Lithuania passes e-residency legislation to boost investment

Lithuania passes e-residency legislation to boost investment
By Wojciech Kosc in Warsaw July 17, 2019

The Lithuanian parliament passed amendments to the law on the legal status of aliens on July 16. The amendments will allow foreigners to obtain e-residency in order to enable company registration as well as use banking services and pay taxes using online services only, without setting foot in the Baltic state.

Lithuania hopes that e-residency will attract investors and create a “more favourable business environment” in the country, according to the Lithuanian home affairs ministry. The new law will take effect from January 1, 2021.

Nearby Estonia has operated an e-residency system since 2014, which currently boasts nearly 54,500 e-residency permits and over 6,000 companies operated remotely from 136 countries around the world. E-residents brought in over €15mn in tax revenue for Estonia, according to information available on the e-residency’s programme website.

In order to receive an e-residency permit in Lithuania, foreigners will need to apply via the Lithuanian government’s migration department in the interior ministry in a fashion similar to obtaining a visa.

Lithuania taxes companies a flat rate of 15% in most cases. The standard VAT rate is 21%.