The Republic of Lithuania boasts of its diversified market economy, multilingual workforce, advanced IT infrastructure, and FDI friendliness. The country had always been on the list of growing nations. Indeed, it is the best country for businesses to invest in, as it holds the largest share of the economy among the three Baltic states in Europe.
Simple Guide on How to Buy a Business in Lithuania
(i) Business Types in Lithuania
Before you even think of investing in a business in Lithuania, you must know what types of businesses exist there. The country allows companies to get registered as public or private companies, limited liability companies, non-governmental organizations, associations, or representative office companies.
(ii) Business Coming For Sale in Lithuania
Businesses that are sold in Lithuania are mostly licensed and belong to the travel, tourism, or food industries. For example resorts, rural tourism companies, Asian cuisine restaurants, Lithuania-based Chinese restaurants, wine shops, etc.
However other business streams include server hosting, infrastructure development, furniture manufacturing companies, etc.
(iii) Steps For Buying a Business in Lithuania
If you’re an investor or business owner showing interest in acquiring a business in Lithuania, here are a few checklists or steps that you need to undergo.
- Company’s legal and registration aspects
- Company representation before state authorities
- Proper consultation and company analysis
- Preparation of contract
- Executing the sale transaction
Company’s legal and registration aspects
With your in-house or third-party legal team, validate the target company’s registration documents and legal aspects abiding by the Lithuanian government. Tax inspection is something important. And it has to be examined before you shortlist the list of target companies.
Company representation before state authorities
Before entering into a sale or a contract, any business must represent itself. In doing so, the state authorities, the industry, and the market get ready to buy the represented organization. For example, a business may represent itself at conferences or exhibitions.
Proper consultation and company analysis
Lithuania has numerous consulting agencies that can work on your behalf when acquiring a shelf or ready-made company in their country. They help you do all the groundwork in terms of analyzing the company’s credibility, profitability, liability, awards/ recognitions if any, major threats, customer base, etc.
Based on the consultation report and company analysis metrics, you can make a decision on whether or not to buy the business.
Preparation of contract
The contract part comes next after finalizing the decision to buy the target company in Lithuania. The buyer usually prepares the contract or the sake agreement including both company descriptions, reasons for the acquisition, proposed compensation, etc.
Executing the sale transaction
Once the target company accepts the proposed contract, they prepare themselves for the sale. This will be followed by further proceedings like sale execution, handover or transition, important terms or clauses discussion, settlements (optional), employee retention, etc.
Competitive Advantage Buying Business in Lithuania
Unlike other countries, the Lithuanian government does not ask or request that investors pay the company capital when buying a business in the country. In other words, as the company has already been formed (ready-made) when you buy it, you need not pay for the capital cost of 2,500 euros. Whereas, if you’ve got to form a new company in the country, you’ll have to pay this capital and, of course, wait for weeks to get it incorporated.
Now you may feel how easy it is to buy a business in Lithuania, Europe!
