LTOperating in Lithuania
Payroll, accounting, employment, immigration, entity setup, and corporate compliance managed locally through a single international coordination model.
Request a country assessmentThe regulatory landscape
Lithuania's standard corporate income tax rate rose from 16% to 17% from 1 January 2026, with the reduced rate for qualifying small companies (fewer than 10 employees, revenue under €300,000) increasing from 6% to 7%. The 0% rate for newly registered small companies was extended from one to two years in the same reform, and the employee-count condition for this startup rate was removed, broadening eligibility. The UAB, Lithuania's standard private limited company, requires €2,500 in minimum share capital with at least 25% paid up before registration.
The detail most valuable to technology and R&D-intensive companies is Lithuania's triple deduction on qualifying research and development expenditure — for every €1 spent on eligible R&D, €3 can be deducted from taxable income, among the most generous such incentives in the EU. On the employment side, social contributions are structured asymmetrically: employees contribute approximately 19.5% of gross salary (pension, sickness, health insurance combined), while employers contribute only around 1.77% on top — a markedly employee-heavy split relative to most Western European markets.
Official language
Lithuanian
Legal forms
UAB · AB
Corporate tax rate
17% standard (2026, up from 16%) · 7% for qualifying small companies · 0% for new small companies' first 2 tax periods
Currency
EUR
Employer social security
~1.77% of gross salary (Sodra) — employee side ~19.5%, a markedly asymmetric split
R&D tax incentive
300% deduction on qualifying R&D expenditure — among the EU's most generous
Minimum share capital
UAB: €2,500 (25% paid up before registration) · AB: €40,000
Integrated services in Lithuania
Each service is delivered as part of an integrated service model, coordinated across functions under a single point of accountability. Clients engage one team, not a coordination layer between independent providers.
Accounting & Tax Compliance
Statutory accounts, VAT returns, and corporate tax filings aligned with Lithuanian standards, including R&D triple-deduction documentation where applicable.
Explore Accounting & Tax CompliancePayroll & Workforce Management
Full-cycle Lithuanian payroll including Sodra social insurance contributions, the asymmetric employer-employee split, and employment terms under Lithuanian labour law.
Explore Payroll & Workforce ManagementCompany Formation & Entity Setup
UAB and AB incorporation, Centre of Registers filing, and post-formation compliance setup including small-company and startup rate eligibility assessment.
Explore Company Formation & Entity SetupWorkforce Mobility
Residence permit coordination for founders and key staff, based on active Lithuanian company operations, and work permit processing for internationally mobile employees.
Explore Workforce MobilityClient profiles in Lithuania
HR & Employment Advisory
Multinationals establishing or restructuring Lithuanian operations
Company Formation & Entity Setup
Technology and R&D-intensive companies evaluating Lithuania for its triple deduction incentive
Workforce Mobility
Companies entering Lithuania for the first time, requiring entity setup and initial compliance infrastructure
Payroll & Workforce Management
Companies already operating in Lithuania consolidating fragmented HR, payroll and accounting providers under a single governance layer
At the center of your HR operations
What clients say about our services in Lithuania
Our business plan was built on the old 16% corporate tax rate and 6% small-company rate, both of which had already changed by the time we incorporated. Catching the 2026 update before finalising our financial projections meant we didn't have to explain a tax-line discrepancy to our board a few months later.
Finance Director, Technology Group — Lithuanian OperationsInsights on Lithuania
Selected articles on regulatory developments and operational frameworks relevant to companies in Lithuania.
The rate moved from 16% to 17% and the startup 0% period was extended at the same time. Two changes that pull in opposite directions, and that most online guides still report incorrectly.
Read articleQualifying R&D expenditure can be deducted at three times its value. What actually qualifies, and how the regime applies in practice to software and technology companies.
Read articleThe two forms differ in dividend flexibility, social contribution treatment and administrative load. Which one fits a solo founder depends on how profit will be taken out.
Read articleFrequently asked questions
Questions raised most often by companies entering or operating in Lithuania.
What services does HTLC Network provide in Lithuania?
HTLC Network provides Payroll & Workforce Management, Accounting & Tax Compliance, HR & Employment Advisory, Company Formation & Entity Setup, and Workforce Mobility services in Lithuania through a coordinated international service model.
Why do international companies expand into Lithuania?
Lithuania is often selected for technology, financial services and business support operations, and for access to Baltic and European markets.
Can I hire employees in Lithuania without opening a company?
Potentially. Payroll registration, tax compliance, social insurance obligations and labour law requirements must however be assessed first.
What payroll rules apply in Lithuania?
An employer generally manages income tax withholding, social insurance contributions, employee registration procedures and payroll reporting.
What employment risks should foreign employers understand in Lithuania?
Employment contracts, dismissal procedures, working-time compliance and employee benefits obligations are the key compliance areas.
What changed with Lithuania's corporate tax rate in 2026?
The standard rate rose from 16% to 17%, and the reduced rate for qualifying small companies rose from 6% to 7%. The 0% rate for newly registered small companies was extended from one to two tax periods, and the employee-count eligibility condition for that rate was removed, broadening access for startups.
How does the 300% R&D deduction work?
For every €1 a company spends on qualifying research and development activity, €3 can be deducted from taxable income — among the most generous R&D incentives in the EU. This is available to any Lithuanian UAB regardless of whether founders are Lithuanian residents, making it particularly valuable for software and technology companies.
Why are Lithuanian employer social contributions so low?
Lithuania's Sodra social insurance system places most of the contribution burden on the employee (~19.5% of gross salary, covering pension, sickness and health insurance) rather than the employer (~1.77%). This asymmetric structure is the reverse of what employers from Western European markets typically expect, and should be communicated clearly when setting gross salary offers.
Talk to a Lithuania expert
For companies structuring a market entry or consolidating an existing Lithuanian operation under a single governance model.