Akcine bendrove serves as an excellent gateway for foreign investors who want to build a substantial business presence in the Lithuanian market. This business structure lets companies trade shares on stock exchanges and requires a minimum capital of €40,000, though this might drop to €25,000 in 2023. The setup creates great opportunities to accelerate growth and attract investment.
The akcine bendrove differs from its smaller counterpart, uždaroji akcinė bendrovė (UAB), in scale and complexity. A UAB needs just €1,000 in starting capital and can’t have more than 250 shareholders. The AB structure has no such limits on shareholder numbers but demands a more sophisticated governance model with both a Board of Directors and Supervisory Board. Major Lithuanian enterprises like AB “Ignitis grupė” in energy and AB “Vilniaus baldai” in furniture manufacturing operate under this format. This piece will walk foreign investors through everything they should know about setting up and running an akcine bendrove in Lithuania.
Understanding Akcinė Bendrovė in Lithuania
The Lithuanian Akcinė Bendrovė (AB) is a joint-stock company structure that follows the Lithuanian Civil Code and Law on Companies. An AB divides its capital into shares that shareholders can buy or sell.
Lithuanian law defines an AB as a legal person with limited liability. The company’s assets stay completely separate from its shareholders’ assets. This setup provides excellent protection because shareholders are only responsible for their share payments. The company itself can only use its assets to meet its obligations.
Setting up an AB used to require €40,000 in minimum authorized capital. Recent changes have lowered this amount to €25,000. A private limited liability company (UAB) needs much less capital – just €2,500 or even as low as €1,000.
The biggest difference between these entities lies in share trading. AB shares can be traded on public stock exchanges, but UAB shares cannot unless specific laws allow it. Public ABs need a more structured governance model with at least three directors on their board. UABs can work with simpler management systems.
Each company type must use specific names. Companies must include “akcinė bendrovė” or “AB” for AB companies, while UABs must use “uždaroji akcinė bendrovė” or “UAB” in their names.
Companies must deposit at least 25% of their registered capital when they form. The company becomes a legal entity after registering with the Register of Enterprises.
Shareholders enjoy several rights:
- They can receive dividends
- They can take part in company decisions based on their share ownership
- They have access to company information
- They can vote at general meetings
Yes, it is these shareholder protections that make the AB structure perfect for large business ventures, especially those looking to attract investors from different backgrounds through public offerings.
Key Legal and Financial Requirements
Foreign investors need to understand their financial and legal obligations when setting up an akcine bendrove. The minimum share capital requirement is €40,000, though recent rules might have reduced this to €25,000. A private UAB needs only €1,000-€2,500. Both entities must deposit at least 25% of their registered capital during formation.
The AB structure attracts investors with several valuable rights despite its higher capital needs. Shareholders can receive dividends based on their share, vote on company decisions, get first pick of new shares during capital increases, and access company information. Companies can issue shares with different voting rights, but non-voting shares must stay below 50% of the total.
Public ABs must follow stricter reporting rules than private ones. Every public company needs yearly audits, while private UABs only need them under specific size conditions. Both types must submit yearly financial statements to the Register of Legal Entities. AB’s financial statements should accurately show assets, equity, liabilities, income, and spending through a balance sheet, profit and loss account, cash flow statement, equity changes statement, and detailed notes.
Lithuania’s standard corporate tax rate is 15%, and small companies might pay less at 0% or 5%. The VAT registration threshold will rise to €55,000 by 2025.
The Law on Companies has changed how shareholders access company information. The old rules gave majority shareholders full rights to confidential information, but companies can now decline requests if the information isn’t needed to comply with laws. The company’s business strategy approval now belongs to the supervisory board rather than the regular board in companies that have one.
How to Set Up an Akcinė Bendrovė as a Foreign Investor
The process of setting up an akcine bendrove in Lithuania takes about 2-3 weeks with proper documentation. The first step requires you to check and reserve your company name through the State Enterprise Center of Registers. Your reservation stays valid for 6 months.
These documents are needed to proceed:
- Articles of Association (detailing company structure, purpose, and management)
- Constituent Agreement (for multiple founders) or Constituent Act (for single founder)
- Proof of legal address in Lithuania
- Identification documents for all founders and directors
Your AB needs a minimum share capital of €40,000 in a Lithuanian bank account. You must deposit at least 25% of this capital before starting registration. A Lithuanian notary needs to verify all documents to ensure they comply with local laws.
The Register of Legal Entities usually processes your application within 3 working days after submission. Your company becomes a legal entity once you receive the registration certificate.
The next step requires you to get an official company seal and register with the State Tax Inspectorate. This needs to happen within 5 days to receive your tax identification number and VAT registration if needed.
Foreign investors enjoy the benefit of not needing a local partner. You can own 100% of your AB as a non-resident. Some procedures like opening a bank account might need your physical presence, but you can handle many steps through a power of attorney.
The registration system gives you options. You can register by visiting Lithuania yourself, authorize someone through power of attorney, or first register the company to a Lithuanian representative and transfer ownership later. This last option helps reduce bureaucratic challenges.
Conclusion
This piece has helped us get into everything about setting up an akcine bendrove in Lithuania. The business structure gives substantial advantages to foreign investors who plan larger-scale operations. A higher capital requirement of €40,000 (which could go down to €25,000) shows this entity’s sophisticated nature compared to the simpler UAB format.
What makes akcine bendrove special is its ability to trade shares on stock exchanges. This makes it perfect for businesses that want significant investment capital. The unlimited number of shareholders allows more room for growth than UABs, which cap at 250 shareholders.
Foreign investors should think about governance requirements carefully. The structure needs a Board of Directors and possibly a Supervisory Board, which means more oversight than simpler business forms. These requirements create a framework that serious investors find appealing.
The registration process is straightforward and takes 2-3 weeks in ideal conditions. Lithuania’s business-friendly environment shines through as foreign investors can keep 100% ownership without local partners.
The country’s 15% corporate tax rate stays competitive in Europe. Small companies might qualify for lower rates of 0% or 5%, based on specific conditions.
Financial reporting rules are strict but ensure EU standards compliance. This protects both the company and its investors from legal issues.
Akcine bendrove creates strong foundations for substantial business ventures in Lithuania. Companies that want to attract investors through public offerings find it particularly useful. The structure strikes a balance between protecting shareholders and maintaining corporate flexibility, which helps foreign investment flourish in a well-regulated framework.