Lithuania, strategically located at the crossroads of Europe, offers opportunities for investors and entrepreneurs seeking a gateway to the European Union. Known for its dynamic economy, business-friendly policies, and robust infrastructure, Lithuania is an appealing destination for those aiming to establish a foothold in the European market.
For investors, understanding the residency options available in Lithuania is a critical step toward leveraging the country’s economic advantages and exploring business opportunities. Lithuania’s Residency by Investment program not only provides a streamlined path to European residency but also grants access to the numerous benefits associated with living and working in the EU. From expanding business operations to securing a stable future for families, Lithuania’s RBI program is a comprehensive solution for global entrepreneurs.
With a minimum investment requirement as low as EUR 14,000, the program offers a fast-track process to secure a Temporary Residence Permit in under two months. Applicants must establish or invest in a Lithuanian business, actively participate in its operations, and meet specific financial and employment conditions.
The program also opens doors to long-term residency and citizenship, offering a clear progression from temporary residency to permanent status in just five years, and citizenship after ten years. Family members, including spouses and dependents, can be included, enabling families to enjoy Lithuania’s high-quality education, healthcare, and social benefits.
Benefits of Lithuania’s Residency by Investment Program
Ease of Doing Business
Ranked 11th among 190 economies in the World Bank’s ease of doing business index, Lithuania boasts a regulatory environment that facilitates smooth business operations. Investors benefit from simplified incorporation processes and efficient administrative systems, ensuring a seamless entry into the market.
Low Corporate Tax Rates
Lithuania offers one of the lowest corporate tax rates in the EU, ranging from 5% to 15%. This competitive tax regime allows businesses to maximize profitability while operating in a stable economic environment. Compared to other EU countries, Lithuania's tax rates and business-friendly policies provide significant advantages for investors.
Fast-Track Residency Process
Investors can obtain a Temporary Residence Permit in under two months. This expedited process ensures that individuals can quickly access the full spectrum of benefits offered by residency in Lithuania, including freedom of movement within the EU Schengen zone.
Path to Permanent Residency and Citizenship
Lithuania’s RBI program provides a clear pathway to long-term residency and citizenship. After maintaining a temporary residence for five years, individuals become eligible to apply for permanent residency. An additional five years of continuous residence opens the door to Lithuanian citizenship, granting full EU citizenship rights.
Family Reunification Benefits
Residency in Lithuania extends to family members, including spouses, registered partners, and dependent children or parents. Family reunification is possible once the primary applicant secures their TRP, enabling families to enjoy the educational, healthcare, and social security benefits of living in the EU.
Relatively Low Investment Requirements
Lithuania’s RBI program is among the most cost-effective options in the EU. With a minimum investment threshold as low as EUR 14,000 for business incorporation, the program is accessible to a wide range of investors. This affordability, combined with Lithuania’s favorable business climate, makes it an attractive option for entrepreneurs seeking European residency.
Business Registration and Investment Requirements
Incorporating a Company in Lithuania
Setting up a business in Lithuania is a streamlined process, designed to attract international entrepreneurs and investors. The incorporation of a private limited liability company (UAB) involves the following steps:
General Incorporation Steps
Verifying the Company Name: Ensuring the chosen name is available and complies with Lithuanian naming regulations.
Preparing and Signing Documents: Drafting incorporation documents and obtaining the necessary signatures. A Lithuanian mobile qualified electronic signature or physical signatures may be required.
Opening a Temporary Bank Account: Establishing a bank account exclusively for forming share capital, with a minimum required amount of EUR 1,000.
Completing Incorporation: Formalizing the process with a local notary and registering the company with the Commercial Registry.
Post-Incorporation Steps
Registering Shareholders and UBO Information: Recording the ownership details with the Lithuanian UBO (Ultimate Beneficial Owner) Registry.
CEO Employment Contracts: Drafting and signing employment agreements in compliance with Lithuanian labor law.
VAT Registration and Accounting Setup: Completing VAT registration and engaging an accountant or accounting firm to manage ongoing compliance and financial reporting.
National Visa for Investors
Lithuania offers a one-year national visa for investors, allowing them to establish a business presence in the country.
Key Eligibility Criteria
Minimum Investment: At least EUR 14,000 in a company.
Business Activity: Active participation in lawful business operations in Lithuania.
Company Equity Value: The company must have an equity value of at least EUR 28,000, with the investor’s share constituting a minimum of EUR 14,000.
Application Process
Investors must submit their national visa application through the Lithuanian Migration Information System (MIGRIS). The process involves:
Filling out the visa application form online and uploading the required documents, including proof of business ownership and investment.
Scheduling an in-person appointment to provide biometric data and submit original documents.
Paying the application fee (EUR 140).
A decision is typically made within 15 calendar days, although processing may take up to 45 days in certain cases.
Temporary Residence Permit (TRP)
For long-term residency, a Temporary Residence Permit (TRP) is the next step after establishing a business in Lithuania.
Conditions for Eligibility
Business Operational Period: The company must have been operational for at least six months, adhering to its business plan.
Employment Requirements: The business must employ EU/EEA citizens or Lithuanian permanent residents, with each employee receiving a monthly salary of at least twice the national average wage (the average currently EUR 2,238)
Equity Value: The company’s equity value must total at least EUR 28,000, with a minimum personal investment of EUR 14,000.
Application Process
Submit the TRP application electronically via MIGRIS, including supporting documents such as a business plan, financial statements, proof of business activity, and employee contracts.
Schedule a visit to a Migration Department office to provide biometric data and submit original documents.
Pay the applicable fee (EUR 160 for the general procedure or EUR 320 for urgent processing).
Decisions on TRP applications are typically made within three months (or 45 calendar days for urgent cases). A TRP is granted for two years and is renewable, provided the business continues to meet the program’s requirements.
Living and Business Commitments
To maintain residency, the following commitments are required:
Residence in Lithuania: While travel within the EU is permitted, the principal place of residence must remain in Lithuania.
Long-term Business Operations: The business must remain operational and adhere to program requirements, including hiring and paying EU/EEA citizens or Lithuanian permanent residents.
Employment Obligations: Companies must employ at least one or two locals.
Family Inclusion Options
Lithuania’s Residency by Investment program ensures that investors can bring their families to enjoy the same benefits of living in a European Union country.
Eligibility for Family Members
Family members eligible for inclusion in the residency process include:
Spouses or registered partners.
Dependent children, including minors and adult children financially reliant on the applicant.
Dependent parents, provided they have been financially supported by the applicant for at least one year and cannot receive similar support from other family members abroad.
Application Process for Family Members
Family members can apply for a Temporary Residence Permit (TRP) alongside the primary applicant, simplifying the process. Key steps include:
Simultaneous TRP Application: Family members submit their residency applications at the same time as the investor, reducing administrative delays.
Required Documents:
Proof of familial relationship (e.g., marriage or birth certificates).
Evidence of dependency for adult children or parents.
Health insurance coverage for all applicants.
Family members' TRPs are granted based on the validity of the primary applicant’s residency permit, ensuring synchronized renewal cycles.
Taxation and Residency Obligations
Residency in Lithuania brings certain tax obligations and compliance requirements. The country’s tax system is designed to be competitive while ensuring transparency for residents and businesses.
Personal Income Tax (PIT)
Lithuania’s personal income tax system applies the following rates:
20% for annual income up to EUR 114,162.
32% for income exceeding this threshold.
Dividends and other types of passive income, such as royalties and capital gains, are generally taxed at 15%, with higher rates for larger amounts.
Residency Criteria for Taxation:
An individual is considered a tax resident if they:
Have a permanent residence in Lithuania, or
Stay in Lithuania for at least 183 days within a tax year.
Non-residents are taxed only on income sourced within Lithuania.
Corporate Income Tax (CIT)
Lithuania offers one of the most favorable corporate tax environments in the EU:
Standard CIT Rate: 15%.
Reduced Rates: 5% or 0% for qualifying small businesses and start-ups.
Resident companies are taxed on their worldwide income, while non-resident companies are only taxed on income earned in Lithuania.
Path to Permanent Residency and Citizenship
Lithuania’s Residency by Investment program provides a pathway to long-term residency and, eventually, EU citizenship. By fulfilling specific requirements over time, investors can secure their permanent status in Lithuania and enjoy all the benefits of being a European resident or citizen.
Permanent Residency
Eligibility Requirements
Investors who have held a Temporary Residence Permit for five consecutive years are eligible to apply for permanent residency. During this period, applicants must demonstrate compliance with the residency program requirements and maintain their business operations in Lithuania.
Application Process and Required Documents
To apply for permanent residency, applicants must submit a written application through the Lithuanian Migration Information System (MIGRIS) along with the following documents:
- Proof of five years of continuous residence under a TRP.
- Evidence of sufficient financial means to support themselves and any dependents.
- Valid health insurance coverage.
Applications are typically processed within three months, and the permanent residency permit is valid for five years.
Maintaining Residency Status and Renewal Conditions
To retain permanent residency, individuals must:
- Continue to meet the conditions for Schengen entry, including proof of financial stability and health insurance.
- Not be absent from Lithuania for more than 12 consecutive months, unless for exceptional reasons.
- Permanent residency permits can be renewed upon expiration, provided the applicant continues to meet these criteria.
Citizenship
Naturalization Requirements
Citizenship in Lithuania can be obtained after ten years of continuous residence, including five years under a permanent residency permit. Applicants must meet the following conditions:
- Language Proficiency: Demonstrate at least a B1 level in the Lithuanian language by passing an official language test.
- Constitution Test: Pass a test on the Lithuanian Constitution and legal system.
- Clean Criminal Record: Provide proof of no prior convictions.
- Integration into Society: Show evidence of participation in community activities or other indicators of societal integration.
Application Process
The naturalization process involves submitting an application through MIGRIS, along with documentation proving residence, language proficiency, and societal integration. Successful applicants gain full EU citizenship rights, including the ability to live, work, and travel freely across the European Union.
In conclusion, Lithuania presents a variety of residency options for foreign nationals through its investment programs. Prospective applicants should carefully evaluate their options to determine the best fit for their personal and financial goals. With a strategic investment and a well-prepared application, foreign nationals can secure residency in Lithuania and enjoy the myriad benefits of living in a European Union country. This residency not only provides access to the EU market but also paves the way for a potential future as a Lithuanian citizen.
Lusine Sargsyan
Attorney
