Union and the Social governed by mayors which starting Democratic Party. from 2015 are directly elected for • The President of Lithuania is four-year term. elected for a five-year term on the • Lithuania joined NATO on 29 basis of universal, equal and direct March 2004. On 1 May 2004, suffrage and by secret ballot. The Lithuania became a full member President represents the state of of the European Union, and joined Lithuania and performs the func- the Schengen Area on 21 Decem- tions prescribed to him/her by the ber 2007. Constitution and other laws. Cur- • In June 2015, the Lithuanian rently, the President of Lithuania is delegation received an official Ms Dalia Grybauskaitė, who is the invitation to start accession process first female president in the Lithu- to the Organisation for Economic anian history. She was re-elected Cooperation and Development for the second term in 2014. (OECD). The first positive opinion was issued by the OECD Trade Committee on 22 April 2016. The Lithuanian authorities are in process of an intense technical accession, which is expected to be completed during 2018.
Lithuania’s court system
Supreme Supreme Administrative Constitutional Court Court Court
Court of appeals 5 regional administrative courts
5 regional courts
49 district courts
6 Business Guide Lithuania 2018
Economic environment
Key economic investment levels and growing cus- tomer consumption are also impor- indicators tant factors that have considerable influence on Lithuania’s economic Due to accelerated international recovery and growth. trade and significantly greater Booming shared service centres production, global economic activ- 2.0% ity has been recently expanding. Vilnius is attracting higher added value jobs such as business analytics, GDP growth The improved economic situation of Lithuania’s major export partners anti-money laundering, asset man- in 2018* (i.e. Estonia, Latvia, Poland, Russia agement support, and IT develop- and Germany) has also had a positive ment. More and more shared service effect on the country’s economy. Both centres choose Lithuania as their exports of products and exports of destination due to highly skilled well- services have been picking up the educated professionals that are able 3.3% pace. Yet international environment to speak several foreign languages, a is not the only factor contributing world-class infrastructure and a good GDP growth to the growth of the Lithuanian location. in 2017* economy. According to economists, Currently, there are more than fifty declining unemployment, increased shared service centres in Lithuania that provide worldwide high-qual- ity services. Overall, the sector has Lithuania’s economy is rapidly growing grown by 82% during the last three years.
The main macroeconomic indicators for 2013–2018 Infrastructure Lithuania is situated at the heart 2013 2014 2015 2016 2017* 2018* of Europe, thus making it easy and Nominal GDP (EUR billion) 35.0 36.6 37.3 38.6 40.0 41.3 convenient to access other European GDP growth rate, % 3.5 3.0 1.7 2.3 3.3 2 cities. There are four international airports in Lithuania, which offer di- Average annual inflation, % 1.2 0.2 -0.7 0.8 3.2 2.2 rect flights of up to three hours to the Unemployment rate, % 11.8 10.7 9.1 8.0 7.3 7.1 main business destinations. The road * Forecast network of Lithuania is also well de- Source: Statistics Lithuania and Bank of Lithuania forecasts veloped. Lithuania has more than 71 thousand kilometres of roads whereof Inward foreign direct investment by country 91% are paved roads. (outstanding amounts at the end of 2016, EUR million) Attractive sectors Sweden, 2,599 18.7% Netherlands, 1,834 13.2% Information and communication technology sector is one of the highly Germany, 1,040 7.5% prioritised and most promising sec- Poland, 977 7.0% tors in Lithuania. Over 31,500 IT pro- fessionals in Lithuania are working Cyprus, 922 6.6% in this sector. Modern technologies Norway, 899 6.5% (such as EDGE technology, 4G mobile Estonia, 739 5.3% communications infrastructure and mobile WiMAX 4G Internet), the fast- Denmark, 598 4.3% est public Wi-Fi in Europe and the Finland, 589 4.2% greatest fibre-optic (FFTH) Internet network penetration in Europe – all Malta, 489 3.5% these factors make Lithuania espe- Other countries, 3,240 23.3% cially attractive for offshore services.
Source: Bank of Lithuania
8 Business Guide Lithuania 2018 Lithuania’s engineering industry Another high-tech sector in Lithuania regulations, including the regulations has been constantly growing and is laser technologies. Lithuania on the obtainment of an e-money expanding by approximately 15% accounts for more than half of the or payment license that is 2–3 times every year since 2009. This industry global market of picosecond laser faster than in other EU jurisdictions. is highly competitive in terms of cost speedometers. A world-class quality Direct access to SEPA can be gained and quality and it is well-integrated of laser production has been recog- via a Bank of Lithuania API. It is also into the global supply chains. Prod- nised by nearly 100 countries import- possible to issue your own IBANs. ucts developed by the Lithuanian ing over 90% of the Lithuanian laser Moreover, a one-year sandbox period engineers are often adapted by such production. Such companies and of friendly regulation without any international companies and organi- organisations as NATO, Pentagon, sanctions is available for start-ups. sations as NASA, Boeing, U.S. Army, Nuclear Research Centre in Israel, Up to 10 Fintech start-ups were BMW, Volkswagen, Hitachi, Siemens Rezerford Laboratories in England, established in Vilnius over the last and Mitsubishi. Berkley University, Livermore Na- year. Such companies as Barclays, Lithuania’s biotechnology sector has tional Laboratory are the clients of Western Union, deVere Group, Nas- been recognised as one of the most the Lithuanian companies producing daq, Revel Systems and other have developed in the Central and Eastern lasers. Following an official invita- already chosen Lithuania as one of Europe. Biotechnology research takes tion, Lithuania is in a preparatory their go-to places to do business. It place in Lithuania, and the developed stage to join the ELI Delivery Consor- is also planned to open Europe’s first techniques and products are applied tium International Association (ELI- international blockchain centre in in the fields of medicine, pharmacy, DC AISBL) which was founded to Vilnius in early 2018. chemistry, agriculture, environ- promote the sustainable development Renewable energy development is ment, etc. Lithuania’s biotechnology of ELI, the world’s first international becoming increasingly important for products are recognised worldwide, laser research infrastructure, and to Lithuania’s export, too. Emerging po- as 90% of them are exported to over support the coordinated implemen- tential of clean technology industry 100 countries. The main export mar- tation of the ELI research facilities. is supported by the pool of local sci- kets include the USA, Japan, Israel, The sector grows on average by more entists and researchers, world-class Germany and the United Kingdom. than 10% annually. achievements in electronics, and Different R&D incentives are of- The Fintech sector falls among the increasing interest of businesses with fered to support the development of most promising and growing sectors respect to the development of this biotechnology sector in Lithuania. in Lithuania. It is highly supported industry. Lithuania seeks to increase The sector grows on average by 25% and promoted by authorities at both energy consumption from renewab- annually. national and municipal levels by sources up to 23% of the country’s the introduction of Fintech-friendly total energy balance by 2020.
Local engineering industry works for NASA, Boeing, U.S. Army, BMW, Volkswagen, Hitachi, Siemens, Mitsubishi. Local biotechnology sector is among the mostly developed across the CEE region. Investments expanded in 2016 Local laser producers have NATO and Kinze Pentagon as their clients. Telia Cognizant Yazaki Newcomers in 2017 Lithuania has the fastest Continental public Wi-Fi in Europe and Schüco the greatest fiber-optic (FFTH) Hollister Internet network penetration AL-KO Vehicle in Europe. Technology Hella TGW Logistics Group
Business Guide Lithuania 2018 9 Latvia Vilnius Vilnius is the capital and the larg- est city in Lithuania and it has been recognised as the economic, financial and commercial centre of Lithuania. Šiauliai Klaipėda According to Statistics Lithuania, Baltic Sea Panevėžys Vilnius County accounted for about 41.6% of Lithuania’s GDP in 2016. Tauragė The GDP per capita in Vilnius County was calculated at EUR 20 thousand Kaunas in 2016. Vilnius is ranked first in Lithuania in Marijampolė Vilnius Russia terms of foreign direct investment. Alytus Overall 71% of foreign investment in Poland Druskininkai Lithuania was concentrated in Vilnius Belarus County at the end of 2016. Vilnius offers business-friendly en- vironment, highly qualified human resources, perfect infrastructure and a convenient geographical location Regional and as it stands in the centre of Europe. Most of shared service centres urban economic established in Lithuania are operat- overview and ing in Vilnius. For the third year in a row, in 2017, the city was awarded trends as the Most Dynamically Develop- ing City among CEE countries at the Lithuania is currently undergoing a EU funds for brown-field 5th annual CEE Shared Services and regional policy reform, which is ex- investment (i.e. an investment Outsourcing Awards. pected to have a significant positive strategy when an entity purchases Vilnius has recently initiated many effect on the conditions for potential an existing facility to begin new investment projects focusing on investors. Some of the major devel- production). Each of the 60 improvement of road and bicycle opments include: Lithuanian municipalities can apply infrastructure, development of mul- to the Ministry of the Interior for the tifunctional centre and new congress Economic specialisation of the facility to fast-track EU funding in hall, etc. regions. For example, as of 2018, order to prepare the infrastructure The business development agency the Klaipėda region is positioning needed for potential investors. GO Vilnius aims to strengthen the itself as a blue growth region (i.e. the international appeal of Vilnius to region will be focusing on the long Faster rent of land. As of 2018, businesses and investors, and to sup- term strategy to support sustainable the municipalities will be able to port foreign investors, entrepreneurs, growth in the marine and maritime have the fields ready for potential and companies that decide to make sectors), the Marijampolė region investors in just 6 weeks. their move to Vilnius. is ready to work with investors in wood, food and metal industries, and Panevėžys aims at becoming the hub of robotics, etc. Professional education, R&D and other measures will all focus on the chosen regional specialisation.
Western Union, Barclays, Swedbank, NASDAQ, SEB, Danske Bank, CITCO, Outokumpu, Paroc, Fitek, Cognizant, Computer Science Corporation (CSC) have established their shared service centres in Vilnius.
10 Business Guide Lithuania 2018 Kaunas in general. There are two integrated A favourable geographical location, science, study and business centres convenient road, rail, water and air (valleys) in Kaunas – Santaka and infrastructure, highly skilled labour Nemunas. Santaka – the first medi- force, flourishing knowledge-based cal and pharmaceutical valley in the businesses and modern industry make Baltic States – has been established Kaunas region one of the most attrac- for public and private research to set tive places for investment in the Baltic up knowledge-intensive businesses States as a whole. A number of public and provide value-added, knowledge- and private universities and colleges intensive services, while Nemunas pro- are established in Kaunas, includ- motes the development of Lithuanian ing Kaunas University of Technology, agriculture, forestry and food sectors. which is the largest provider of engi- The city’s development agency Kaunas neering specialists in Lithuania. Close IN has been established to promote partnership with businesses builds a business, tourism and international pool of highly qualified multilingual marketing development of Kaunas at specialists in IT, human resources and the international level, and to support finance. foreign investors that decide to set up Kaunas County generates 20% of total their businesses in Kaunas. GDP in Lithuania with about EUR 13.5 thousand nominal GDP per capita. Kaunas is mainly focussing on the development of technologies and in- novation. Science and technology park Technopolis provides infrastructure Kaunas has become an increasingly popular and innovation support services for investment destination for the foreign small and medium enterprises. investors: Hollister, Hella, Continental and It also helps to attract the talented scientists to the business organisations AL-KO have chosen Kaunas for their business in Kaunas and foster entrepreneurship expansion.
Klaipeda attractive for foreign investors. The Airport is located only 35 km from The port of Klaipėda is the northern- dominant sectors in Klaipėda are Klaipėda, it offers connecting flights most ice-free port on the east coast of shipbuilding and ship repairs as well to a variety of European cities. the Baltic Sea. In 2013, the dredging as transportation and logistics. Klaipėda County itself accounted for works were finished, which improved Klaipėda offers cargo delivery possi- around 11.1% of Lithuania’s total the safety of large ships in the port. bilities for business in a much shorter GDP in 2016. In 2016, the GDP per The reconstruction also improved time and at a lower tariff by contain- capita in the County was calculated its competitiveness and increased its er trains compared to other means at EUR 13.3 thousand. capacity compared to the neighbour- of transport. Palanga International ing ports. A convenient geographical location, sustainable economic growth, excel- lent infrastructure, highly skilled hu- man resources, competitive business development costs and incentives for investors make Klaipėda especially
Business Guide Lithuania 2018 11 Setting th up a business Lithuania ranks 16 in the world for ease of doing businesss.
Ease of doing business
A business can be set up electronical- business environment – and now sits made positive reforms in four key ar- ly in just a few days if the entity’s es- ahead of the likes of Ireland (ranked eas: obtaining construction permits, tablishment documents comply with 17th) and Germany (ranked 20th). connecting to electricity networks, the standard forms of documents. Furthermore, Lithuania is the only protecting minority investors, and According to the World Bank’s Do- country in the Central and Eastern paying taxes. Lithuania was 2nd in ing Business 2017 report, Lithuania European region to have improved the whole of Europe and Central Asia ranks 16th in the world for ease of its position in the Doing Business for the number of reforms leading to doing a business. Lithuania has risen index this year. an improvement in the conditions for 5 positions in the annual ranking – It recognized that since the last Do- business. which rates 190 countries on their ing Business report, Lithuania has
Types Private limited liability company (UAB) Public limited liability company (AB)
of - Separate legal entity (legal entity with limited liability) - Separate legal entity (legal entity with limited liability) - A shareholder may be held liable for the obligations - A shareholder may be held liable for the obligations entities of a company only in the event of failure to fulfil the of a company only in the event of failure to fulfil the obligations due to unfair actions of the shareholder obligations due to unfair actions of the shareholder - May engage in any legitimate activities - May engage in any legitimate activities - May engage in licensed activities upon obtaining the - May engage in licensed activities upon obtaining the respective license respective license Minimum amount of share capital is Minimum amount of share capital is EUR 2,500 EUR 25,000 Registration in 1–2 weeks Registration in 1–2 weeks General meeting of shareholders (sole shareholder) and General meeting of shareholders (sole shareholder) and general manager (single-member management body) general manager (single-member management body) are mandatory bodies are mandatory bodies - Management board (min. 3 members) and (or) super- - Management board (min. 3 members) and (or) super- visory council (3–15 members) are optional bodies. visory council (3–15 members) are optional bodies. - In a public limited liability company (AB) management - In a public limited liability company (AB) management board or supervisory council is a mandatory body. board or supervisory council is a mandatory body. - The functions assigned to the competence of the - The functions assigned to the competence of the supervisory council might be fulfilled by the man- supervisory council might be fulfilled by the man- agement board if half of the members are not in the agement board if half of the members are not in the employment relations with the company employment relations with the company No residence requirements to the general manager, No residence requirements to the general manager, other members of other bodies other members of other bodies Audit* required, if at least two of the following criteria Employment contract must be concluded between the Employment contract must be concluded between the are met: - net revenue from sales general manager and the company general manager and the company exceed EUR 3.5 million for the financial year; Audit required, if the certain criteria are met* Audit required - value of assets in the balance sheet exceeds EUR 1.8 million; Comprehensive tax regulation Comprehensive tax regulation - average number of employees exceeds 50 for - Transfer pricing regulation is applicable - Transfer pricing regulation is applicable the financial year. - Transfer pricing documentation is mandatory when - Transfer pricing documentation is mandatory when turnover is over EUR 2.9 million turnover is over EUR 2.9 million Thin capitalisation rules apply (4:1) Thin capitalisation rules apply (4:1)
12 Business Guide Lithuania 2018 Accounting prepare their financial statements in Share option plans accordance with IFRS. and audit If the financial year of a company requirements coincides with a calendar year, Guidelines for introducing share the financial statements must be option plans in limited liability approved by the general meeting companies took effect on 1 January Limited liability companies may of shareholders by 30 April of the 2018. Share option plans will choose at their own discretion following calendar year. be allowed for employees of the to follow either the Lithuanian The financial statements together group companies and members Business Accounting Standards or with an independent auditor’s report of management and supervisory International Financial Reporting (in case of statutory audit) must be bodies (individuals). Shares can Standards (IFRS). submitted to the Register of Legal be granted fully or partly free of The companies whose securities are Entities, and they must be made charge. New regulation will also traded in the regulated markets must publicly available in accordance with ensure legitimacy and enforceability keep their accounting records and the legal acts. of share option plans. Subject to certain requirements, tax incentives will apply to benefits received by Setting up a business is quick and easy employees from share option plans.
Open an accumulative Submit establish- Register a company Open a settlement bank account with ment documents with the Register bank account for minimum capital to a notary of Legal Entities ordinary transactions 2 days 1 day 3 days 1 day
Branch office Representative office Operating as a foreign company
- Structural unit of a foreign company (not - Structural unit of a foreign company (not No registered presence (operations through a separate legal entity) a separate legal entity) a foreign company, without any corporate - A founder is liable for the obligations of a - A founder is liable for the obligations of a registrations in Lithuania) branch representative office - May engage in all or any part of the busi- May engage in limited-scope operations: - May engage in any legitimate activities ness activities of a founder act on behalf of the founder, etc. - For licensed activities, registration of a - May engage in licensed activities with company or a branch may be necessary certain restrictions No share capital requirements No share capital requirements No share capital requirements Registration in 1–2 weeks Registration in 1–2 weeks No corporate registration required, how- ever, registration for tax purposes may be necessary General manager is a mandatory manage- General manager is a mandatory manage- Bodies and their composition are regulated ment body ment body by the country of incorporation No additional corporate body may be No additional corporate body may be No residence requirement apply formed formed If the founder of a branch is a non-EEA If the founder of a representative office is No residence requirement apply company, at least one person acting on be- a non-EEA company, at least one person half of the branch should reside in Lithuania acting on behalf of the representative office should reside in Lithuania Employment contract must be concluded Employment contract must be concluded No employment contracts are required between the general manager and the between the general manager and the branch representative office Audit may be performed as a part of the Audit may be performed as a part of the Audit is required by the country of incor- founder’s audit founder’s audit poration Less comprehensive tax regulation Less comprehensive tax regulation Less comprehensive tax regulation - Transfer pricing regulation is applicable - Transfer pricing regulation is applicable - Transfer pricing regulation is applicable - Transfer pricing documentation is manda- - Transfer pricing documentation is manda- - Transfer pricing documentation is manda- tory when turnover is over EUR 2.9 million tory when turnover is over EUR 2.9 million tory when turnover is over EUR 2.9 million No thin capitalization rules apply No thin capitalization rules apply No thin capitalization rules apply
Business Guide Lithuania 2018 13 Investment incentivestment inancing
Investment Legal framework financing The legal system of Lithuania recognises the generally accepted Lithuania enjoys the benefits of being principles of the legal regulation of a member of the European Union. investments. The principle of equal Both local and foreign businesses, treatment means that both Lithu- having decided to expand their activ- anian and foreign investors have ity into the Lithuanian market, can equal business conditions defined in apply for the support from the EU the Lithuanian Law on Investment Double tax treaties Structural Funds. During the period and other relevant legislation. The As at 1 January 2018, Lithuania had between 2014 and 2020, Lithuania is principle of equal protection means 53 double tax treaties providing expected to receive EUR 6.84 billion that the laws of Lithuania protect the for certain tax benefits for foreign in structural assistance assigned to rights and lawful interests of both investment in Lithuania. Moreover, a the EU Cohesion policy, which in- local and foreign investors. double tax treaty with Japan is pending cludes investment in human capital, ratification. infrastructure and public adminis- tration. The EU funds are used to upgrade companies and the manu- Lithuania has double tax treaties with facturing sector, promote exports, the following countries: create industrial parks, establish new product development and testing Armenia France Luxembourg Slovenia laboratories, renovate kindergartens Austria Georgia Macedonia Spain and schools, reconstruct churches Azerbaijan Germany Malta Sweden Belarus Greece Mexico Switzerland and manors, and build hotels, bicycle Belgium Hungary Moldova Turkey paths and ski runs. Bulgaria Iceland Netherlands Turkmenistan Both local and foreign micro, small Canada India Norway UAE and medium enterprises as well China Ireland Poland Ukraine Croatia Israel Portugal United Kingdom as larger companies established in Cyprus Italy Romania USA Lithuania may apply for the non- Czech Republic Kazakhstan Russia Uzbekistan refundable EU support. Denmark Kyrgyzstan Serbia Estonia Korea Singapore Finland Latvia Slovakia
During 2014–2020, the level of funding obtained by Lithuania from the EU Structural Funds will exceed that of the other Baltic States.
14 Business Guide Lithuania 2018 Possible ways of investing in Lithuania:
- Establishing a company, acquiring shares/stake in the company - Acquiring property in Lithuania - Acquiring control over the company by granting the loan, etc. - Concluding contracts of concession, leasing and partnership with public/private companies.
Free economic foreign investment in Lithuania. There are schools in Panevėžys pre- According to the amount of foreign paring qualified workers in the areas zones direct investment per capita in 2016, of electronics, mechatronics, electri- Kėdainiai district had the highest rate cal and other kinds of engineering. A free economic zone (FEZ) is a ter- among other districts within Kaunas Šiauliai region has well-established ritory designated for the purpose of County (2,879 EUR/capita). Major competencies in leather and textile economic-commercial and financial investors in economic activities of production, which have enabled it to activities where companies enjoy Kėdainiai district are from Russia, form a cluster now serving the world preferential economic and legal con- Denmark and Finland. renowned brand, IKEA. Addition- ditions for their operation. Each FEZ Baltic FEZ in Marijampolė is located ally, Šiauliai FEZ is specializing in is established by a separate law. at a crossroad of wide (Russian mechanical engineering, production Currently there are six FEZs operat- standard gauge) and narrow railway of electrical equipment and home ap- ing in the following cities of Lith- tracks conveniently accessible by pliances, and construction materials. uania: Kaunas, Klaipėda, Kėdainiai, road. It, therefore, provides seam- The regulation of the activities for Marijampolė, Panevėžys and Šiauliai. less logistic opportunities of railway which the FEZ tax exemption is ap- They host about 60 investors, includ- and motor transport across the Baltic plicable has been recently changed. ing production, logistics, electronics, Sea Region, Europe and Asia. Baltic As from 1 January 2018, tax exemp- pharmacy and energy companies. FEZ has been established by a team tion applicable for FEZ companies An association uniting the six FEZs of professionals who are willing to will apply to the extent that it is not operating in Lithuania has a goal to responsibly assist investors in the considered as state aid and is com- create 2,000 new jobs and attract process of setting up and developing patible with EU regulations. There investments of more than EUR 400 a successful business. are certain restrictions to trading million by the end of 2018. Panevėžys FEZ offers access to a wide companies as well. With a superb road, rail and sea pool of employees from a city where access, Klaipėda FEZ forms part of the industries of metalwork, elec- the hub of a multi-modal transport tronics, textile, food and beverages network. It was identified in the have been developed for a long time. European Union Transport Infra- structure Needs Assessment (TINA) Free economic No tax programme as a site for the establish- zones on dividends for foreign ment of a logistics centre, forming a investors part of the European-wide network of these centres. Kaunas FEZ offers both a strategic geographic location and excellent No tax on real estate development conditions. Situated No corporate next to Kaunas International Airport income tax and in the proximity of the ice-free during the first 10 years Klaipėda Seaport, Kaunas FEZ is and 50% lower corporate income tax rate (i.e. 7.5%) conveniently accessible via road and over the next 6 years railway systems. Kėdainiai FEZ also plays an impor- tant and strong role in attracting
Business Guide Lithuania 2018 15 Latvia
Šiauliai
Klaipėda Radviliškis Baltic Sea Panevėžys Ramygala
Kėdainiai Pagėgiai Kaunas
Marijampolė Vilnius Russia Alytus well-qualified and highly motivated Belarus labour force in addition to favourable 5 integrated R&D and business centres real estate rent prices. 6 free economic zones (active) 5 state-owned industrial parks 1 technology hub Investment in real estate and land Science and business valleys under much more favourable condi- Overall five integrated science, re- tions that are applicable to the park Land (except for agricultural and search and business valleys are being members only. As a result, UK advi- forestry) may be acquired only by developed in the territories of Vil- sory Alien Technology Transfer has companies or individuals who are nius, Kaunas and Klaipėda. Each of chosen Vilnius Tech Park for its first established or residing in the EU or these valleys specializes in a different office in CEE region. Annually, the in countries that are the members of area of scientific research: laser and company helps its clients to attract OECD, NATO or EEA. Such individu- light technologies, civil engineering, on average EUR 40 million of invest- als and companies are allowed to buy biotechnology, molecular medicine, ments. In Lithuania, it seeks to bring up to 500 hectares of farmland (or nanotechnologies, sustainable chem- 40 to 50 innovative start-ups per year more if the buyer is a stockbreeder), istry and biopharmacy, information between 2016 and 2020. provided that the buyer has at least and communication technologies, 3 years of farming experience or has Industrial parks electronics and organic electronics, completed studies leading to agricul- and others. Lithuania attracts investors not ture-related profession. Vilnius University National Scholarly only to its FEZs but to its industrial Registration of property in Lithuania Communication and Information parks (IPs), as well. Industrial sites is smooth and simple. Generally, no Centre is operating at the Sunrise in Lithuania have already been fully stamp duties are charged on sale/ Valley. It is a part of a Sunrise Valley prepared for business use and they purchase transactions. Real estate- project which attempts to promote have the entire necessary physical in- related transactions, however, growth of knowledge-intensive eco- frastructure which has been brought require notary’s approval. A notary nomic activities in Vilnius. Further- to the investor’s land plot free of fee payable by a legal entity on sale/ more, a joint health science centre charge. Currently, there are several purchase of real estate amounts to accommodating internationally state-owned IPs (in Alytus, Pagėgiai, 0.45% of the real estate price, but it acknowledged biotechnology scien- Radviliškis, Ramygala and Šiauliai) may not be more than EUR 5,800. tists and students was opened at the and several private IPs developed in Besides, changes in real estate own- Sunrise Valley in 2015. The National Lithuania. ership rights must be registered with Centre of Physical and Technological The needs of investors are of primary the Real Estate Register. The amount Sciences and the Faculty of Chem- importance, so land in these indus- of the fee charged for the registra- istry of Vilnius University are being trial parks may be subdivided into tion of a title to immovable property developed at the Sunrise Valley. smaller parts and further leased at depends on the type and value of In November 2016 a new technology favourable prices for long-term pe- that property. hub Vilnius Tech Park was opened riods. The IPs established in smaller in Lithuania. It is by far the biggest towns are rapidly developing, as technology park in the Baltics and they can offer cheaper but effective, Nordics. It offers offices for start-ups and other businesses within the ICT sector. The businesses established in the park will be able to benefit from In industrial parks, legal and business consultations, infrastructure is brought to the from marketing and other services investor’s land free of charge.
16 Business Guide Lithuania 2018 rd Lithuania ranks 3 in the world for ease of property registration
Lithuanian laws are fully EU compliant providing safe and transparent Investment legal framework protection and guarantees
Lithuanian legislation protects inves- Investment in a Lithuanian Business tors’ rights and lawful interests. The company reorganisation laws provide for the rights of an The following exemptions from taxes Companies in Lithuania may be investor to manage, use and dispose are available when investing in a merged and divided by means of of the investment. Lithuanian company: reorganisation in line with certain Foreign investors have the right • there is no capital (stamp) duty on conditions set forth in the Lithuanian to legal assistance in the event of acquisition of shares; Civil Code, Law on Companies, Law violation of their rights and lawful in- • there is no capital (stamp) duty on on Corporate Income Tax and other terests. Investment disputes between increase in the share capital; legislation. Only the legal entities of foreign investors and Lithuania are • reduction of share capital that was the same legal form may be involved resolved by way of mutual agree- formed from reserves and retained in reorganisation (with some excep- ment of the parties, by the courts of earnings and paid to corporate tions indicated in special laws). Lithuania, international arbitration residents is not subject to tax as The cross-border mergers can be per- institutions or other institutions. long as the conditions for the formed according to the Lithuanian In the event of investment disputes, participation exemption applied to Law on Cross-border Mergers of Lim- foreign investors have the right to dividends are met; ited Liability Companies implement- refer directly to the International • reduction of share capital that was ing Directive 2005/56/EC. Centre for Settlement of Investment formed from shareholders’ contri- If properly structured, reorganisa- Disputes. butions is not subject to tax. tions are tax neutral.
Both foreign and local investors have equal rights in terms of protection of their investments
There is a number of large real estate Modern and affordable office space development projects, therefore, the total modern office space is constantly Location Total vacant area Average price EUR/m²/month increasing in Vilnius. In 2017, new of office space, m² projects, including Santariškės Medical Class A Class B Business Centre, Green Hall 2, Penta- gon and other were completed bringing Vilnius 35,330 13.5 – 16.5 8.0 – 13.0 more than 50,000 m² of office space to Kaunas 8,670 11.0 – 14.0 6.0 – 10.5 the market. A significant amount of new Klaipėda 12,029 9.0 – 12.5 6.0 – 9.0 office projects is expected to be com- pleted in 2018. More than ten projects Source: www.ober-haus.lt of different scale are planned for the near future, as a result of which almost 100,000 m² of new office space will be provided. Business Guide Lithuania 2018 17 Labour
On 1 July 2017, a new version of the the employment relations have a the maximum working time per Lithuanian Labour Code came into cross-border element. Despite such employee; force. It focuses on liberalization agreement, however, the Lithuanian • employment agreement for work of employment relations, by mak- mandatory rules would prevail if the for several employers is concluded ing them more flexible, reducing an actual place of work of the employee by two or more employers and administrative burden for employers, under the employment agreement is an employee employed to per- and encouraging foreign investments in Lithuania. form the same functions (e.g. in Lithuania. The Labour Code codi- one lawyer or accountant may be fied existing case-law and removed Types of employment employed in all Lithuanian group most of the legal uncertainties sur- agreements companies). It is, however, impor- rounding employment relationships An employment agreement in tant to indicate the main employer (for example, overtime rates of man- Lithuania is usually concluded for responsible for work scheduling, agement staff, capped liability of the an indefinite period. However, payment of social security contri- employer in case of delayed settle- very different types of employment butions, etc.; ment of accounts with a dismissed agreements may be chosen as more • seasonal agreement (for up to 8 employee, etc.). The Labour Code acceptable, depending on the needs months during a year) is con- has also opened the following new of businesses: cluded if the work is seasonal in possibilities to the employers: • fixed-term agreement is concluded nature. • new types of employment agree- up to 2 years in case of assigning A probationary period may be estab- ments have been introduced to the same functions; several succes- lished in employment agreements. meet the needs of businesses; sive fixed-term agreements can be The maximum probationary period is • working time can be extended concluded up to 5 years in total in three months. easier than it used to be before, case of assigning different func- and there are more possibilities to tions; Working choose between the most accept- • temporary agreement (for a able working time regime (flexible fixed period up to 3 years or for conditions working hours, individual working indefinite period) is concluded hours, split working hours); with a temporary employee who is Working time • employment agreements can be employed by a temporary em- An average working time for an em- terminated easier and at a lower ployment agency (the employer), ployee should not exceed 48 hours cost. although the duties under the per week (which may be extended up employment agreement are per- to 60 hours per week for employees Conclusion of formed for the benefit of the user working in several positions), and of temporary work; 12 working hours per day. A five-day an employment • project-based agreement is a fixed- working week is standard, but it may agreement period agreement (up to 2 years be extended to a six-day working or up to 5 years, if any type of week. Overtime must not exceed 8 agreement with a current employ- Structure of an employment (or 12, upon written consent of an ee is changed into a project-based agreement employee) hours in seven consecu- agreement) concluded for the tive days and 180 hours per year, An employment agreement must purpose of achieving the specific unless a collective employment contain the main employment provi- work results; agreement provides for more than sions: the employee’s workplace, job • employment agreement for shar- 180 hours per year. functions and remuneration. Depend- ing a workplace is a contract ing on the needs of the employer, based on which 2 employees share a confidentiality undertaking or a one workplace, but do not exceed non-competition agreement (provid- ing for an adequate compensation) may be additionally concluded with an employee. The Lithuanian version of the employment agreement may EUR 400 be accompanied by an equivalent version in any foreign language. minimum wage per month (gross) Foreign law may be applied to an employment agreement, provided EUR 2.45 per hour (gross)
18 Business Guide Lithuania 2018 Holidays working year, the unused days are paternity, child care, unemployment, The minimum annual paid holiday transferred to the next year. accidents at work and occupational entitlement is 2o working days or When employment agreement is diseases. There is no statutory re- 24 working days (if a working week terminated, the unused annual leave quirement for the employers to pro- consists of 6 days). days are subject to compensation only vide additional individual insurance Additional annual holiday benefits are for the last three years of employ- to their employees. possible for certain groups of employ- ment. However, additional insurance might ees (e.g. disabled persons, employees be required for the company in con- under 18 years of age, employees nection to its business activities in working in abnormal/harmful condi- State social Lithuania (e.g. insurance of profes- tions). sional/commercial liability). Annual paid holiday leave must be security issues granted in the same working year. The Lithuanian state social insurance If an employee is not able to use the scheme includes insurance for pen- holiday leave in full during the same sions, health, illness and maternity/
Termination of employment agreement
Cases of employment Grounds for termination Notice period* Severance payment termination
Expiry of an employment Expiry of the term provided for - 5 working days if employment 1 average monthly salary is paid agreement in the fixed-period employment relations last for more than a if employment relations last agreement year more than 2 years - 10 working days if employment relations last for more than 3 years Expiry of the term provided for 5 working days. The notice pe- N/A in the temporary employment riod, indicated in the collective agreement agreement (if it is concluded), shall not exceed 14 calendar days Mutual consent between the Written agreement on the Offer to terminate an employ- N/A parties termination of the employment ment agreement must be ac- agreement cepted within 5 working days. If the offer is not accepted, employment relations are not terminated Notice of an employee without Serving to the employer a prior 20 calendar days N/A important reasons written notice Notice of an employee in case of Serving to the employer a prior 5 working days - 2 average monthly salaries important reasons written notice - 1 average monthly salary, if employment relations lasts less than a year Without the fault of an employee Reasons related to economic - 1 month 0.5 – 2 average monthly salaries and technological aspects, - 2 weeks for employees, work- restructuring of the company’s ing less than a year activities, results of an employ- - A longer notice period (double ee, etc. or triple) for certain categories of employees, (e.g., for em- ployees raising children under 14 years of age or persons of pre-retirement age) Fault of an employee - Gross breach of employment N/A N/A duties, such as unreasonable absence from work for a whole day, etc. - Repeated breach of employ- ment duties within the last 12 months On the initiative of the employer Without important reasons with 3 working days 6 average monthly salaries all employees, except for a preg- nant employee and an employee on parental leave Without the will of the parties Upon an effective court deci- N/A In some cases 0.5 – 1 average sion, when an employee is monthly salary is paid unable to perform employment duties or work according to a medical conclusion etc.
* The termination of the employment agreement during the probationary period is permissible with a 3 days’ notice either on the initiative of the employee or the employer. Business Guide Lithuania 2018 19 Immigration No work permits are & permits required for EU citizens.
If a non-EU citizen intends to work in Lithuania, a work permit is required.
EU citizens a visa), must submit the application to the Migration Department in the EU citizens and their family members municipality of Lithuania in which are free to stay and work in Lithua- he/ she intends to reside. Such lodg- nia. Even if the family members of ing of application, however, does not EU citizens are non-EU citizens, they entitle a non-EU citizen to stay in are issued a residence certificate of a Lithuania before the application has Lithuania is a Member State of the family member of an EU citizen. been examined and a decision on the European Union (EU) and a member issue of a residence permit has been of the Schengen Area, therefore, the Non-EU citizens adopted. Lithuanian immigration laws were set Residence permit should be issued A non-EU citizen needs a visa to in accordance with the EU regula- within 4 months (general procedure) enter Lithuania, unless a visa-free tions. or within 2 months (accelerated pro- regime is applied. Thus, any EU citizen is free to stay cedure) from the lodging of the ap- Diplomatic missions or consular posts in Lithuania nearly without any legal plication (the processing time might of Lithuania in foreign countries obligations. Non-EU citizens (foreign be shorter depending on the ground issue visas to non-EU citizens who nationals) might be subject to ad- on which the residence permit should intend to travel to Lithuania. The ditional requirements. be obtained). procedure and necessary documenta- tion depend on the requirements of a Work permit particular diplomatic mission or con- If a non-EU citizen intends to work in sular post of Lithuania. If a non-EU Lithuania, a work permit is required. citizen stays in Lithuania for a period The requirement to have a work longer than 3 months, a temporary or permit applies to both, short and permanent residence certificate or, in long-term stay cases. certain cases, a national visa should The main exemptions from the be obtained. requirement to obtain a work permit A non-EU citizen must submit an are as follows: application for a residence permit • when a non-EU citizen stays in and other documents to a diplomatic Lithuania for up to 3 months: to mission or a consular post of Lithua- negotiate a contract or the terms nia abroad. A non-EU citizen who is of its implementation; to train lawfully staying in Lithuania (holding personnel; or to install equipment; • when a Lithuanian and a non- EU/EEA member state company, active for more than 6 months, conclude a service agreement and No actions Temporary Permanent are required residence residence the non-EU citizen permanently upon entry certificate is certificate is employed by the latter company required required and working there for no less than 3 months is posted to Lithuania for up to 1 year, provided that the non-EU citizen keeps social security in his/her home country < 3 months > 3 months > 5 years for the whole period of posting to Lithuania;
20 Business Guide Lithuania 2018 • when a non-EU citizen holds a profession which is listed among the professions requiring higher professional qualification and The EU Blue Card allows working which are lacking in Lithuania. and living in Lithuania In order to employ a non-EU citizen, Lithuanian employers are required: • to apply to the Lithuanian Labour Exchange Office and register a Intra group secondments often fall under vacancy; the exemption from the requirement to • to obtain the work permit from obtain a work permit the Lithuanian Labour Exchange Office before a foreign national arrives to Lithuania. It is important to note that in some cases the Labour Exchange Office has • when the salary proposed to a holding an ICT permit issued by an- to be informed about the intention highly skilled employee is greater other EU country will be able to work to register a vacancy three months than 3 national average gross in Lithuania for up to 90 days within before submitting the application for monthly wages (approx. EUR a period of 180 days. If an employee registering the vacancy, and that the 2,490 in total), or holds an ICT residence permit in vacancy has to be registered 1 month • when the salary proposed to an another EU country that is not part before submitting the application for employee holding a profession of the Schengen area (e.g. UK, Ire- the work permit. listed among the professions re- land), the host entity in Lithuania is Work permit is issued within 2 quiring higher professional quali- required to submit a specific notifica- months from the date of the applica- fication and lacking in the Lithu- tion to the Migration Department. tion to the State Labour Exchange. anian labour market is at least 1.5 Seconded/posted employees may times of the national average gross work as managers, specialists or The EU Blue Card – monthly wage (approx. EUR 1,245 trainees, yet restrictions apply as employment of highly skilled in total), or described below: non-EU citizens • when the EU Blue Card is renewed The Blue Card is a 2-in-1 (work and after two years of non-EU citizen’s Manager residence) permit allowing highly employment in Lithuania. skilled non-EU citizens to work and The EU Blue Card is issued within Runs the host company live in Lithuania. Highly skilled one month and is valid for up to Has the necessary skills and employees are not only employees three years. Foreigners who stay in qualifications to run the host company holding higher education diplomas, Lithuania to work for the group com- Has worked for the home company for at but also employees who have no less pany and their salary is greater than least 6 months than five years of professional experi- two national gross monthly average ence in a specific field acknowledged wages (approx. EUR 1,660), are able Specialist as tertiary education by the Lithu- to apply for the residence permits for anian authorities. their family members as well. Has the necessary specific skills and qualifications to work for the host When a Lithuanian employer wants If employee intends to change the company to obtain the EU Blue Card for an employer during the first two years, employee, it is required: the permission of the Migration De- Has worked for the home company for at least 6 months • to apply to the Lithuanian Labour partment is required. Exchange Office and register a If employee intends to change the vacancy, and employer during the first two years, Trainee • to obtain the decision from the the permission of the Migration De- Has a traineeship agreement Lithuanian Labour Exchange partment is required. Office that the employment of a Has a university degree highly skilled foreigner meets the Intra-corporate transferees to Receives salary requirements of the Lithuanian enjoy more mobility and fewer Has worked for the home company for at labour market, and requirements least 3 months • to pay an employee a salary of As of 1 September 2017, Lithuania at least 1.5 times of the national implemented Directive 2014/66/ Managers and specialists may spend average gross monthly wage (ap- EU (the ICT Directive) on the issue up to 3 years in total in Lithuania prox. EUR 1,245 in total). of temporary residence permits for and the EU, whereas trainees may There is no requirement to obtain the intra-corporate transferees who are stay up to 1 year. An application for above-mentioned decision from the non-EU citizens. The ones who ob- the renewal of the ICT permit can Lithuanian Labour Exchange Office tained their ICT residence permit in be submitted after at least 3 months’ and to search for employees in the Lithuania or another EU country can break abroad. Lithuanian and EU labour markets in work in Lithuania without the work the following cases: permit. However, a non-EU citizen
Business Guide Lithuania 2018 21 The tax system
The Lithuanian tax system is admin- Lithuania has jumped up nine positions in istered by the following official insti- “Paying Taxes 2018” report due to more tutions: the Lithuanian Tax Authority, the Customs Authority, the Social efficient tax compliance. Insurance Authority and institutions authorised by the Lithuanian Minis- try of Environment. The system of taxes and duties in Lithuania consists of direct and indi- rect taxes, the major of which are: • corporate income tax, • VAT, • personal income tax, Modern tax administration • social security contributions, Tax Authority, Customs, or other • property taxes, The Lithuanian tax administration sys- public authority upon request. • excise duties, tem is progressive and convenient for Depending on the turnover of the • customs duties. the taxpayers. All tax returns are filed company, the obligation to submit electronically, paper tax returns are SAF-T data could arise later (2018– Appeal procedures submitted only in exceptional cases. 2020). Any person who disagrees with the If taxpayers have any questions about New data reporting requirements decision of the Tax Authorities has the submission of tax returns or should contribute to a more effec- the right to lodge an appeal. The taxation matters, they can call the Tax tive and modern tax administration decisions taken by the Tax Authori- Information Centre and get advice in Lithuania which aims at decreas- ties may be appealed against within directly from the specialists of the Tax ing the scale of shadow economy 20 or 30 days. Authority acting as a single point of and tax gaps. If taxpayers are dissatisfied with the contact. Information exchange result of the first-stage appeal, they i.MAS – intelligent tax may appeal to the courts or to a Information disclosure requirements administration in Lithuania non-obligatory pre-trial tax litiga- related to international transparency tion institution (the Commission on The Lithuanian Tax Authority has movements (such as FATCA (For- Tax Disputes under the Lithuanian introduced an IT-based tax adminis- eign Account Tax Compliance Act) Government) hearing tax disputes tration system (“i.MAS”). and Common Reporting Standard between a taxpayer and the Tax Companies are required to submit of OECD) were transferred into the Authority. The absolute majority of shipment document data in XML Lithuanian national law. Financial all tax disputes go through the Com- format to i.VAZ system on local market participants as well as legal mission on Tax Disputes due to its transport of goods before each ship- entities are obliged to provide the competence in taxes. ment. Also, all persons registered Tax Authority with certain informa- for VAT in Lithuania are required to tion about their clients’ financial submit invoice data in XML format accounts and services acquired from to i.SAF system on a monthly basis. foreign entities. With effect from 2017, companies are required to prepare a SAF-T (Standard Audit File for Tax) in XML format and provide it to the
22 Business Guide Lithuania 2018
Corporate 15% income tax (CIT) The standard CIT rate is Tax residence CIT 15%, which is one of the lowest in the EU. A company is treated as a Lithuanian tax resident for CIT purposes if it is incorporated in Lithuania. No other tax residence rules apply. 5% The reduced CIT rate of 5% Tax base applies to: 0% For local Lithuanian companies • small companies which meet certain conditions; The reduced CIT rate of 0% the tax base comprises all income • companies involved in applies to: sourced inside and outside Lithuania. agricultural activities • small companies which meet Exemption is applied to income and which meet certain certain conditions (for the earned through permanent establish- conditions. first year of operations); • companies that are ments in European Economic Area established in a FEZ (for the (EEA) countries or countries which first 10 years). have a Double Taxation Treaty (DTT) with Lithuania. For foreign companies the tax base comprises income generated from business activities carried out Anti-avoidance rules Incentives to holding through permanent establishments in Lithuania has a general anti-avoid- companies Lithuania and other specific income ance rule. Based on this rule, the Capital gains on transfer of shares sourced in Lithuania, such as: Tax Authorities have a right to tax are exempt from CIT if a Lithuanian • interest, a transaction based on its substance company: • dividends, rather than its formal documentation • transfers the shares of the com- • royalties, when the aim of the transaction is to pany which is registered in EEA • proceeds from rent/sale of immov- get a tax benefit. country or in another country with able property, etc. Lithuania also has specific anti-avoid- which Lithuania has a DTT; and ance rules, including: • has held over 10% of shares of the Computation of taxable profit • thin capitalisation rule; aforementioned company for not A Lithuanian company/foreign • rules on taxation of controlled less than 2 years (not less than 3 company’s permanent establishment foreign corporations; years in the event of reorganisa- adjusts its profit before taxes taken • transfer pricing rules; tion). from its financial statements pre- • rules on taxation of dividends re- pared under the Lithuanian Business ceivable/payable from/to foreign Tax losses carried forward Accounting Standards or Interna- companies; Operating tax losses can be carried tional Financial Reporting Standards • some other specific rules. forward for an indefinite period. by the amounts of non-deductible ex- Losses incurred from disposal of penses (penalties, expenses related to securities can be carried forward for non-taxable income, etc.) and non- a period of five years and can only taxable income (dividends, insurance be offset against income of the same payments, penalties received, etc.). nature. Only up to 70% of current year’s tax- able profits can be offset against tax losses carried forward.
Intra-group transfer of tax Operating tax losses can be carried losses forward for indefinite period. Transfer Tax losses can be transferred from one company to another within the of tax losses between Lithuanian group same group of Lithuanian companies companies is allowed. and within the same tax period if certain conditions are met.
Transfer pricing rules All transactions between associated Capital gain exemption is parties must be performed at arm’s length. The Tax Authority has a right available on sale of shares. to adjust transaction prices if they do not conform to market prices.
24 Business Guide Lithuania 2018 Companies may benefit from investment, R&D, Patent box, film production and FEZ reliefs.
The Lithuanian transfer pricing rules Binding rulings and advanced Thin capitalisation rules refer to the Transfer Pricing Guide- pricing agreements The Lithuanian thin capitalisation lines for Multinational Enterprises There is a possibility to apply for a rules apply in respect of borrow- and Tax Administrations prepared binding ruling or advanced pricing ings from related parties as well as by the OECD to the extent that they agreement (APA) from the Tax Au- borrowings guaranteed by related do not contradict with the domestic thority in respect of the future trans- parties. The maximum debt to equity rules. actions. It takes about two months to ratio is 4:1. Interest on related-party All companies with annual revenue receive the ruling and it is binding to loans exceeding this ratio is treated exceeding EUR 2.9 million, as well the Tax Authority for five years. The as non-deductible for tax purposes. as all banks, insurance companies majority of the binding rulings and and credit institutions are required to APAs are in favour of the taxpayer. Amortisation of goodwill prepare transfer pricing documenta- There is a possibility to recognise tion in a specifically prescribed form. Non-binding rulings goodwill for tax purposes in Lithua- As from 1 January 2017, general It is a common practice to ask for nia. Tax goodwill can be amortised managers of companies that fail to non-binding rulings from the Tax on a straight-line basis over a period comply with the above-mentioned Authority, as the procedure is simpler of 15 years, if certain conditions are requirement for the transfer pricing and quicker compared to the proce- met. documentation may be subject to a dure of binding rulings. penalty ranging from EUR 1,400 to Non-binding rulings protect the Tax compliance 4,300. taxpayer from penalties and penalty The taxable period for CIT is usually interest if the Tax Authority changes a calendar year. The tax return has to its opinion in the future. In practice, be filed and CIT due has to be paid Effective CIT rate however, the Tax Authority does not once per year. Having obtained the in Lithuania is tend to change its opinion if the cir- permission from the Tax Authority, cumstances are fully disclosed in the the companies may use a taxable request for the ruling. period other than a calendar year. The companies are also subject to 5.9% advance CIT payment in Lithuania.
Special CIT reliefs
Relief Main benefits of the relief
Investment project relief The companies implementing investment projects are entitled to double deduction of costs of fixed assets meeting certain requirements by: - immediately reducing their taxable profit by up to 100% by such costs (the costs exceeding a taxable profit for the year can be carried forward for 4 years); - depreciating such fixed assets in a common manner. Taxable profit can be reduced by deducting these costs if they are incurred in 2009–2023 taxable periods. Research and Development (R&D) Expenses (except for depreciation (amortisation) charges of fixed assets) incurred for qualifying R&D relief works may be deducted three times during the tax period in which they are incurred. The deduction is possible without taking into account the results of R&D activities. Patent box As from 1 January 2018, a reduced CIT rate of 5% will be applied on the profit (calculated according to the formula provided in the CIT Law) from the usage and sale of intangible assets if: - income from the usage of intangible assets is earned and all the related expenses are incurred only by the developer of such assets, and - intangible assets are computer programmes protected by copyright or other intangible assets protected by patents or other protection certificates issued by the European Patent Office, EEA countries or countries with which Lithuania has a DTT. Tax relief for Free Economic Zone FEZ companies with capital investments not less than EUR 1 million or EUR 100 thousand (depending (FEZ) companies on the nature of activities that the company performs) and which meet certain other conditions are exempt from CIT for the first 10 years following the date of the capital investments and they are subject to a 50% reduction in CIT rate for 6 subsequent years. Tax relief for funds granted for film Companies are entitled to reduce their taxable profits and CIT payable by the amount of support production granted, provided the films meet the defined cultural content and production criteria. As a result, the company granting the support could get a cash-back from the budget, i.e. a grant of EUR 100 would result in EUR 111.25 cash-back from the budget. Certain conditions apply.
Business Guide Lithuania 2018 25 Withholding tax (WHT) Certain income sourced in Lithuania and received by a foreign entity otherwise than through its permanent establishments in Lithuania is subject to WHT.
The withholding tax return has to be filed and the tax due has to be paid on a monthly basis after the payment has been made.
Withholding tax
Type of payments subject to WHT Taxation rules
Dividends - Dividends paid to foreign/Lithuanian companies are not subject to WHT if the recipient has held not less than 10% of voting shares of the paying company for a continuous period of at least 12 successive months. This relief does not apply if the recipient of dividends is registered in blacklisted territories. - Dividends received by a Lithuanian company from foreign companies are not subject to taxation in Lithuania if a foreign company is registered in a country of European Economic Area (in this case no participation or holding limits are applied). - Otherwise, i.e. if exemptions described above are not applicable, dividends paid out to foreign/ Lithuanian companies are generally subject to WHT at a rate of 15%. - Dividends paid out to foreign companies are subject to 15% WHT in cases where tax benefit is the main or one of the main objectives of a particular structure of companies. Dividends received from foreign companies would be subject to 15% WHT if they were deducted from taxable profit at the distributing company level. Interest - Interest paid from Lithuanian companies to foreign companies established in the European Economic Area or in countries with which Lithuania has a DTT is not subject to WHT in Lithuania. - Otherwise, interest sourced in Lithuania and received by a foreign company is generally subject to WHT at a rate of 10%. Royalties - Royalties paid to the qualifying related parties, EU tax residents, are not subject to WHT in Lithuania. - Otherwise, royalties sourced in Lithuania and received by a foreign company are generally subject to WHT at a rate of 10%. Proceeds from the sale or lease - Such proceeds received by a foreign company are subject to WHT at a rate of 15%. of immovable property located in Lithuania Proceeds from performers’ or sports - Such proceeds received by a foreign company are subject to WHT at a rate of 15%. activities carried on in Lithuania Payments to the Board and - Such proceeds received by a foreign company are subject to WHT at a rate of 15%. Supervisory Board members
0% WHT rate applies to payment of dividends and interest in most cases.
26 Business Guide Lithuania 2018
21% VAT The standard VAT rate is 21% and it applies to the majority of goods and services supplied in Lithuania. Special VAT reliefs
• Doing business involving a 9% Lithuanian warehouse? The reduced VAT rate of 9% 5% Check the call-off stock simplifi- applies to: The reduced VAT rate of 5% cation and save costs. • books, newspapers, other applies to: Foreign companies that bring goods printed material; • pharmaceuticals, subject • public transport services; to Lithuania and sell them on from to restrictions; • heating of residential there without having an establish- • technical aid devices and premises; their repair for disabled ment in the country may avoid Lithu- • hotel accommodation. persons. anian VAT registration requirement and VAT compliance costs if they use the VAT call-off stock simplification. A Lithuanian warehousing service provider may take care of VAT obliga- tions of the foreign companies using its own local VAT number. • Having bad debts including VAT? Make use of the VAT relief for Value added tax Supply, chartering, rent, fuelling, bad debts. provisioning of vessels navigating Lithuanian VAT payers can recover (VAT) on the high seas and aircraft mostly output VAT that has been paid by The Lithuanian VAT legislation is used for transport services may be them to the Tax Authority but has aligned with the EU VAT legislation. subject to a 0% VAT rate. never been paid to them by their Thus, the Lithuanian VAT system If a 0% VAT rate applies, it is still clients. The period for a client’s debt does not differ from those in any possible to deduct input VAT on to be considered as a bad debt is gen- other EU Member State. purchases with 21% VAT, and refund erally 12 months from the date of the The standard VAT rate is 21%. a VAT overpayment in cash from the supply of goods or services. In some While keeping the base for reduced Tax Authority. cases, the VAT on bad debts may be VAT rates (9%, 5%) quite narrow, Financial, insurance, health and edu- recovered even prior to the expiry of Lithuania allows a variety of VAT cation services may be exempt from 12 months. exemptions and VAT reliefs, which VAT, but without giving rise to a right • Planning to restructure your help businesses to keep their admin- to deduct input VAT incurred. business? istrative costs lower and save their As a general rule, sale of real estate Make sure the transfer of a busi- cash flows. is exempt from VAT. The exemption ness is VAT free. may apply to old buildings and agri- If a taxable person transfers his VAT exemptions cultural land unless the seller opts to business or a part of it as a complex As a rule, all the supplies should be tax such transaction. to another taxable person, such a taxed with VAT at the standard or Sale of new buildings (i.e. before ex- transfer may be not subject to VAT reduced VAT rate. Some supplies piry of 24 months after their comple- in Lithuania. This relief reduces cash do not have to be taxed at all. VAT tion or reconstruction) are subject to flow issues for companies involved in legislation provides for more detailed a 21% VAT rate. The same applies to a deal. rules on such cases. building land. • Releasing non-EU goods for free A 0% VAT rate applies to supply of Long-term rent of residential prem- circulation in Lithuania? goods transported from Lithuania to ises and any rent of non-residential Save cash flows by making no another EU member state or outside premises may be exempt from VAT, import VAT payments. the EU. Services related to such sup- unless the lessor opted to tax such Lithuanian VAT payers importing plies may be zero-rated, as well. transactions. goods from non-EU countries to Lithuania can avoid the actual import VAT payment to the Customs Author- ity and thereby save their cash flows. Import VAT may be reported as pay- able and as deductible in the same VAT return.
28 Business Guide Lithuania 2018 Simple VAT rules for e-invoicing and e-archiving.
• Having high VAT costs due to be treated as proper invoices that do 1 October 2016, all VAT payers (in- VAT-exempt supplies? not need to be printed out. cluding the foreign companies regis- Check the option to tax VAT- tered for VAT purposes in Lithuania) exempt transactions. VAT registration within 5–7 are required to submit their invoice If real estate is acquired with VAT, days data to the Lithuanian Tax Authority owners of real estate may opt to Local companies and individu- on a monthly basis. tax real estate supply or rent and als must register for VAT purposes avoid the VAT costs. The option may if their turnover exceeds EUR 45 VAT refund within 1 month usually be exercised if the client is a thousand for a period of 12 succes- Lithuanian VAT payers can either VAT-registered business or a VAT- sive months. No threshold applies to offset the VAT refundable with other registered individual conducting a foreign taxable persons which have taxes payable or ask the Tax Authori- business. an obligation to register for VAT ty to refund the overpayment in cash. If opted to tax real estate transac- purposes from the commencement of VAT refund could be made within 1 tions, VAT is charged for at least 24 their business activities in Lithuania. month, though in practice it could months on the same type of transac- A VAT number should be obtained take longer – 2–3 months depending tions. before any supply is made. on the complexity of the Tax Author- There is an option to calculate VAT The VAT registration may be a ity’s investigation. on particular financial transactions complex process but it is definitely In case of large value real estate as well, for instance, on loan interest a quick one. A local company or transactions taxed with VAT, the pur- received from a group company. resident individual may obtain a VAT chaser could consider setting off his • Providing construction services? number within 5–7 business days. refundable VAT with the seller’s pay- Check local reverse charge VAT Companies established in other able VAT and thereby achieve cash rules. EU member states may be directly flow optimisation effect. Permission As from 1 July 2015, the compa- registered for VAT purposes, whereas from the Tax Authority is needed in nies providing construction services companies registered in non-EU this case. are not obliged to pay output VAT. countries must appoint a jointly li- Output VAT is calculated and can able fiscal agent who will take care of Brief list for irrecoverable be deducted by the purchaser of the all the VAT obligations. input VAT services. The new mechanism allows In general, VAT cannot be recovered saving cash flows for the service VAT reporting is easy on any expenses that are not related provider. For VAT compliance, Lithuanian VAT to supplies taxed with VAT. payers are required to file a one-page The Lithuanian list of specific pur- E-invoicing and e-archiving VAT return and pay VAT to the Tax chases not eligible for VAT recovery is Lithuanian VAT legislation allows Authority on a monthly basis. extremely short: using quite simple electronic invoic- A European Union Sales List must be • 100% VAT on purchase and rent ing and archiving solutions that help filed in addition to VAT return only of a passenger vehicle, but VAT on to reduce the level of consumption if goods or services are supplied to car fuelling and maintenance may and eliminates the need for keeping other EU Member States. be recovered at 100%; paper invoice archives. Even PDF In addition to the above-mentioned • 50% VAT on business representa- invoices sent by email to clients may VAT reporting requirements, as from tion expenses (from 2018). A part of irrecoverable input VAT may still be recovered by deducting it as an expense from the taxable Recoverable Option to tax income for CIT purposes. VAT on bad Import VAT VAT-exempt debts deferral supplies
Quick and Call-off stock Local reverse easy VAT simplification VAT-free charge VAT on refund transfer of a construction procedure business services
Business Guide Lithuania 2018 29 Personal income tax PIT A flat rate of PIT is
The tax year 15% The tax year is a calendar year. Income is taxed when it is actually received, and the PIT compliance requirements and payment deadlines depend on an individual’s residence status for tax purposes. Payroll taxes paid directly to the state Tax residence budget on an individual’s behalf from third A Lithuanian tax resident is deemed party’s funds are not considered as income in to be any of the following: • an individual whose permanent Lithuania. place of residence during the tax year is in Lithuania, or • an individual the location of whose personal, social or eco- nomic interests during the tax Lithuanian tax non-residents are Non-residents can also reduce their year may be considered to be in subject to the Lithuanian PIT on taxable employment income sourced Lithuania rather than in a foreign certain types of income sourced in in Lithuania by an annual tax-exempt country, or Lithuania. amount after the end of a calendar • an individual who stays in Lithua- The list of income is exhaustive, but year, provided they receive less than nia, continuously or intermittently, the main are the following: the pre-determined amount of tax- for 183 or more days during the • employment income; able worldwide income. tax year, or • income from distributed profits Non-taxable income • an individual who stays in Lithua- and payments to the members nia, continuously or intermittently, of the Management Board or the There is also a wide list of non-taxa- for 280 or more days during two Supervisory Council; ble income, such as: successive tax years and who • interest, except for interest re- • Contributions made by an em- stays during one of such years in ceived on the Lithuanian Govern- ployer on behalf of an employee, Lithuania continuously or inter- ment’s bonds; such as life insurance premiums, mittently, for 90 or more days. • income from the sale/lease of additional (voluntary) health immovable property located in insurance contributions and pen- Tax base Lithuania, etc. sion contributions, provided that Lithuanian tax residents are taxed the total amount of such contribu- on their worldwide income, by taking into account the provisions of the effective DTT. Employment income can be reduced by pre-determined tax-exempt amounts. Social security contributions (SSC) are not deduct- ible for PIT purposes. Lithuanian tax residents may also Status of tax returns and tax deduct from their taxable income balances statistics are available online 24/7. life insurance premiums, pension contributions paid to pension funds or payments for vocational training The Tax Authority provides pre-filled Electronic or studies (special conditions apply personal income tax returns based declaration in each case), provided that these on date provided by employers and expenses do not exceed 25% of the other third parties. system (EDS) amount of taxable income received over the tax year. The total deductible A pre-filled tax return can be life insurance premiums and pension submitted by one click. contributions amount should not exceed EUR 2,000.
30 Business Guide Lithuania 2018 tions does not exceed 25% of the Social security The reciprocal social security agree- employee’s annual employment- ments exist between Lithuania and Social security base related income (special conditions the following countries: Belarus, Individuals working under an em- also apply); Ukraine, Russia, Canada, the USA, ployment agreement in Lithuania • Income from the sale of housing the Netherlands, Moldova, the Czech must be covered by a social security Republic, Estonia and Latvia. The (including land) located in a EEA scheme. Lithuanian employers (with agreements with Belarus, Ukraine, member country, provided the certain exceptions) also contribute Canada and Moldova regulate the individual’s place of residence was certain amounts: payment of SSC, therefore, foreign declared there during the last two • to the Guarantee Fund in order employees seconded from the afore- years prior to the sale; to protect employees if the em- mentioned countries to Lithuania • Income received as a gift from ployers become insolvent and who obtain relevant certificates spouse, children (adopted chil- • to the Long-Term Employment on social security coverage in their dren), parents (adoptive parents), Fund in order to entitle the indi- home countries are also not required brothers, sisters, grandchildren viduals’ to receive payment from to pay SSC in Lithuania. this fund if their employment and grandparents, etc. Employees temporarily seconded to agreement is terminated upon Lithuania from the third countries, Double taxation elimination employer’s initiative without em- with which Lithuania has no recipro- ployee’s fault (special conditions cal social security agreements, are Residents are entitled to a relief from apply). not required to pay the Lithuanian double taxation under an effective Payment of SSC is also compulsory SSC as well, unless their permanent DTT. According to the domestic leg- on income received from distributed place of employment becomes Lith- islation, income (except for interest, profits by the members of the Man- uania or the secondment exceeds dividends and royalties) received by agement Board or Supervisory Coun- one year. a resident of Lithuania in a foreign cil and on other income received country, which is an EU Member by them as a remuneration for the Social security compliance State or with which Lithuania has a fulfilment of member functions. Pay- SSC should be paid and reported ment of SSC is also compulsory for valid DTT, is tax exempt in Lithuania. on a monthly basis. For the in- self-employed individuals, individu- Residents can also deduct the tax surers, it is mandatory to use an als receiving income under copyright advanced system of e-services actually paid on income sourced in agreements, etc. (“EDAS”) to provide the informa- third countries (not exceeding 15% tion to the Social Security Authori- of PIT payable on such income in Contribution rates ty. By one click, the users can check Lithuania), provided that support- Employed individuals are subject to the history of documents submitted ing documentation from a foreign SSC at a rate of 9%, and employers and payments made. EDAS simpli- tax administrator is provided to the are required to pay SSC of approx. fies the preparation and submission Lithuanian Tax Authority. 31% on gross amount of employ- of information, helps to save time ment-related income. Employer’s and improves efficiency. Tax compliance share of SSC depends on the level of accidents at work and profes- Social security benefits Lithuanian companies making pay- sional diseases as well as employ- ments to individuals (with certain ex- Individuals who contribute to the ment agreement types. Lithuanian social security system, ceptions) must withhold and pay PIT The members of the Management depending on their form of activity to the state budget as well as declare Board or Supervisory Council, who and the types of contributions paid, it on a monthly basis. The manda- receive income from distributed are entitled to receive sickness tory e-filing of income tax returns profits and other remuneration, are allowances, free healthcare from applicable to companies significantly obliged to pay pension and health public healthcare service providers, simplifies the reporting obligation. insurance contributions, and their maternity/paternity and children Lithuanian tax residents having an total SSC amount to 9%, whereas allowances, unemployment ben- obligation to file annual income tax the companies making such pay- efits, benefits for accidents at work returns and pay PIT or wishing to ments are also subject to SSC at a and occupational diseases, old age, rate of 25.3%. apply tax exempt amounts / deduc- disability and widows’/widower’s/ tions and receive a refund, have to orphans’ pensions. When granting International social security social benefits, insurance records submit their tax returns and pay (if The Lithuanian legislation on social acquired while working abroad applicable) the related PIT before the security has been harmonised with are accumulated according to the 1st of May of the following calendar the EU regulations. Foreign em- provisions of the EU regulations year. No tax return filing extensions ployees seconded to Lithuania from and the Lithuanian insured income are allowed. the EEA or Switzerland and their received is taken into account. Lithuanian tax non-residents who employers are not required to pay have an obligation to file income SSC in Lithuania if A1 certificate is tax returns and pay PIT to the state obtained. budget on the reported income are required to proceed on a monthly ba- sis accordingly, within 25 days from SSC are not applicable to employees who receive the actual receipt of such income. shares under stock option agreements after three- year period following the day on which the right to receive shares was granted to them. Other taxes
Other direct taxes
Tax Tax base Tax rate
Real estate tax The tax is levied on the value of immovable The tax rate ranges from 0.3% to 3% property. depending on local municipalities. Land tax The tax base depends on the average The tax rate ranges from 0.01% to 4% market value of land. depending on local municipalities. Land lease tax The tax base depends on the average The minimum tax rate is 0.1% and the market value of the leased state-owned maximum tax rate is 4%. land. Lottery and gaming tax For the organisers of lotteries, the tax base For the organisers of lotteries, the tax rate is the nominal value of lottery tickets put is 5%. into circulation. For the organisers of bingo, totalizator and For the organisers of bingo, totalizator betting - the tax rate is 15%. and betting, the tax base is the amount of The organisers of games with gaming income less the winnings actually paid out. machines and table games must pay fixed fees established for each gaming device. Pollution tax The tax is levied on stationary and mobile The tax rates vary depending on the type pollution sources used for commercial and toxicity of the pollutant in question. purposes, as well as on imported or produced certain filled packaging and specified products. Other indirect taxes
Customs duties Excise duties The Union Customs Code (UCC) as Excise duties are imposed on the fol- per Regulation EU 952/2013 is ap- lowing goods: plied in Lithuania from 1 May 2016. • ethyl alcohol and alcoholic drinks, The simplified code aims at facilitat- including beer, wine and interme- ing trade, reducing compliance costs diate products, for business, and implementing elec- • processed tobacco, including tronic data processing techniques for cigarettes, cigars, cigarillos and all exchanges of information between smoking tobacco, business and customs authority. • energy products, including fuel, The Customs Authority operates an petrol, kerosene, gasoline, fuel oil, Integrated Customs Information Sys coal, coke, lignite, natural gas and tem and provides electronic services electricity. based on one-stop-shop principle, i.e. the companies can provide and re- ceive all relevant information related to import, export and transit proce- dures in one place. The Tax Information Centre is a one-stop shop for all questions related to taxation.
Modern electronic declaration system (EDS) and “Mano VMI” ensures 24/7 service availability to the tax payers and makes the payment of taxes easy and fast.
32 Business Guide Lithuania 2018 Useful links in Lithuania
Invest Lithuania – www.investlithuania.com Investors’ Forum – www.investorsforum.lt Renkuosi Lietuvą – www.renkuosilietuva.lt Confederation of Lithuanian Industrialists – www.lpk.lt Lithuanian Business Confederation – www.lvk.lt Association of Lithuanian ICT Industry “Infobalt” – www.infobalt.lt Engineering Industries Association of Lithuania – www.linpra.lt Association of Lithuanian Chambers of Commerce, Industry and Crafts – www.chambers.lt Enterprise Lithuania - www.verslilietuva.lt Agency for Science, Innovation and Technology (MITA) – www.mita.lt Association of Lithuanian Banks – www.lba.lt Klaipėda Free Economic Zone – www.fez.lt Kaunas Free Economic Zone – www.ftz.lt Kėdainiai Free Economic Zone – www.investmentpartner.lt Šiauliai Free Economic Zone - www.investmentpartner.lt Marijampolė Free Economic Zone – www.balticfez.com Panevėžys Free Economic Zone – www.pfez.lt Sunrise Valley – www.sunrisevalley.lt Vilnius Tech Park - www.vilniustechpark.com Exhibition and Conference Management Lithuanian Exposition Centre LITEXPO – www.litexpo.lt Expo Vakarai – www.expo-vakarai.lt
Transport and Communications Vilnius Airport – www.vno.lt Kaunas Airport – www.kaunas-airport.lt Palanga Airport – www.palanga-airport.lt Lithuanian Railways – www.litrail.lt Port of Klaipėda – www.portofklaipeda.lt Lithuanian National Road Carriers Association “Linava” – www.linava.lt State Institutions President of the Republic of Lithuania – www.president.lt Lithuanian Parliament – www.seimas.lt Government of the Republic of Lithuania – www.lrv.lt Lithuanian Tax Authority – www.vmi.lt Lithuanian Customs Authority – www.cust.lt Lithuanian Centre of Registers – www.registrucentras.lt Lithuanian Department of Statistics – www.stat.gov.lt Lithuanian Department of Migration – www.migracija.lt Lithuanian Labour Exchange Office – www.ldb.lt Lithuanian Courts – www.teismai.lt Lithuanian Competition Council - www.kt.gov.lt Lithuanian Central Bank - www.lb.lt Lithuanian Ministry of Foreign Affairs - www.urm.lt Largest Cities Vilnius – www.vilnius.lt Kaunas – www.kaunas.lt Klaipėda – www.klaipeda.lt Panevėžys – www.panevezys.lt Šiauliai – www.siauliai.lt
Business Guide Lithuania 2018 33 Deals We help clients do better deals and create value through mergers, acquisitions, disposals and PwC restructuring. We work together with them to help develop the right strategy PwC firms help organisations and before the deal, execute their deals individuals create the value they’re Accounting seamlessly, identify issues and looking for. We’re a network of firms services points of negotiation and value, in 158 countries with more than and implement changes to deliver We provide a full range of synergies and improvements after 236,000 people who are committed accounting services starting with to delivering quality in assurance, the deal. Our Deals professionals are booking of primary documents able to discover and quantify hidden tax and advisory services. Tell us and ending with the preparation of what matters to you and find out value in every aspect of a deal. The financial statements in accordance services we provide include financial more by visiting us at www.pwc. with local Business Accounting com. due diligence (buy side and sell Standards and/or International side), tax due diligence, mergers and In Lithuania, the firm has been Financial Reporting Standards. operating since 1993 and currently acquisitions, valuation and strategy Our Accounting services are of as well as business recovery services. employs more than 180 people. Its advantage for the newly established clients include both multinational Our professionals can help to deal businesses and their branches as we with Public-Private Partnership, corporations and large local assist them with the development companies. Large investment and infrastructure of an efficient accounting projects. system, which complies with the Tax services requirements of both, the company Audit and audit- We advise on starting up a business and Lithuanian legislation. in Lithuania and assist foreign related services entities with company registration, Advisory services Our audit and accounting advisory tax compliance, tax disputes, The Advisory practices in Lithuania, services comprise audits and review mergers and acquisitions. Latvia, Estonia and Belarus are of the financial statements as well as Our Tax services include operating as one integrated practice. advice on accounting requirements comprehensive tax advice on all Management consulting (on issues of accounting and aspects of local and international The services we provide include preparation for the adoption of new taxation. performance measurement IFRS). Assignments include tax and improvement, financial Our Internal Audit team provides consultations, tax reviews, tax management, risk assessment and a range of internal and IT audit planning services, tax structuring, management. Our advisers can services, including outsourcing, co- preparation or advice on assess the potential of a business sourcing and assessment of internal transfer pricing documentation, undertaking and help achieve audit function. representation at tax disputes, tax long-term results in cost reduction, We also offer financial reporting calculation and reporting, tax due revenue maximisation, improvement advisory services, including solutions diligence and all aspects of tax of key business processes and for improvement of financial compliance. internal control mechanisms, as well reporting and consolidation. Our as implement a Perform a system professionals also provide business Legal services for the management of operational data analysis services as well as efficiency. services related to the preparation Law firm PricewaterhouseCoopers for the Personal Data Protection Legal Bukauskas ir Partneriai is a Regulation. part of PwC Legal, a global network Technology consulting of Legal Services. The services we provide include The PwC Legal network has the IT performance and IT security PwC’s Academy broadest geographical coverage (and cyber security) assessment PwC’s Academy can help your of any Legal Services network in services. Our IT risk assessment business develop the future leaders Central and Eastern Europe. PwC and management solutions are that you need to succeed in today’s Legal provides integrated legal designed to help companies marketplace. Your business and advice on tax disputes and offers optimise controls and management your people are able to benefit from other PwC services: consultations on of IT resources, as well as select our knowledge and experience. general legal issues and corporate and implement IT systems. Our PwC’s Academy delivers various issues, legal assistance in project technology professionals can provide trainings on: International Financial implementation and legal disputes, solutions for the robotisation of Reporting Standards, Internal legal due diligence. We advise on processes, help with drone-powered, Audit, ACCA and ACCA DipIFR, labour law issues. e-commerce, CRM and marketing Management Accounting, Tax, solutions. Recent Developments in Business Regulatory Legislation and other.
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PricewaterhouseCoopers UAB PwC Legal J. Jasinskio g. 16B J. Jasinskio g. 16B LT-03163 Vilnius, Lithuania LT-03163 Vilnius, Lithuania Phone +370 5 239 2300 Phone + 370 5 239 2300 [email protected] [email protected] www.pwc.com/lt www.pwclegal.lt
Rimvydas Jogela Nerijus Nedzinskas Rasa Radzevičiene Managing Partner Partner, Leader of Tax, Partner, for PwC Lithuania Legal and Accounting Services Assurance Leader [email protected] [email protected] [email protected]
Rokas Bukauskas Giedre Cater Aleksandras Papšys Audrius Leipus Leader of PwC Legal Accounting Services Leader Deals Leader Consulting Leader [email protected] [email protected] [email protected] [email protected]
Business Guide Lithuania 2018 35 www.pwc.lt