Doing business in Lithuania is possible having the appropriate legal form. A foreign investor is entitled to conduct business activity in Lithuania through an established legal person, branch, representative office or permanent establishment (registration at the tax office).

This article presents the requirements and conditions for the foreign investor to establish one of the most popular legal entity’s form in Lithuania - a closed joint-stock company (in Lithuanian language “uždaroji akcinė bendrovė" or “UAB”).

A company with a legal form is an independent Lithuanian legal entity. A foreign investor is entitled to start a business in the Republic of Lithuania under the same conditions and to the same extent as Lithuanian entities.

However, before starting a business, a closed joint-stock company should be registered in the Register of Legal Entities first. In the Register of Legal Entities, all legal persons should provide required statutory data about themselves and their activities. The organization administrating state registers in Lithuania is the state-owned enterprise Centre of Registers (in Lithuanian language VĮ "Registrų centras", www.registrucentras.lt).

Before the submission of an application for registration of a closed joint-stock company in the Register of Legal Entities, the notary public should confirm the compliance of the information contained in the documents, compliance of the statute with legal requirements and the fact that registration of the company is possible.

In order to establish a closed joint-stock company by a foreign legal entity, the following legal documents are required by the notary:

• Statute (in Lithuanian language “įstatai”). The company's statute is a document, which the company uses in its activities. The statute must indicate the name of the company, legal form, share capital, number of shares, objectives, description of the company's operations, company bodies, their competences and other information that is necessary in accordance with the Law  on Companies of the Republic of Lithuania. It should be noted that in Lithuania there is a mandatory one-person corporate body - the manager (director) of the company. When establishing a company, a shareholder may optionally appoint a supervisory board or a management board. However, these management bodies are not mandatory. If a supervisory board is elected, then before registering the company, it should elect the management board or the manager of the company if the management board is not appointed. If only the management board of the company is appointed, the chosen board should choose the head of the company. In the event that neither the management board nor the supervisory board are appointed, the manager of the company is elected by the shareholder (s). It should be noted that in practice it is most common to meet only one corporate body - the company's manager (director). The management board and the supervisory board are usually appointed in very large companies (usually state-owned), where in such a way the risk of improper management and responsibility is divided.
• Incorporation agreement (in Lithuanian language “steigimo sutartis”) or the incorporation act (in Lithuanian language “steigimo aktas”). Incorporation agreement, minutes of the constituent meeting and the list of shareholders of a closed joint-stock company is necessary when the company is established by more than one person. If a company is established by one person only, it is enough to sign the incorporation act.
• Written confirmation from the bank on the paid-up share capital. The signed incorporation agreement or the incorporation act gives the right to open a cumulative bank account of the company. When the cumulative bank account is opened, the shareholder shall deposit the capital, which shall be equal to acquired shares. The minimum share capital of a closed joint-stock company is 2,500 euros. It should be noted that after the company is established, the company is entitled to use the share capital in its daily operations. When the share capital is paid into the opened cumulative bank account, it is necessary to get a written confirmation from the bank that the share capital is fully paid.
• Extract from the register in which the foreign legal entity (shareholder) is registered. The extract must be confirmed by an apostille and translated into Lithuanian language. If, in accordance with the law of a foreign state, an extract is not issued, another document confirming the fact of registering a legal person is required.
• Written permission to register the company's registered office address. It should be noted that in the incorporation agreement or in the incorporation act it is necessary to indicate the registration address of the company being established. The company's registration office address is one of the essential conditions for the establishment of a company. Permission to register the company's registered address must be issued by the owner of the property. When a company is registered in a real estate, which is owned by natural persons, a notarial form of a permission is required. If the property is owned by several owners, the approval on the company‘s registration must be signed by all owners. When a company is registered in a real estate, which is owned by a legal person, a written permission, signed by the representative (head) of the legal person is required. It shall be noted that such permission does not have to be certified by a notary. If the premises are pledged to the bank, the bank's written consent to register the company’s registered office address is required as well.
• A copy of the ID card or passport of the members of the management board (if appointed), the supervisory board (if appointed) and the manager of the established company, if the appointed persons are non-residents of the Republic of Lithuania.

With the registration of a new company in the Register of Legal Entities, it is possible to register a new company as a VAT payer (in Lithuanian language “PVM mokėtojas”) as well. The tax inspectorate will automatically receive information about the registration of a new company, and the decision will be forwarded within three business days via the electronic system of tax inspectorate.

If, during the registration, a closed joint-stock company does not intend to register as a VAT payer, such right can be used in the future. It should be noted, however, that each closed joint-stock company that within 12 months imported goods worth 14,000 euros from European Union countries or has achieved revenues of 45,000 euros, should register as a VAT payer.

A fee of 57.34 euro is charged for the registration of a closed joint-stock company in the Register of Legal Entities. Fee in the notary’s office is around 180 euros.

Although it is possible to establish a company also electronically in Lithuania, however, the possibility of establishing such a company is only available to persons with an electronic signature (for residents of the Republic of Lithuania), therefore this option was not analyzed in this article.