Lithuania is a popular place for people to start businesses. More and more Europeans are going there in order to start their own businesses. Thanks to the internet, many Lithuanians are starting out on their own too. After all, why put money in somebody else’s pocket when with a mobile device and an internet connection you can start your own business?
However, while Lithuania is a popular place for start-ups, that’s not to say that there aren’t still rules, challenges, and hurdles that need to be overcome.
This post will tell you six things that you need to know if you want to do business in Lithuania.
Business Licensing
One thing you need to know about starting a business in Lithuania is that the country is very strict when it comes to licensing. If you do not have the right license, then you won’t be able to legally operate your business. Operating without a business can get you into a lot of trouble. Whether you need an electronic money institution license in Lithuania, or a casino, alcohol, or even hospitality license, you can apply for it online. Make sure that you have all of the supporting evidence ready so that your application can be processed as quickly as possible. If you are unsure whether or not your business needs a license, reach out to a business lawyer or expert and ask for their advice. It is a good idea to learn to speak Lithuanian, so you can communicate with them more effectively.
Shared Language
As mentioned in the last part of the previous section, it’s a good idea to learn Lithuanian so that you can communicate more effectively. If you plan on doing business in Lithuania, then you need to be able to speak to Lithuanians, even if your business is an e-commerce one and you’re only doing business there for tax advantages. Many Lithuanians do speak English, so you shouldn’t have trouble communicating while you’re learning the language. You can take an online course or go to college in person.
Highly Competitive
Lithuania is a very competitive place to do business. However, the nation’s competitiveness is only an issue if you plan on starting a physical business, offering products directly to the Lithuanian people. If you’re starting an e-commerce business and plan on catering to a wider, more international audience, then competition is not something you need to think about, at least as far as Lithuanian companies go. The best way to outdo the competition is to ensure you have a more effective digital marketing scheme than them. Make sure that your products and services are more refined and better, too.
Bank Account
Ideally, you should hold a Lithuanian bank account if you want to do business there. While you can open a digital bank account with a payment processor like PayPal, it’s a lot simpler to just have a Lithuanian one. Having a Lithuanian account will make it easier for you to withdraw cash and pay for things, not to mention keep better financial records which you’ll need for your taxes at the end of the year. Most Lithuanian banks will offer accounts to people from other countries, as long as they have evidence of who they are.
Paying Taxes
Most people go to Lithuania to do business because of the nation’s low taxes. Lithuania has the lowest tax in all of the European Union. Businesses only pay a tax of up to 5% if they earn less than 300,000 euros. However, in terms of tax collection, Lithuania’s government are very strict. If you attempt to avoid paying taxes, you can be fined, arrested, and even jailed. If you are not sure how to proceed with filing your taxes, then reach out to an accountant. You should be able to find an accountant who’s willing to work with you online. Accountants can be expensive though, so it’s better to learn to file your taxes yourself.
Supporting the Economy
If you want to go and live in Lithuania so that you can enjoy the nation’s tax advantages and low cost of living, do everything you can to support the local economy. While it’s not mandatory for you to, it is the right thing to do. If you do not support the Lithuanian economy (i.e., by eating out in small restaurants, supporting local grocery stores, and buying Lithuanian-made products) then you are essentially just exploiting the country. Supporting the local economy will help to make it a prosperous and more successful nation.
Lithuania is a great place to do business. If you are a business owner, then you should consider moving there, or starting up there. The main reason why business owners go to Lithuania is the nation’s low tax rates. However, it is also a cheap, friendly, and welcoming place, ideal for start-ups.
