Lithuania is a small Baltic country in northeastern Europe that has become an increasingly popular destination for company establishment. The country offers a range of advantages for entrepreneurs, including a favorable tax regime, a highly educated workforce, a strategic location, and a stable political and economic environment.
Tax Rates in Lithuania
One of the most significant advantages of establishing a company in Lithuania is the favorable tax regime. The country has a flat corporate income tax rate of 15%, which is one of the lowest in the European Union. This rate applies to all profits generated by companies, regardless of their size or industry.
In addition to the low corporate tax rate, Lithuania also offers other tax incentives to companies, such as a tax exemption on profits generated from the sale of shares and profits earned by a permanent establishment abroad. The country also has an extensive network of double taxation treaties with more than 50 countries, which can help companies avoid paying taxes twice on the same income.
Another benefit of the tax regime in Lithuania is the absence of withholding taxes on dividends, interest, and royalties paid to non-residents. This makes Lithuania an attractive location for holding companies, as it allows them to receive income from their subsidiaries located in other countries without paying taxes on that income.
Banks for Account Opening
Lithuania has a well-developed banking system with both local and international banks operating in the country. Some of the most popular banks in Lithuania include SEB Bank, Swedbank, and Luminor Bank. These banks offer a range of banking services, including corporate banking, trade finance, and foreign exchange transactions.
To open a corporate bank account in Lithuania, companies must provide the necessary documentation, such as company registration documents, proof of identity of company directors and shareholders, and evidence of the company's business activities. The banks may also require information on the source of funds and the nature of the business transactions.
Other Advantages of Lithuania as a Jurisdiction for Company Establishment
Apart from the favorable tax regime and the availability of banking services, there are many other advantages to establishing a company in Lithuania. The country has a highly educated and skilled workforce, with a literacy rate of over 99%. The cost of labor is relatively low compared to other European countries, making Lithuania an attractive location for businesses looking to reduce their labor costs.
Lithuania is also strategically located at the crossroads of Europe and Asia, which makes it an ideal location for companies engaged in international trade. The country has a modern infrastructure, including two international airports, an extensive port network, and a well-developed road and rail network.
Furthermore, Lithuania has a stable political and economic environment, with a government that is committed to promoting foreign investment and business development. The country has a high standard of living, and it offers a safe and secure environment for both residents and visitors.
In conclusion, Lithuania is a highly attractive jurisdiction for company establishment. The country offers a favorable tax regime, a highly educated workforce, a strategic location, and a stable political and economic environment. These factors, combined with a well-developed banking system and modern infrastructure, make Lithuania an ideal location for entrepreneurs looking to establish a company in Europe.