Choosing the right type of business for your company is crucial. Before you choose, it’s essential you have the right advice. That’s why we’ve put together this how to guide that will take you through all you need to know.
There are two ways of doing business in Lithuania:
- Establish a company - Set up an individual activity license
The decision on the form of activities can be made based on the following criteria:
1. Nature of your business
Your decision should be dictated by what kind of business you’ll be doing, i.e. on how complex your business will be.
2. The amount of the available capital
Each business type has a required authorized capital that you will need to have. So, it makes sense to ensure that the type you choose matches the capital you have at your disposal.
As above, you’ll find that each business type carries its own tax bracket, so you need to make sure that your business will be able to support that expenditure.
4. Degree of personal liability
If you wish to limit your personal liability in the event of any business problems, you need to choose a legal entity that comes with limited liability.
5. The number of founders
If you are looking to jointly conduct business with several individuals, then you need to choose a form that allows for more than one founder.
6. The degree of complexity of business activities
If your business will be a sole individual operation with no management structure, you should choose a form that reflects that simple structure (like an individual activity license).