Establishment of UAB

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> Establishment of UAB

Establishing a Uždaroji Akcinė Bendrovė (UAB), or Private Limited Liability Company, in Lithuania involves several key steps:

  1. Choose a Name: Ensure the company name is unique and available.
  2. Prepare Documents: Draft the company’s statutes, which outline the company’s structure and operations. Obtain a registered legal address in Lithuania.
  3. Register the Company: Submit the necessary documents to the State Enterprise Centre of Registers, including the statutes, proof of address, and proof of identity.
  4. Tax Registration: Register with the State Tax Inspectorate for VAT and corporate tax purposes.
  5. Open a Bank Account: Set up a business bank account for financial transactions and deposit the minimum share capital of €2,500.
  6. Compliance: Adhere to local accounting, reporting requirements, and employment regulations.

The UAB is ideal for small to medium-sized businesses due to its limited liability and flexible structure

Establishing a Uždaroji Akcinė Bendrovė (UAB), or Private Limited Liability Company, in Lithuania involves a series of detailed steps to ensure compliance with local laws and regulations. Here’s a comprehensive guide to the process:

1. Understanding UAB

Description:

  • UAB is a popular business structure in Lithuania, suitable for small to medium-sized enterprises.
  • Share Capital Requirement: A minimum share capital of €2,500 is required.
  • Liability: Shareholders’ liability is limited to their contribution to the share capital.

2. Pre-Registration Requirements

Business Name:

  • Choose a Name: The name must be unique and comply with Lithuanian naming regulations. You can check availability and reserve the name through the State Enterprise Centre of Registers.

Legal Address:

  • Address Requirement: The UAB must have a registered legal address in Lithuania. This can be a physical office or a virtual office service.

3. Drafting and Notarizing Documents

Company Statutes:

  • Prepare Statutes: Draft the company’s statutes (articles of association), which outline the company’s governance, shareholder rights, and operational rules.
  • Notarization: Although not always mandatory, notarizing the statutes can facilitate the registration process and ensure legal validity.

Shareholders and Directors:

  • Appoint Shareholders and Directors: The UAB requires at least one shareholder and one director. Shareholders can be individuals or legal entities.

4. Company Registration

State Enterprise Centre of Registers:

  • Submit Documents: Register the UAB with the State Enterprise Centre of Registers. Required documents include:
    • Completed registration form
    • Statutes of the company
    • Proof of address
    • Proof of identity of the founders
    • Bank confirmation of the deposited share capital (minimum €2,500)

Registration Process:

  • Application Submission: Submit the application either online via the Centre’s portal or in person. Online registration is generally faster.

5. Tax Registration

State Tax Inspectorate:

  • Register for Taxes: After registration, the UAB must register with the State Tax Inspectorate. This includes:
    • VAT Registration: Required if the company’s taxable turnover exceeds the VAT threshold or if the company wishes to reclaim VAT.
    • Corporate Income Tax: Register for corporate income tax purposes.

6. Opening a Bank Account

Business Bank Account:

  • Open an Account: Set up a business bank account in Lithuania. This account will be used for financial transactions and for depositing the minimum share capital of €2,500.

7. Compliance and Reporting

Accounting:

  • Set Up Accounting: Implement an accounting system that complies with Lithuanian accounting standards. Consider hiring a local accountant or accounting firm.

Annual Reports:

  • Prepare and File: The UAB must prepare and file annual financial reports with the State Enterprise Centre of Registers and submit tax returns to the State Tax Inspectorate.

Employment Regulations:

  • Adhere to Labor Laws: Follow Lithuanian labor laws, including employee contracts, working conditions, and health and safety regulations.

8. Licenses and Permits

Industry-Specific Licenses:

  • Obtain Necessary Licenses: Depending on your business activities, you may need specific licenses or permits. Check with local authorities or industry regulations.

9. Legal and Advisory Services

Consult Professionals:

  • Legal and Financial Advisors: Engage with local legal and financial advisors to ensure compliance with all regulations and to assist with the establishment process.

10. Post-Establishment

Operational Setup:

  • Begin Operations: Once registration and compliance requirements are complete, you can start business operations.

Ongoing Compliance:

  • Monitor Regulations: Regularly review and adhere to legal, accounting, and tax regulations to ensure smooth business operations.

Establishing a UAB in Lithuania offers a flexible and efficient structure for business operations, supported by a straightforward registration process and favorable business environment