Qualifying 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.
- Progressive personal income tax transition
- UAB vs MB structuring choice
- Should a solo founder choose a UAB or an MB?
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.
What it takes to incorporate in Lithuania. Every figure below is published on the Lithuania country page.
| Lithuania | |
|---|---|
| Legal forms | UAB · AB |
| Minimum share capital | UAB: €2,500 (25% paid up before registration) · AB: €40,000 |
| Company registry | Register of Legal Entities, via the notary-assisted or online registration route |
| Incorporation timeline | As little as 1–3 business days for a standard UAB |
| Official language | Lithuanian |
What makes it complex in Lithuania
- Progressive personal income tax transition — — moving to a three-tier 20%/25%/32% system on total income including employment, self-employment, rental and capital gains.
- UAB vs MB structuring choice — for solo founders — MB offers more flexible profit withdrawal without waiting for annual financial statement approval, but caps membership at 10 natural persons.
Should a solo founder choose a UAB or an MB?
A UAB offers more conventional limited liability structure and scales to larger operations, but dividend distributions are restricted to once per year after annual financial statement approval. An MB (small partnership, capped at 10 natural-person members) allows more flexible profit withdrawal without waiting for annual approval, often suiting solo founders or very small teams.
Progressive personal income tax transition is one of the points HTLC Network handles for clients operating in Lithuania, within a single engagement that covers every other country they operate in — executed locally, governed centrally.
In Lithuania the scope is: UAB and AB incorporation, Centre of Registers filing, and post-formation compliance setup including small-company and startup rate eligibility assessment.
See Company Formation & Entity Setup in Lithuania for the full scope, or the Lithuania country page for the statutory framework across every service.
Figures as published on the HTLC Network country pages, reviewed September 2026 and collected from public sources. They are not a substitute for advice on a specific case and should be verified before being relied on.