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4 min read
Lithuania for eXtrepreneurs
With an overall rank 16th of Ease of Doing Business, 2nd for procedure for starting a business and 3rd as lowest profit taxer, Lithuania is among the fastest growing countries in Europe in terms of establishing a new business.
In 2021 a data was published which showed that Lithuania has the highest number of FinTech Companies in the EU. Not only this, Lithuania has a business-friendly environment and vibrant tech culture which have made it a hotspot for business expansion. Additionally, Lithuania offers various other benefits including beneficial tax structure, good business reputation, no exchange regulations on businesses incorporated in Lithuania and easy access to the Schengen area.
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Lithuania Startup Ecosystem
In 2023, Lithuania secured the second position worldwide in terms of venture capital investments. In the past few years the value of Lithuanian startups has increased 17X. In 2022, the country attracted an investment of €238 million, with the total value of startups rounding off to be about €10 billion. This positions Lithuania as one of the most rapidly advancing startup ecosystems in the region.
In the Venture Capital investment landscape for 2022, Lithuania secured the 6th position among Central and Eastern European countries, and an impressive 3rd place for VC investment per capita.
The primary beneficiaries of funding in Lithuania are the Security and Fintech sectors, reflecting robust support for innovation in these industries. Notably, companies headquartered in Vilnius accounted for a substantial 95% of the total funding acquired by Lithuanian startups.
Lithuania’s startup ecosystem is a hub for opportunities and growth for eXtrepreneurs, providing support at various stages of a startup such as pre-startup, startup and scale up, thus providing a business with all the resources for it grow and thrive in Europe.
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Lithuania Company Formation
The important decision for an eXtrepreneur seeking to expand to Lithuania, is selecting the appropriate entity structure, as it can significantly influence the tax implications and future growth strategies of the organization.
Lithuania has two popular entity type for eXtrepreneurs i.e. Private Limited Company (UAB) and Limited Partnership (KUB). While the Private Limited Company is most suitable for foreign investors as the said structure can be 100% foreign owned, whereas the Limited Partnership offers benefits such as limited liability, easy compliance etc.
To know more about Company Incorporation in Lithuania, Download our “Company Formation in Lithuania”.
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Overview
Lithuania has always focused on creating a business friendly environment for companies to thrive in the European market. One such initiative is the the Startup Visa Lithuania programme which commenced in 2017, attracting people from various essential fields such as medicine, finance, and education technology. More than 60 startup founders have moved to Lithuania with their families and 61% have successfully attracted investors while in Lithuania. According to Unicorns Lithuania, the total amount of investments in startups in Lithuania in 2023 reached 272 million. In the last 5 years, the startup ecosystem in Lithuania has seen the active engagement of VCs, accelerators, angel investors, grants and the introduction of a number of support programs by the government which has made Lithuania a hub for eXtrepreneurs to access to European market. The Startup Lithuania Visa programme offers simplified migration processes, leading them to establish themselves in Lithuania over the past five years, with a range of investments from local and global venture capital funds, accelerators, angel investors, grants, and additional supportive programs.With its benefits of easy access to online banking and other online services with E-signature, lower initial capital and hiring requirements and access to a 450 million customer market, the visa offers residence in country for two years, with the possibility to renew the permit for three more years, giving ample time to eXtrepreneurs to establish and build their business in the Baltic region.
Highlights
1
The program is dedicated for a maximum of 4 founders for one startup visa application.
2
Exemption from tax for the first tax period and entitled to a reduced rate of 5% for subsequent tax periods
3
Two years residence permit, whereas many European countries offer for maximum 1 year
4
Family members are eligible to get residence permits as well
5
No restriction on age, gender or background
6
Processing time for residence permit is generally 2 months but can be fast-tracked to 1 month for a premium fee
Eligibility
A
Must be a non-EU citizen
B
Must have a business which is operating in any of the below-mentioned fields:
- Information technologies
- Biotechnologies
- Nanotechnologies
- Mechatronics
- Electronics
- Laser technologies
C
The business must be innovative and scalable
D
The business must offer an innovative solution, or at least an MVP or a prototype, along with some business traction
E
Must have sufficient funds to sustain themselves in Lithuania for 1 year
All documents and information are submitted to Startup Lithuania which is the national startup ecosystem facilitator or Enterprise Lithuania, a non-profit government agency under the Ministry of Economy and Innovation.
Note: After receiving the Temporary Residence Permit, the eXtrepreneur must officially establish their business within 120 days and inform the Startup Lithuania team within 3 days of the incorporation.
Renewal
Initially, the Temporary Residence Permit (TRP) was granted for one year, however from August 2023, Startup Lithuania has extended the initial TRP duration to 2 years with an option of extension up to 5 years.
A founder can apply for ‘amendment’ of their TRP after fulfilling the following conditions:
- Must receive a letter from Startup Lithuania or Enterprise Lithuania affirming that the business is associated with the implementation of new technologies or other significant novelties and that the eXtrepreneur has the necessary qualification, financing, business plan, etc. to support the continuation of the business. It must also provide that the founder’s stay is necessary in Lithuania for continued growth of the startup.
- Proof of settlement funds for entire duration of TRP or at least 1 year;
- Undertaking from the founder declaring their place of residence will not be less than 7 square metres;
In case one has already applied for a change in the TRP twice, they will have to get a letter from “Enterprise Lithuania” has attracted an investment of at least 30,000 EUR.
Once the application is submitted to Startup Lithuania or Enterprise Lithuania, it is reviewed by the Startup Visa Committee. After receiving the letter of confirmation, one can apply for renewal via MIGRIS (Lithuanian Migration Information System).
Note: Application for renewal must be submitted at least 1 working day before expiry of validity of existing TRP, but not before 4 months before such expiry.
Permanent Status
An eXtrepreneur, after living continuously for 5 years (wherein a trip abroad cannot last for more than 6 months at a stretch, and cannot be more than 10 months in a consecutive in the total period of 5 years) the founder (non-EU Citizen) can apply for a long-term residence permit after fulfilling the following conditions:
- A Temporary Residence Permit
- Demonstrate proficiency in the Lithuanian language and basic Constitutional knowledge. (Can be waived if documents proving above-mentioned residency criteria are submitted);
- Certificate of the enterprise and an employment contract;
- Proof of sufficient means of subsistence;
The application must be submitted via MIGRIS, within 4 months of which the applicant has to apply for a PR in person along with biometrics and necessary documents.
Generally a PR is issued within 3 months and sometimes, in urgent cases, within 45 days.
Process and Timelines
Overview
Highlights
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Eligibility
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Renewal
Permanent Status
Process and Timelines
Overview
Highlights
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Eligibility
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Renewal
Permanent Status
Process and Timelines
European Business Expansion & Mobility for Founders
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