Establish a Branch in Lithuania

Updated on Tuesday 08th January 2019

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Branch in Lithuania.jpgForeign companies willing to perform business in the largest state in the Baltic region may open a limited form of business called a branch office. Although the permission for many actions must be received from the parent company, many entrepreneurs choose this form of business because of the small costs of registration and administration. This is because the Lithuanian branch office is dependent on the parent company and must undertake the same commercial activities as the foreign business.

Below our company formation agents in Lithuania explain how to set up a branch office in this country.

Features of the Lithuanian branch office

A branch established in Lithuania is not considered a legal entity and its assets are not separated from the foreign company’s assets. The full liability for its actions is taken by the parent company. If the parent company is in process of liquidation, the assets of the branch are also subject to seizure.

No permit is necessary before opening a branch but in certain domains, licenses are required such as in banking, insurance, investments, restaurants, telecommunication, etc.

Steps to register a branch in Lithuania

Before registration of a branch in Lithuania, a bank account must be opened (if in the future the branch will perform financial operations) but no minimal capital is requested.

Also, a representative must be appointed in order to take the daily decisions and connect the branch with the foreign company.

The registration of the branch in the Company Registrar is mandatory as it is for every form of business performed in LithuaniaThe main difference between the local companies and the branches at registration are the documents submitted.

A branch must submit a standard application which contains the name of the foreign company and its registered address, the proof of existence in the foreign country, the name of the directors and their personal details, the decision of opening a branch, the decision of appointing a branch’s representative, the powers owned by this representative, the address of the branch, the passport copies of the representative.

The bellow documents must also be included in the application and must be notarized in the country of origin: the certificate of registration, the foundation deeds and the minute of the meeting where the decision of opening a branch was taken.

Accounting requirements for branch offices in Lithuania

Even if the parent company is liable for the Lithuanian branch office’s debts and obligations, being registered in this country also implies certain accounting requirements for the local legal entity.

From an accounting point of view, a branch office in Lithuania must:

  • - register for tax and VAT purposes (VAT registration is different for branch offices of EU and non-EU companies);
  • - the branch must file monthly VAT returns with the Lithuanian tax authorities;
  • - the parent company must submit annual tax returns on behalf of the branch office;
  • - all accounting must comply with the regulations applied in the home country of the parent company.

Common questions about opening a branch office in Lithuania

Foreign companies interested in setting up a branch office in Lithuania usually have the following questions:

  1. Why should we choose a branch office over a subsidiary company?

The branch office is easier and cheaper to establish than a subsidiary. Also, the parent company will have a greater control over than branch compared to the subsidiary.

  1. Must the branch office have a local address in Lithuania?

Yes, a legal address is a mandatory requirement for opening a branch office in Lithuania.

  1. Must the branch have a local director?

Yes, having a local representative is another requirement for opening a branch office in Lithuania.

  1. Are there any share capital requirements for opening a branch office in Lithuania?

No, the law does not impose any minimum amount of money to establish such entity.

  1. How long does it take to register a branch office in Lithuania?

There is no minimum timeframe for setting up a branch office, as the process depends on how soon the documents related to its registration are ready.

 

If you have any other questions or simply need assistance in setting up a branch office, please contact our company registration advisors in Lithuania.

 

 

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