New Company vs. Shelf Company in Lithuania

Updated on Thursday 07th February 2019

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New-Company-vs-Shelf-Company-in-LithuaniaLithuania is one of the most appealing small countries in Europe thanks to the young and skilled workforce and to the technological development which has helped the government to offer performant services to those interested in setting up companies here.

When it comes to opening a company in Lithuania, local and foreign investors have two important options: to set up a new company or to buy a ready-made company.

If you don’t know the right option for you, our company formation agents in Lithuania have prepared a guide on the new company versus the shelf company. We can also help you register a new company or buy a shelf company in Lithuania, based on your preferences.

Registering a new company in Lithuania

The first option a foreign investor looks into when deciding to start a business in Lithuania is the incorporation of a new company. This is because the investor can choose the best business form suited to their needs.

The company formation procedure of a new company in Lithuania implies:

  1.           drafting and notarizing the Articles of Association for the chosen legal entity;
  2.           filing these documents and other incorporation papers with the Trade Register in Lithuania;
  3.           opening a corporate bank account and depositing the share capital of the company;
  4.           appointing the managers and other officers who will represent the company;
  5.           registering the new company with the tax authorities for taxation and VAT purposes;
  6.           registering with the social security authorities for pension and insurance as an employer;
  7.           applying for specific licenses and authorization with various authorities, depending on the activities to be undertaken.

Our company registration specialists in Lithuania offer complete services if you plan on starting a new business in this country. We will help with the preparation of all the documents needed for incorporation, the opening of the bank account and filing of the paperwork with the Companies Registrar.

What does it imply to buy a shelf company in Lithuania?

Compared to registering a new company, buying a shelf company in Lithuania is a simpler and straight forward procedure which implies:

  • -          searching and choosing the right type of company, in accordance with the business needs;
  • -          preparing the transfer of the company to the new owner by signing an agreement;
  • -          drafting and signing the share transfer agreement of the purchased business form;
  • -          making the necessary amendments to the shelf company with the Trade Register.

In order to understand the differences between registering a new company and buying a shelf company in Lithuania it is important to note that shelf companies are already registered, therefore they have all the necessary documents to start operating immediately. Ready-made companies come in different forms, however, the most employed one is the private limited liability company.

Being already registered, the investor will skip the time between the incorporation and the start of the operations. Also, a shelf company has a history behind it which can be used for accessing various loans with Lithuanian credit institutions or to engage in operations with the public companies.

Our local advisors can help if you decide to purchase a ready-made company in Lithuania.

Which one is best: the new company or the shelf company in Lithuania?

Choosing between a new Lithuanian company and a shelf company is subjective, and the decision should be made after careful consideration.

The registration of a new company has various advantages, among which cheaper business set-up costs and the possibility of making all the arrangements from the beginning. Compared to it, the shelf company can be more expensive if the investor decides for a more complex business form, such as the public company. Also, the new owner will need to bring certain amendments to the purchased company.

On the other hand, the shelf has the advantage of being already registered, which means having all the paperwork at hand, including a tax identification and VAT numbers. This will allow it to start its operations sooner compared to a new company. Also, in the case of a new company the business license must be obtained before starting the activities, while in the case of a ready-made company if no license is necessary, it can start operating as soon as it is purchased.

Another stringent matter is related to the taxation of companies in Lithuania, however, there is no difference between the taxation of a new company and that of a shelf company, as they are both local companies.

If you want to open a company in Lithuania but have not decided on whether to go for a new or a ready-made one, do not hesitate to contact us for guidance and assistance in starting the activities through any of them.

Meet us in Vilnius

Call us now at (+44)203-287 0408  to set up an appointment with our lawyers in Vilnius, Lithuania. Alternatively you can incorporate your company without traveling to Lithuania.

As our client, you will beneficiate from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Lithuania.

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