Opening a Business Account in Lithuania Made Easy

Did you know Lithuania is ranked 11th globally for ease of business, and it takes as little as 3 days to establish a company here? With over 2,500 euros required as initial share capital, opening a business account is crucial in starting your entrepreneurial journey in this dynamic EU market. Whether you’re a local entrepreneur or an international investor, understanding the process and requirements can save you time and money. This blog post will teach us how to open a business account in Lithuania effectively and efficiently.

Benefits of Opening a Business Account in Lithuania

Opening a business account in Lithuania has several advantages that enhance business ease. Firstly, the country’s favourable regulatory environment ensures straightforward procedures and digital access to banking services. Business accounts facilitate seamless transactions within the EU market, enabling businesses to leverage Lithuania’s strategic location for cross-border trade.

Additionally, banks in Lithuania offer multi-currency accounts, allowing businesses to transact in euros and other major currencies like GBP and USD. This is especially beneficial for companies operating internationally. Lastly, Lithuania’s competitive banking fees and startup-friendly policies make it a cost-efficient business option.

Types of Business Accounts Available in Lithuania

Lithuanian banks and financial institutions offer several types of business accounts tailored to meet different business needs:

Accumulation Accounts

These are mandatory for new companies to deposit the initial share capital during the registration process. They cannot be used for day-to-day operations but as a precursor to activating a settlement account.

Settlement Accounts

After the company is registered, the accumulation account is converted into a settlement account. This account handles daily business transactions, such as receiving payments and paying expenses.

Multi-Currency Accounts

For international businesses, multi-currency accounts support transactions in multiple currencies, reducing currency conversion fees.

Specialised Accounts

Banks also offer customised solutions, such as group accounts for holding subsidiaries or trustee accounts for legal professionals managing third-party funds.

Requirements for Opening a Business Account in Lithuania

The requirements for opening a business account in Lithuania differ for local entrepreneurs and non-residents. However, specific documentation and steps are standard across both categories.

For Local Businesses

• A company registration certificate issued by the Register of Legal Entities: This certificate is proof that your business is legally registered in Lithuania. It includes critical details such as the company’s name, registration number, and incorporation date. Businesses must apply for this certificate with the Lithuanian Register of Legal Entities by submitting the required documentation, including the company’s founding papers and notarised agreements. The certificate is an essential document that validates your business’s legitimacy.
• Articles of association or a founding agreement: The Articles of Association outline the company’s rules, operations, and governance structure. This document includes details about the business activities, rights and obligations of shareholders, management structure, and decision-making processes. A founding agreement is required for companies established by multiple founders and details each party’s roles and shares. All shareholders must sign these documents and, in many cases, notarised to ensure legality.
• Proof of the company’s registered address in Lithuania: To open a business account, you must provide evidence of your company’s physical presence in Lithuania. This is typically done through a lease agreement, utility bills, or property ownership documents. The registered address is vital for official correspondence and regulatory purposes. Banks often verify this address to ensure compliance with local regulations.
• Personal identification documents of shareholders and directors: Banks must identify all individuals associated with the company to ensure transparency and compliance with anti-money laundering (AML) regulations. Acceptable forms of identification include passports or national ID cards. These documents must be valid and clearly show the individual’s name, date of birth, and photograph. In some cases, additional documentation may be requested to verify the authenticity of these individuals.

For Non-Residents

• A valid passport or national ID: Non-residents must provide their original passport or national ID as proof of identity. The document should be current and include all necessary personal details, such as the name, nationality, date of birth, and photograph. Banks may require scanned copies of these documents during the application process, but the original document may need to be presented during in-person visits.
• Notarised copies of incorporation documents (if applicable): For non-resident businesses, incorporation documents like the Articles of Association and the company registration certificate must often be notarised and translated into Lithuanian or English. The notarisation confirms the authenticity of the documents, while translations ensure they are understandable to local authorities and banking institutions.
• Details about the purpose of the account and the company’s financial activities: Banks require a clear statement outlining the intended use of the business account. This includes details on the company’s operations, expected transaction volumes, and primary business activities. Providing this information ensures compliance with AML and counter-terrorism financing (CTF) regulations and helps the bank assess the suitability of the account for your needs.
• Proof of address for shareholders or directors, such as utility bills or lease agreements: Non-residents must provide proof of address to verify their residential or business location. This can include utility bills, bank statements, or lease agreements. These documents should be recent, typically no older than three months, and must display the individual’s name and address. In some cases, these documents may also need to be notarized.

Choosing the Right Banking Provider

When opening a business account, it is critical to select the right bank. Lithuania offers a range of options, including traditional banks, digital banks, and fintech solutions.

Traditional Banks

Central banks like Swedbank, SEB, and Šiaulių Bankas provide comprehensive banking services, including loans, payment processing, and international transfers. These institutions are reliable and cater to businesses of all sizes.

Digital Banks and Fintech Solutions

Providers like Paysera, Wallter, and Revolut are popular for their speed, flexibility, and cost-efficiency. They offer features like multi-currency accounts, low transaction fees, and API integrations for automation.

Factors to Consider

• Fees for account setup, maintenance, and transactions.
• Availability of digital banking tools for remote account management.
• Multi-currency support and international payment options.
• Customer service accessibility and language preferences.

Step-by-Step Process to Open a Business Account in Lithuania

1. Preparation of documents: Gather all required documents, including the company’s founding papers, registration certificates, and identification details of shareholders and directors. If necessary, ensure the documents are notarised and translated.
2. Reserve a company name: Although optional, reserving a company name ensures exclusivity. Submit the reservation application to the Register of Legal Entities, which is valid for six months.
3. Choose a banking provider: Research and select a bank or fintech provider based on your business needs. Consider the services offered, costs, and customer reviews.
4. Open an accumulation account: Visit the selected bank to open an accumulation account. Deposit the minimum share capital required by law (€2,500 for a UAB). Banks may require proof of business registration intent.
5. Notarise documents: Notarisation of documents ensures their legality and acceptance. If your country is part of the Hague Convention, an Apostille may be required for international legalisation.
6. Register the company: Submit all notarised documents to the Register of Legal Entities. Once approved, your business receives a registration certificate, enabling further account processes.
7. Convert the account: After registering the company, inform your bank to convert the accumulation account into a settlement account for regular business operations.
8. Set up additional services: Enable online banking, payment gateways, and multi-currency handling features to enhance operational efficiency.

Costs Involved in Opening a Business Account

Account Opening Fees

Costs vary depending on the banking provider, ranging from zero to several hundred euros. Some banks waive the opening fee for startups.

Monthly Maintenance Charges

Typical fees range from €5 to €50, depending on the chosen services and account type.

Additional Fees

These may include currency conversion charges, transaction fees, and charges for special features like multi-currency accounts or API integrations.

Comparison of Some Top Banks Providing Business Bank Accounts in Lithuania

Common Challenges and How to Overcome Them

Language Barriers

Many banks operate in Lithuanian, which could pose difficulties for non-residents. Opt for providers with English-speaking customer support or hire a local representative.

Complex Documentation

Ensure all paperwork is complete and properly notarised to avoid delays.

Non-Resident Challenges

Not all banks cater to international clients. Choose banks with services tailored for foreign entrepreneurs.

Time Delays

Prepare all documents well in advance and choose providers offering digital onboarding to expedite the process.

Additional Tips for Non-Residents

• Hire a local representative: A legal representative familiar with Lithuanian banking procedures can simplify the process.
• Opt for remote services: Many fintech solutions and some traditional banks allow remote account opening, reducing the need for in-person visits.
• Consider multi-currency accounts: These accounts help minimise currency exchange fees for international transactions.

Legal and Tax Implications After Opening a Business Account

Legal Obligations

• Company Registration: After opening an accumulation account and depositing the required share capital (minimum €2,500 for a Private Limited Liability Company), you must register your company with the Lithuanian Register of Legal Entities. This process involves submitting notarised founding documents and proof of capital deposit.
• Licenses and Permits: Depending on your business activities, you may need specific licenses or permits. For instance, financial services, insurance, and brokerage activities require special authorisations. It’s crucial to identify and obtain all necessary permits before commencing operations.
• Employment Regulations: Compliance with Lithuanian labour laws is mandatory if you plan to hire employees. This includes following employment contracts, working hours, minimum wage requirements, and employee benefits.

Tax Obligations

• Corporate Income Tax (CIT): The standard CIT rate in Lithuania is 15%. However, small companies with fewer than ten employees and annual gross revenues below €300,000 may qualify for a reduced rate of 0% for the first year and 5% after that, provided certain conditions are met.
• Value Added Tax (VAT): The standard VAT rate is 21%. Businesses must register for VAT if their annual taxable turnover exceeds €45,000. Once registered, companies are required to charge VAT on taxable goods and services and remit it to the tax authorities.
• Social Security Contributions: Employers are obligated to contribute to social security on behalf of their employees. The employer’s contribution rate is approximately 30.98% of the employee’s gross salary, while employees contribute around 9%.
• Personal Income Tax (PIT): The standard PIT rate for employees is 15%. Employers are responsible for withholding this tax from employees’ salaries and remitting it to the tax authorities.
• Real Estate Tax: If your company owns real estate, it may be subject to real estate tax, which, depending on the municipality, ranges from 0.3% to 3% of the property’s value.

Compliance and Reporting

• Accounting Standards: Companies must maintain accurate financial records by Lithuanian accounting standards. Annual financial statements should be prepared and submitted to the Register of Legal Entities.
• Tax Filings: Regular tax returns must be filed within specified deadlines, including CIT, VAT, and social security contributions. For example, the annual CIT return is due by the 15th day of the sixth month following the tax period.
• Audits: Statutory audits may be required depending on the size and nature of your business. Companies exceeding certain thresholds in revenue, assets, or employee numbers are subject to mandatory audits.
• Penalties for Non-Compliance: Failure to adhere to legal and tax obligations can result in penalties, including fines, interest on overdue taxes, and, in severe cases, suspension of business activities. Therefore, it is advisable to consult with legal and tax professionals to ensure full compliance with Lithuanian laws and regulations.

By understanding and fulfilling these legal and tax obligations, you can establish a solid foundation for your business in Lithuania, fostering growth and sustainability.

FAQs

How can I open a business bank account in Lithuania?

To open a business account, prepare the required documents, such as the company registration certificate and proof of address. Then, choose a bank, submit your application, and provide any additional information requested. Once verified, your account will be approved. Some banks also offer online application options.

Can a foreigner open a bank account in Lithuania?

Yes, foreigners can open accounts in Lithuania with documents like a valid passport, proof of address, and incorporation papers. Banks may require in-person verification. Requirements vary by provider, so it’s best to confirm directly with the chosen bank.

Can a foreigner own a business in Lithuania?

Foreigners can fully own businesses in Lithuania with no restrictions. They enjoy equal rights as local entrepreneurs and can establish entities like Private Limited Liability Companies (UAB). Lithuania encourages foreign investment and entrepreneurship.

Is Lithuania a good place to start a business?

Lithuania offers a favourable business environment, EU access, skilled labour, and competitive costs. Its strategic location and ease of business make it ideal for startups and international ventures. Many companies thrive due to supportive regulations and low operational expenses.

How to get a Lithuania business visa?

Apply for a Schengen Business Visa (Type C) for short-term activities or a National Visa (Type D) for long-term stays. Provide documents like a passport, invitation letter, and proof of financial means. Submit your application to the nearest embassy or consulate and await approval.