How to start a business in Lithuania 2026: full guide

To start a business in Lithuania in 2026 you take four steps: choose a legal form (individual activity, business certificate, small partnership (MB) or private limited company (UAB)), register the activity or company (via the Register of Legal Entities or the State Tax Inspectorate, VMI), sort out taxes and social insurance ("Sodra"), and prepare the practical launch — a bank account, bookkeeping and often a website. Which form and which taxes suit you depends on your income, on whether you work alone or with a team, and on whether you want to separate personal liability from the business.

This guide is the starting point: from here you move on to detailed articles about each form, the registration steps, share capital, taxes and "Sodra". All rates, thresholds and amounts here are indicative (2026) and for general understanding — always check the current figures at the Register of Legal Entities, VMI and "Sodra", as they are updated every year.

There is no single "best" form — the right start is the one that matches your income, risk and growth plans. Begin with the question "how much will I earn and who will I work with", not with what a friend chose.

1. Choose a legal form: individual activity, business certificate, MB or UAB

The first and most important decision is the legal form, which drives your taxes, liability and day-to-day admin.

• Individual activity and the business certificate are an individual's activity: you are liable with all your personal assets, and bookkeeping is minimal. The business certificate has a fixed tax and an income ceiling; individual activity is taxed progressively on profit.
• A small partnership (MB) and a UAB are separate legal entities with limited liability (business debts do not touch personal assets). An MB needs no share capital and is founded by 1 to 10 natural persons. A UAB's share capital is EUR 1,000, of which at least 25% (EUR 250) must be in place before registration and the rest paid within 12 months; UAB shareholders can be both natural and legal persons (up to 249).

For a detailed, numbers-based comparison of individual activity, the business certificate and an MB, see individual activity, business certificate or MB. When choosing between two legal forms, read MB or UAB — what to choose in 2026; if you are weighing the old individual enterprise, see individual enterprise or MB and what limited vs unlimited liability really means.

2. Register the company: steps, cost and timing

If you chose an MB or UAB, the next stage is registration at the Register of Legal Entities. Simplified, the path is: choose and reserve a name → founding documents → accumulation account for the share capital (UAB) → signing (with an e-signature or at a notary) → registration at the Register → registration with VMI and "Sodra".

Indicative amounts and timing (2026):

• Electronic registration at the Register — about EUR 30.
• Name reservation — about EUR 16 (valid for up to 6 months).
• Notary, if required — about EUR 85–338 depending on capital.
• Registration takes about 3 business days at the Register (in practice often 5–10).

We cover each stage separately: how to set up a UAB step by step and how to set up an MB; how much it costs to set up a company; how much share capital a UAB needs; how to choose and reserve a name; how to register remotely with an e-signature. If you are not a Lithuanian citizen — can a foreigner set up a company in Lithuania.

3. Sort out taxes and "Sodra" (2026)

Taxes depend on the form, but the key 2026 figures are:

• Corporate income tax (CIT) — 17%, for small companies — 7%, and newly established small companies may pay 0% for the first two years (if fewer than 10 employees, income up to EUR 300,000 and the company is not part of a group).
• Dividends are taxed at 15% personal income tax.
• The standard VAT rate is 21%; you must register as a VAT payer once turnover over the last 12 months exceeds EUR 45,000.
• For the self-employed, from July 2026 the "Sodra" contribution base rises to 90% of taxable income (it was 50%).

We explain the basics in what VAT is and how it works and when you must register as a VAT payer (the EUR 45,000 threshold). What companies actually pay — what taxes a UAB pays and what taxes an MB pays; on the relief — 0% corporate tax for the first 2 years. Also important: how much "Sodra" to pay, whether to register for VAT voluntarily and how to pay yourself — salary or dividends. For a quick estimate use the VAT calculator and the salary calculator, and we explain payroll taxes (PIT, "Sodra", tax-free amount) in the 2026 salary tax guide.

4. Understand what changes in 2026

A tax reform took effect in 2026: corporate tax rose from 16% to 17% (for small companies from 6% to 7%), new reduced VAT rates appeared (12% and 5%), and the self-employed "Sodra" base rises from 50% to 90%. See the full overview in what changes for business from 2026, and the most common mistakes in 2026 tax reform: common mistakes.

5. Prepare the practical launch: bookkeeping, bank account, website

Once the form is chosen and the company registered, the practical part remains:

• Bookkeeping. A UAB almost always needs an accountant; for an MB with no employees and not VAT-registered, bookkeeping is simpler. Read do you need an accountant, what can you do yourself.
• Bank account. A UAB first needs an accumulation account, then a settlement account. When you need it and how to choose a bank or fintech is in do you need a business bank account; we explain IBAN structure in the IBAN guide, and you can check an IBAN with the IBAN checker.
• Website and client flow. A new business often needs a website, invoicing and its first clients. How to align the company name with a domain is in company name and domain. We lay out the whole start in the launch checklist.

Example: the path from idea to first invoice

An indicative path (2026) when setting up an MB or UAB:

1. Choose the form based on income and risk.
2. Choose and reserve a name.
3. (UAB) open an accumulation account and deposit at least EUR 250.
4. Sign the founding documents (e-signature or notary) and register at the Register of Legal Entities.
5. Register with VMI and "Sodra", and as a VAT payer if needed.
6. Open a settlement account, arrange bookkeeping and issue your first invoice.

Each step has its nuances — they are covered in the articles linked above.

Check your numbers with calculators and official sources

Before you decide, run your own numbers: taxes, prices with VAT and the amount left "in hand". Start with the free set of calculators — including the VAT and salary calculators — and always verify the current thresholds at VMI, "Sodra" and the Register of Legal Entities.

The full business-startup guide: all articles

You will find deeper answers in the detailed cluster articles — here they are, grouped by topic.

Which form to choose: MB or UAB — what to choose in 2026 · individual enterprise or MB · limited vs unlimited liability · when to switch individual activity to a company · how to convert an MB into a UAB · business certificate price in 2026 · the yearly cost of running a UAB.

How to register: how to set up a UAB step by step · how to set up an MB · how much it costs to set up a company · MB vs UAB setup costs · how long registration takes · registering remotely with an e-signature · the Register self-service · how much share capital a UAB needs · what to do with capital after registration · how to choose and reserve a name · company name and domain · can a foreigner set up a company · what to do in the first week.

What taxes: what taxes a UAB pays · what taxes an MB pays · 0% corporate tax for the first 2 years · how much Sodra to pay · first-year Sodra relief · registering for VAT voluntarily · salary or dividends · how an MB member withdraws money · what changes for business in 2026 · 2026 reform: common mistakes.

Practical launch: do you need an accountant · accounting software or an accountant · do you need a business bank account · the full launch checklist.

Disclaimer: all rates, thresholds and amounts in this article are indicative (2026) and for general understanding only — this is not tax or legal advice. Always check the current figures at the official VMI, "Sodra" and Register of Legal Entities sources, or consult an accountant.

Want to start your business in an orderly way — with a website, client flow and automated invoices from day one? web1o helps small businesses build a fast website and organise everyday processes. Start with the free calculators and, if you need a concrete plan, book a free consultation.