Doing Business with Lithuania

Exporting to Lithuania involves understanding the local market, regulatory requirements, and EU trade policies. Below is a step-by-step guide:

1. Conduct Market Research

• Analyze demand for your product in Lithuania, focusing on key sectors like technology, manufacturing, agriculture, and services.
• Understand Lithuanian consumer preferences and identify potential competitors.
• Leverage Lithuania’s strategic position as a gateway to the Baltic region and the European Union.

2. Verify Product Compliance

• Lithuania follows European Union (EU) regulations for imports. Ensure your product complies with EU standards, such as CE marking for electronics or REACH compliance for chemicals.
• Certain product categories (e.g., food, pharmaceuticals, or medical devices) may require additional certifications or permits.
• Contact the Lithuanian Customs Department or relevant EU regulatory bodies for detailed guidance.

3. Understand Tariffs and Taxes

• As a member of the EU, Lithuania applies the EU Common External Tariff (CET) to goods from non-EU countries.
• Products from EU countries or those with preferential trade agreements may benefit from reduced or zero tariffs.
• A Value-Added Tax (VAT) of 21% applies to most imported goods, with reduced rates for specific products like books or medical supplies.

4. Arrange Logistics and Shipping

• Lithuania has a well-developed logistics network, including the Port of Klaipėda, a key maritime gateway.
• Work with experienced freight forwarders to handle transportation.
• Ensure all shipping documents, such as the Bill of Lading or Airway Bill, are complete and accurate.

5. Prepare Documentation

Ensure the following documents are in order:

• Commercial Invoice: Provides details about the goods, pricing, and terms of sale.
• Packing List: Lists all items in the shipment.
• Certificate of Origin: Confirms the origin of the goods and may help qualify for preferential tariffs.
• Bill of Lading: Proof of shipment issued by the carrier.
• Customs Declaration: Required for customs clearance.
• Any necessary permits or certifications based on the product type.

6. Customs Clearance

• Work with a licensed customs agent to manage the clearance process.
• Lithuania uses the EU’s TARIC database to classify goods and determine import duties.
• Pay applicable tariffs, VAT, and other fees.

7. Distribution and Sales in Lithuania

• Establish partnerships with local distributors, wholesalers, or retailers.
• Explore e-commerce platforms to reach Lithuanian consumers.
• Build relationships with local business organizations and participate in trade fairs to expand your network.

Key Contacts

• Lithuanian Customs Department
  • Website: www.lrmuitine.lt
• Enterprise Lithuania (Export and Trade Promotion)
  • Website: www.enterpriselithuania.com
• European Union Trade Helpdesk
  • Website: trade.ec.europa.eu/tradehelp/

Importing goods into Lithuania requires compliance with European Union (EU) regulations and local procedures. Below is a detailed guide:

1. Register Your Business

• Ensure your business is registered in Lithuania or your home country.
• Foreign companies may need to establish a branch or partner with a local business to facilitate operations in Lithuania.
• Obtain a VAT registration number if you plan to handle taxable goods within the EU.

2. Verify Import Regulations

• Lithuania follows EU import regulations. Ensure your goods meet EU standards for safety, health, and environmental compliance.
• Certain categories (e.g., food, pharmaceuticals, or chemicals) may require additional certifications or permits.
• Contact Lithuanian Customs or the European Commission for guidance on specific regulations.

3. Classify Your Goods

• Use the Harmonized System (HS) codes to classify your goods.
• Accurate classification is essential for determining applicable tariffs, taxes, and compliance requirements.
• Consult the EU’s TARIC database to identify the correct customs duties and procedures.

4. Check Tariffs and Taxes

• Lithuania, as an EU member, applies the EU Common External Tariff (CET) for goods imported from non-EU countries.
• Products originating from countries with preferential trade agreements may benefit from reduced or zero tariffs.
• A Value-Added Tax (VAT) of 21% applies to most imported goods, with reduced rates for specific products (e.g., books, medical supplies).

5. Obtain Necessary Licenses and Permits

• Check if your goods require special permits or certifications (e.g., for restricted items like chemicals, firearms, or medical devices).
• Apply for permits through Lithuanian or EU regulatory authorities before importing.

6. Arrange Logistics and Shipping

• Lithuania has an efficient logistics network, including the Port of Klaipėda, the largest port in the Baltic region.
• Work with experienced freight forwarders or logistics companies familiar with EU trade requirements.
• Ensure all shipping documents (e.g., bill of lading, commercial invoices) are complete and accurate.

7. Prepare Import Documentation

Ensure the following documents are in order:

• Commercial Invoice: Details goods, pricing, and terms of sale.
• Packing List: Lists the shipment contents.
• Bill of Lading or Airway Bill: Proof of shipment issued by the carrier.
• Certificate of Origin: Required for preferential trade agreements.
• Customs Declaration: Submitted through the EU’s Automated Export System (AES).
• Any additional permits or licenses required for specific goods.

8. Customs Clearance

• Submit your customs declaration through Lithuania’s electronic customs system or the EU’s Customs Decision System (CDS).
• Work with a licensed customs broker to navigate the clearance process.
• Pay applicable import duties, VAT, and any other required fees.
• Be prepared for possible inspections by customs authorities.

9. Receive and Distribute Goods

• Arrange for the delivery of goods to your destination after customs clearance.
• Establish distribution networks in Lithuania, such as wholesalers, retailers, or local agents.
• Use Lithuania’s well-developed infrastructure to access other EU markets if needed.

Key Contacts

• Lithuanian Customs Department
  • Website: www.lrmuitine.lt
• Enterprise Lithuania (Trade and Investment Support)
  • Website: www.enterpriselithuania.com
• European Union Trade Helpdesk
  • Website: trade.ec.europa.eu/tradehelp

Incorporating a company in Lithuania involves several steps to ensure compliance with local laws and EU regulations. Here’s a detailed guide:

1. Choose a Business Structure

Decide on the type of company you want to establish, such as:

• Private Limited Liability Company (UAB): The most common type for small and medium-sized businesses.
• Public Limited Liability Company (AB): Suitable for larger enterprises with publicly traded shares.
• Sole Proprietorship (IĮ): For individual entrepreneurs.
• Branch or Representative Office: For foreign companies expanding to Lithuania.

2. Register a Company Name

• Check the availability of your desired company name with the Lithuanian Register of Legal Entities.
• Reserve the name to ensure exclusivity during the incorporation process.

3. Prepare Incorporation Documents

Draft the required documents, including:

• Articles of Association: Defining the company’s goals, share capital, and governance structure.
• Identification documents for shareholders and directors (e.g., passports or national IDs).
• Proof of the company’s registered address in Lithuania.

4. Open a Bank Account

• Open a temporary corporate bank account in Lithuania.
• Deposit the minimum share capital:
  • UAB: Minimum requirement is €2,500.
  • AB: Minimum requirement is €25,000.
• Obtain proof of the deposit from the bank to include in your application.

5. Submit Incorporation Application

• File the application with the Register of Legal Entities at the State Enterprise Centre of Registers. Submit the following:
  • Articles of Association.
  • Proof of share capital deposit from the bank.
  • Identification documents for shareholders and directors.
  • Application form provided by the Centre of Registers.

6. Register for Taxation

• Register your company with the State Tax Inspectorate (VMI) to obtain a Tax Identification Number (TIN).
• If applicable, register for Value-Added Tax (VAT) (mandatory if your annual turnover exceeds €45,000).

7. Obtain Necessary Licenses

Depending on your business sector, you may need additional permits or licenses, such as:

• Construction: Requires permits from local municipalities or the State Territorial Planning and Construction Inspectorate.
• Pharmaceuticals: Requires approval from the State Medicines Control Agency.
• Consult the Lithuanian Business Gateway for guidance on industry-specific requirements.

8. Costs

• Company Registration Fees: €57 to €290, depending on company type and the speed of registration.
• Notary Fees: If applicable, for verifying documents.
• Legal Assistance: Optional, but hiring a local lawyer or consultant can streamline the process.

9. After Incorporation

• Open a permanent corporate bank account for business transactions.
• Ensure compliance with employment laws if hiring local staff.
• Join business networks such as Invest Lithuania or the Lithuanian Chamber of Commerce to explore opportunities.

Key Contacts

• Register of Legal Entities
  • Website: www.registrucentras.lt
• State Tax Inspectorate (VMI)
  • Website: www.vmi.lt
• Invest Lithuania (Investment Promotion Agency)
  • Website: www.investlithuania.com

Setting up a manufacturing plant in Lithuania involves several steps to leverage the country’s favorable business environment, skilled workforce, and access to the European Union market. Here’s a detailed guide:

1. Conduct Market Research

• Analyze local and EU demand, industry trends, and target markets.
• Evaluate competitors and supply chain logistics.
• Identify sectors with growth potential in Lithuania, such as:
  • Electronics and machinery manufacturing.
  • Food and beverage processing.
  • Renewable energy technology.
  • Furniture and wood products.

2. Choose a Suitable Location

• Lithuania offers several industrial zones and free economic zones (FEZs) with excellent infrastructure and tax incentives, such as:
  • Kaunas Free Economic Zone: Ideal for logistics and manufacturing.
  • Klaipėda Free Economic Zone: Proximity to the Port of Klaipėda for export-oriented businesses.
  • Vilnius Region: Access to a skilled workforce and vibrant business ecosystem.
• Evaluate proximity to ports, highways, and workforce availability.

3. Register Your Business

• Incorporate your company through the Register of Legal Entities at the State Enterprise Centre of Registers.
• Choose a suitable business structure, such as:
  • Private Limited Liability Company (UAB) – Most common for manufacturing.
  • Public Limited Liability Company (AB) – For larger enterprises.
  • Branch Office – For foreign companies seeking to expand into Lithuania.

4. Obtain Necessary Permits

• Apply for construction, environmental, and operational permits as required by Lithuanian law.
• Contact Lithuania’s Environmental Protection Agency for environmental compliance.
• Ensure compliance with labor, safety, and zoning regulations.

5. Secure Financing

• Explore funding options through local banks or international organizations, such as:
  • European Investment Bank (EIB).
  • EU Structural Funds for business development in Lithuania.
  • Invest Lithuania incentives for foreign investors.
• Investigate government grants and tax exemptions available for manufacturing in free economic zones.

6. Design and Construct the Facility

• Hire local architects and contractors experienced with Lithuanian regulations.
• Ensure compliance with building codes, safety standards, and environmental laws.
• Work with local authorities to streamline construction and infrastructure development.

7. Install Equipment and Machinery

• Import necessary machinery, ensuring compliance with EU and Lithuanian standards.
• Work with Lithuanian Customs for smooth importation.
• Verify if your equipment qualifies for reduced tariffs or exemptions under EU trade agreements.

8. Recruit and Train Staff

• Lithuania has a highly skilled and multilingual workforce with strengths in engineering, IT, and manufacturing.
• Partner with local universities, technical schools, or employment agencies to hire skilled workers.
• Provide training to ensure employees meet international quality and safety standards.

9. Register for Taxation

• Register your business with the State Tax Inspectorate (VMI) to obtain a Tax Identification Number (TIN).
• Tax rates in Lithuania:
  • Corporate Tax: 15% (lower rates available for small businesses).
  • VAT: 21%.
  • Special incentives and tax exemptions are available in free economic zones.

10. Begin Operations

• Test your production line and ensure all systems meet quality and efficiency standards.
• Implement quality control measures to comply with EU and international standards.
• Market your products locally and internationally, leveraging Lithuania’s access to the EU single market and strategic position in the Baltic region.

Key Contacts

• Invest Lithuania (Investment Promotion Agency)
  • Website: www.investlithuania.com
• Lithuanian Customs Department
  • Website: www.lrmuitine.lt
• State Tax Inspectorate (VMI)
  • Website: www.vmi.lt
• Lithuanian Environmental Protection Agency
  • Website: www.gamta.lt

Registering a trademark in Lithuania ensures legal protection and grants exclusive rights to your brand. Lithuania, as a member of the European Union, follows both national and EU-wide trademark registration procedures. Here’s a detailed guide:

1. Conduct a Trademark Search

• Check if your trademark is available and not already registered.
• Use the Lithuanian State Patent Bureau (SPB) database for national trademarks: www.vpb.lt.
• For EU-wide trademarks, use the European Union Intellectual Property Office (EUIPO) database: www.euipo.europa.eu.
• Ensure your trademark is unique and does not infringe on existing rights.

2. Choose Registration Scope

• National Trademark: Protects your trademark within Lithuania.
• EU Trademark (EUTM): Provides protection in all EU member states, including Lithuania.
• International Trademark: If you want protection beyond Lithuania or the EU, register through the Madrid System via the World Intellectual Property Organization (WIPO).

3. Prepare Your Application

Gather the necessary information for your application:

• Trademark Representation: A clear depiction of your logo, wordmark, or symbol.
• Classification of Goods/Services: Based on the Nice Classification system, specify the classes your trademark will cover.
• Applicant Details: Name, address, and contact details of the individual or company applying.
• Ensure your trademark complies with Lithuanian and EU legal requirements (e.g., it must not be generic, misleading, or offensive).

4. File Your Application

• For National Registration: Submit your application to the Lithuanian State Patent Bureau (SPB) either online or in person.
  Website: www.vpb.lt.
• For EU Trademark Registration: File your application with the EUIPO via their online portal.
  Website: www.euipo.europa.eu.
• For International Registration: Submit your application through the WIPO Madrid System, specifying Lithuania or the EU in your application.
  Website: www.wipo.int.

5. Pay the Application Fee

• Fees vary based on the scope and number of classes:
  • National Trademark: Starting from €180 for one class (additional fees for extra classes).
  • EU Trademark: €850 for one class, €50 for the second class, and €150 for each additional class.
  • International Trademark: Fees depend on the number of designated countries.

6. Examination Process

• The relevant authority (SPB, EUIPO, or WIPO) examines your application for compliance with legal requirements and potential conflicts with existing trademarks.
• Respond promptly to objections or requests for additional information, if any.

7. Publication and Opposition

• If approved, your trademark is published in the relevant trademark bulletin:
  • SPB Bulletin for national trademarks.
  • EUIPO Bulletin for EU trademarks.
• Third parties have a chance to oppose the registration:
  • National Registration: Opposition period is 3 months.
  • EU Trademark: Opposition period is also 3 months.

8. Registration and Certification

• If no oppositions arise or all oppositions are resolved, the trademark is registered.
• You will receive a Certificate of Registration, granting you exclusive rights to the trademark in the chosen jurisdiction (Lithuania, EU, or internationally).

9. Maintain and Renew the Trademark

• Trademarks are valid for 10 years from the registration date.
• Renew your trademark before expiration to maintain protection (renewal is also valid for 10 years).
• Submit renewal applications to the SPB, EUIPO, or WIPO, depending on the registration scope.

Costs

• National Trademark: Starts from €180 for one class.
• EU Trademark (EUTM): €850 for one class.
• International Trademark: Fees depend on the number of countries and classes selected.

Key Contacts

• Lithuanian State Patent Bureau (SPB):
  • Website: www.vpb.lt
• European Union Intellectual Property Office (EUIPO):
  • Website: www.euipo.europa.eu
• World Intellectual Property Organization (WIPO):
  • Website: www.wipo.int

Resolving commercial disputes in Lithuania involves several steps and options, depending on the nature of the conflict and the parties’ preferences. Below is a guide to help navigate the process:

1. Attempt Negotiation

• Begin by negotiating directly with the other party to reach a mutual agreement.
• This method is cost-effective, quick, and helps preserve business relationships.
• Draft a written agreement if a resolution is reached during negotiations.

2. Mediation

• Mediation is a voluntary and confidential process where a neutral mediator helps the parties find a solution.
• Lithuania supports mediation under the Law on Conciliatory Mediation in Civil Disputes.
• Mediators can be selected from the list maintained by the Lithuanian Chamber of Commerce, Industry, and Crafts or other private mediation services.
• Mediation agreements can be made legally binding if approved by a court.

3. Arbitration

• Arbitration is a popular method for resolving commercial disputes in Lithuania, especially for international or complex cases.
• Arbitration agreements must be included in the initial contract or agreed upon by the parties.
• Disputes are resolved under the Vilnius Court of Commercial Arbitration (VCCA) or other arbitration centers.
• The arbitration process is faster and more flexible than court proceedings, and the decision is final and binding.
• Lithuania is a signatory to the New York Convention, ensuring arbitration awards are recognized internationally.

4. Seek Legal Advice

• Consult with a lawyer specializing in Lithuanian commercial law.
• A legal expert can evaluate the case, draft necessary documentation, and represent you in mediation, arbitration, or litigation.
• Lawyers can also ensure that contracts or agreements adhere to Lithuanian and EU law, preventing future disputes.

5. File a Lawsuit

• If negotiation, mediation, or arbitration fail, disputes can be resolved through litigation in Lithuanian courts.
• File a lawsuit at the Regional Court or District Court, depending on the value and complexity of the claim.
• Commercial disputes are typically handled under the Civil Procedure Code of Lithuania.

6. Court Proceedings

Prepare for the legal process, which includes:

• Filing a Claim: Submit a complaint outlining the nature of the dispute, evidence, and requested relief.
• Pre-Trial Proceedings: The court may require the parties to explore settlement options.
• Hearings and Evidence: Present arguments, witnesses, and evidence during court hearings.
• Judgment: The court will issue a legally binding decision based on Lithuanian law and EU regulations.

7. Judgment and Enforcement

• If the court rules in your favor, the judgment can be enforced through legal channels.
• Enforcement is managed by bailiffs under Lithuanian law.
• For cross-border disputes, Lithuania follows EU regulations on the recognition and enforcement of judgments, such as the Brussels I Regulation.

8. Costs

• Mediation Fees: Depending on the mediator and complexity, fees vary. Mediation is generally less expensive than litigation.
• Arbitration Fees: Vary based on the arbitration center and the value of the dispute.
• Court Filing Fees: Depend on the claim’s value. For example:
  • Claims up to €30,000: 3% of the claim amount.
  • Claims exceeding €30,000: Reduced percentage.
• Legal Fees: Depend on the lawyer’s expertise, the complexity of the case, and the length of the proceedings.

Key Contacts

• Vilnius Court of Commercial Arbitration (VCCA):
  • Website: www.arbitrazas.lt
• Lithuanian Chamber of Commerce, Industry, and Crafts: Provides mediation and business support.
  • Website: www.chambers.lt
• Lithuanian Courts: Information on filing lawsuits and court locations.
  • Website: www.teismai.lt
• European Consumer Centre Lithuania: For cross-border disputes within the EU.
  • Website: www.ecc.lt

When planning to do business in Lithuania, it’s essential to consider various social, cultural, political, and economic factors that may influence operations. Below is an overview of key insights:

Social and Cultural Factors

• Language and Communication
  • The official language is Lithuanian, but English is widely spoken, especially in business and government sectors.
  • Russian and Polish are also spoken by minority groups.
  • Clear and direct communication is appreciated, and professionalism is highly valued in business interactions.
• Business Etiquette
  • Punctuality is crucial in Lithuania; being late is considered disrespectful.
  • Business meetings are formal, and initial interactions often include polite pleasantries before discussing business.
  • Handshakes are the standard greeting, and using titles and last names shows respect.

Political Environment

• Government Structure
  • Lithuania is a stable parliamentary democracy and a full member of the European Union (EU) and NATO.
  • The government actively encourages foreign investment, particularly in technology, manufacturing, renewable energy, and logistics.
• Regulatory Environment
  • Lithuania has a transparent and investor-friendly regulatory framework.
  • The country ranks favorably in the Ease of Doing Business Index due to its streamlined processes for starting businesses and obtaining permits.
  • Foreign investors receive equal treatment under Lithuanian law.

Economic and Foreign Exchange Factors

• Currency
  • Lithuania uses the Euro (EUR), providing a stable and predictable currency environment.
  • As part of the Eurozone, Lithuania benefits from seamless trade within EU markets.
• Investment Incentives
  • Lithuania offers incentives for foreign investors, including:
    • Tax benefits in Free Economic Zones (FEZs), such as corporate tax exemptions for up to 10 years.
    • EU funding for innovation, research, and development projects.
    • Support for renewable energy and sustainable development projects.
• Trade and Logistics
  • Lithuania is strategically located as a gateway between Western Europe, the Baltic States, and Russia, with access to key trade routes.
  • The Port of Klaipėda is a major logistics hub for exports and imports.

Rule of Law

• Legal System
  • Lithuania’s legal system is based on civil law, harmonized with EU regulations.
  • Foreign businesses benefit from a predictable legal environment and strong enforcement of contracts.
• Property Rights
  • Property rights are well-protected, and foreign investors can own real estate and other assets in Lithuania without restrictions.
• Dispute Resolution
  • Lithuania provides access to effective dispute resolution mechanisms, including mediation, arbitration, and courts.
  • Arbitration cases can be handled by the Vilnius Court of Commercial Arbitration.

Infrastructure

• Transportation and Logistics
  • Lithuania has a modern and efficient transportation network, including:
    • Roads and Highways: Well-developed connections to EU markets.
    • Railways: Part of the Rail Baltica project, linking the Baltic States with Western Europe.
    • Port of Klaipėda: A deep-water port with access to global shipping routes.
    • Airports: Major international hub at Vilnius Airport.
• Telecommunications and Technology
  • Lithuania has one of the fastest and most reliable internet networks in the world.
  • The country is a leader in fintech and digital innovation, with a supportive ecosystem for startups.

Relevant Information for Investors

• Taxes
  • Corporate Tax: 15% (reduced rates for small businesses).
  • Value-Added Tax (VAT): 21%.
  • Tax incentives are available for businesses operating in Free Economic Zones and sectors like research and development.
• Labor Market
  • Lithuania has a highly skilled and multilingual workforce, particularly in IT, engineering, and manufacturing.
  • Labor costs are competitive compared to Western European countries.
  • Labor laws comply with EU standards, ensuring worker protections and employer obligations.

Additional Resources

• Invest Lithuania (Investment Promotion Agency):
  • Website: www.investlithuania.com
• Lithuanian Chamber of Commerce, Industry, and Crafts:
  • Website: www.chambers.lt
• State Tax Inspectorate (VMI):
  • Website: www.vmi.lt
• Vilnius Court of Commercial Arbitration:
  • Website: www.arbitrazas.lt