According to the Labour Code of Lithuania, which came into force on July 1, 2017, the parties can agree that after the termination of employment contract the employee will not compete with the employer for a certain time. However, such agreements may be concluded only with employees who have specific skills and knowledge.

Maximum period of non-competition is two years after termination of an employment agreement. During the period of non-competition, the compensation of at least 40% of his average monthly wage must be paid monthly to the former employee.

Non-competition agreement must include:
• Definition of “competition”, i.e. definition of activity or area of employment, which is prohibited to the employee;
• Compensation for non-competition;
• Non-competition territory;
• Validity term (up to 2 years).

Maximum penalty for the employee for infringing non-competition obligations is up to 3 times the size of aforementioned compensation (and the employee must return all the compensation received up to date of breach).

The employee has a right to terminate the non-competition agreement in case the employer had not paid the compensation for more then 2 months.



The main source of employment law in Lithuania is a new Labour Code, which came into force on July 1, 2017. Comparing to the old Code (and to the legislation applied in many other European countries), it liberalizes employment regulations and regulates flexible relations between the employers and employees. Among the core new developments is a simplified termination of an employment contract. Regulations on severance pay and notice period are changed.

Standard notice period entitled to an employee in case of dismissal without employee’s fault is 1 month (2 weeks – when the duration of employment is less than one year). Notice periods of 2 months is applied for the employees who are raising a child under 14 years old or who have less than 5 years remaining until the retirement age. 3-month notice period is applied to disabled people and those who have less than two years remaining until the retirement age.

Dismissed employees are entitled to a severance pay of 2 average monthly wages (only in case if they are dismissed without their fault). For employment lasting less than a year, a severance pay of 50% average monthly wage will apply.

Employer and employee may agree in written on different terms of termination of employment agreement. Employee may also terminate the employment agreement by giving a written notice 20 day in advance.

In any case, we would recommend consulting with a professional lawyer on questions concerning the termination of employment contracts.   



The application and interview processes in Lithuania are similar to those used in the UK, Ireland, Scandinavia and other European countries. A CV and covering letter is also a norm.

Main source of employment law is a new Labour Code, which came into force on July 1, 2017. Comparing to the old Code (and to the legislation applied in many other European countries), it liberalizes employment regulations and regulates flexible relations between the employers and employees.

An employment contract must be concluded in writing, in two copies – one to the employer, another to the employee. The parties may (or may not) agree on a trial period for up to 3 months, during which any of the parties has a right to terminate the employment agreement by giving another party written notice 3 days in advance.

In most cases, working time may not exceed 40 hours per week. A daily period of work must not exceed 8 working hours. Non-fixed-term employment contracts are more popular, however, fixed-term contracts can be signed, usually for the duration not longer than 2 years.

There also are additional, more flexible types of employment contracts – such as zero-hour employment contract (allows to recruit employees without an obligation to provide them agreed working hours), employment contract for project work (concluded for a specific project; expires upon reaching the pre-agreed results); job-sharing employment contract (two employees can agree with the employer on sharing one job position) and others.



Lithuanian companies can be liquidated / closed voluntary by its shareholders or owners. There are no specific requirements to be met. Nevertheless, we’d strongly advise to check if company’s books, declarations submitted to Tax inspectorate and overall legal stance is in order.

The procedure consists of the following steps:
1) The shareholders/owners pass a resolution to liquidate a company and appoint a liquidator.
2) Liquidator prepares initial documents, public announcement about the status change of a company must be made and documents must be submitted to the Centre of Registers. A status of a company undergoing liquidation is acquired.
3) Tax authorities may start the full inspection of a company undergoing liquidation. Sometimes, especially in cases when a company did not have much activity, they decide to skip this step.
4) The liquidator performs other duties: prepares documents and reports, uses company’s assets to cover the claims (and distributed the rest to the shareholders/owners), submits the required documents to State Archive, closes company’s bank accounts.
5) The last step is to submit the final documents to eliminate the company from the Register. After this, the company is considered liquidated.

The procedure usually lasts 2 to 6 months – the duration mainly depends on whether Tax authorities decide to start the inspection or not.



Lithuanian startup visa program is aimed at attracting non-EU startup founders to Lithuania.

Eligible startups must be innovative and scalable, should have enough funds for at least one year of their activity and should operate in ether of the following areas: information technologies, biotechnologies, nanotechnologies, mechatronics, electronics or laser technologies.

Applicants must submit an online application (including personal information, team roles and background, information about your startup, 1-year action plan with needed financial resources, 2 year strategy), have their application approved by evaluation committee (which includes a video interview, the procedure usually takes up to 10 days) and apply for residence permit. The procedure of acquiring a residence permit takes 2 months (or 1 month for a premium).

Permit can be extended for 1 more year in case the sufficient progress on the project is proved. To stay after the first 2 years, applicants must meet the migration requirements that apply for standard businesses.  



An EU citizen may enter the Republic of Lithuania without limitations and stay therein. In case a person stays for more than 3 months – he/she must register in Migration Department and get a temporary residence certificate. The procedure is simple.

Required documents:
1) Residence permit application form (press here to download)
2) Passport;
3) Documents confirming that a person is a trainee or an employee, runs a business or studies in Lithuania. Contact us or full list of options and documents and free advise).
4) Proof of place of residence (proof of ownership or notarized confirmation from a landlord)

All the documents must be brought to Migration Department. Application will be processed within 10 working days for a state fee of € 8.60. The certificate is valid for five years.

Having this certificate will allow the person to acquire and use his Lithuanian e-signature. 



In October 31, 2017, World Bank Group announced Doing Business 2018: Reforming to Create Jobs, a flagship publication, measuring the regulations in 190 economies that enhance business activity and those that constrain it.

Lithuania is up by 5 positions since the last report published and is now 16th most business-friendly country in the world. Such countries as Germany, Austria, France, Netherlands and Poland have lower overall ranking.

Overall ranking sounds too abstract?

Lithuania is 1st in all Europe and Central Asia for registering property, paying taxes and enforcing contracts. It was the only country in the Central and Eastern European region to have improved its position in the Doing Business index this year.

Companies and entrepreneurs are advised to shortlist Lithuania as a perfect jurisdiction for their new or expanding business.



According to Doing Business 2018 report by World Bank Group, Lithuania is 1st in all Europe and Central Asia for registering property.

Except for agricultural land, there are virtually no restrictions in foreign ownership of land in Lithuania.

Every sale-purchase transaction consists of:
1) Sale-purchase agreement of a real estate must be certified by a notary. Transfer of real estate is documented by an act of transfer-acceptance signed by both seller and buyer. Notarization of the sales contract usually takes an hour or so, but it can take up to several days to prepare documents and verify data (at the initial stage, the notary is required to order verification and revision of cadastral and registration data of the property). Notary fees are generally around 0.45% of the property value (and there is a maximum cap of 5 792,40 Eur).
2) Registration of the transaction in the Real Estate Register typically takes up to 10 workdays, but it can be expedited to 3, 2 or even 1 day by paying a surcharge. Registration fees are generally around 0.55 % of property value (and there is a maximum cap of 1 448,10 Eur, applied separately for the land and buildings).

Usually, real estate agent´s fee is 1.5% to 3.0% of the purchase price, plus 21% VAT.



Lithuanian invoicing rules on the format and information to be provided on invoices conform to the obligations of the EU VAT Directive and regulations in other EU countries. Lithuania permits the use of electronic invoices under certain conditions.

Invoices must contain the following information:
Date of issue
Number of invoice (invoices must be numbered sequentially)
Company code (or tax ID number) of the supplier
VAT number of the supplier (if the supplier is registered VAT payer)
Name and full address of supplier
Company code (or tax ID number) of the purchaser
VAT number of the purchaser (if the purchaser is registered VAT payer)
Name and full address of purchaser
Full description of the goods or services provided
Quantities of goods, if applicable
The net, taxable value of the supply
The VAT rate applied, and the amount of VAT (in case the supplier is a VAT payer)
Details to support zero VAT – export, reverse charge or intra-community supply (in case the supplier is a VAT payer)
The total, gross value of the invoice

Lithuanian VAT invoices should be issued immediately after the taxable supply takes place. In the case of long term services such as supply of electricity, invoices may be issued on a monthly basis on the 10th day of the month following the supply.

Invoices must be stored for ten years.