Estonia vs Latvia vs Lithuania: Where to Register a Company in the Baltic States

Founders who look at the Baltics usually compare all three countries at once, and on paper they look alike: small, digital, in the EU and the eurozone, with low state fees and a limited company that one person can own from abroad. The differences sit one level down, in how each Baltic country taxes profit, how it lets a foreigner sign documents and what its tax office expects month after month.

This Estonia vs Latvia vs Lithuania comparison puts the three countries side by side, one table per criterion, and explains each term where it first appears. If you have already narrowed the choice to two, our guides to Estonia and Latvia and Estonia and Lithuania go deeper into each pair.

Five Terms Used Throughout This Guide

Company Formation in the Baltic States at a Glance

One pattern runs through every table below. Estonia and Latvia tax profit the same way but differ in how a foreigner gets access to the system; Lithuania taxes profit every year but gives small, locally run companies the lowest rates in the region.

Legal Forms: OÜ, SIA and UAB, and the Smaller Ones

Each country also has a lighter form for very small businesses. They come up often in forum advice, so here they are side by side.

For a foreign founder the real choice is OÜ vs SIA vs UAB. The small-capital SIA and the MB are domestic tools that banks and business partners treat as second-tier, and Estonia needs no such tier because the OÜ itself starts at one cent.

Registering a Company in Estonia, Latvia and Lithuania

All three registers work in days, so the difference is what a foreign founder has to do first, and again every time something needs signing. An Estonian e-resident does it from a laptop. In Lithuania the practical shortcut is a ready-made company, one that somebody has already registered and never used, while founding a new UAB from abroad means a notarised and apostilled power of attorney or a trip to Vilnius. Latvia has no shortcut of either kind. Our guide to how long registration in Estonia takes shows the Estonian timelines route by route.

Corporate Tax in the Three Baltic States

Corporate income tax is the tax a company pays on its profit. The three countries differ less in the rate than in the moment the tax is charged: every year on whatever the company earned, or only when the owners take the profit out.

In Lithuania the company pays 17% every year whether or not you take the money out; in Estonia and Latvia it pays nothing until a dividend is declared. If you plan to reinvest for several years, that difference shows up in every year’s accounts. If you take all the profit out each year, it shrinks to a few thousand euros, as the next table shows.

Three Countries, One Profit of €100,000

Your own country may tax the dividend again when it reaches you, and a company run entirely from another country may be taxed there, whatever its registration says. Latvia’s optional 15%+6% regime changes the mechanics rather than the total: on the same €100,000 it comes to about €100 more than the standard 20%.

VAT in the Three Baltic States

VAT is the sales tax added to invoices once a company’s turnover passes the registration threshold.

The lower Latvian and Lithuanian rate helps when you sell to consumers in that country and changes nothing when you invoice businesses abroad, which is what most remote founders in the Baltics do.

Day-to-Day Administration in Each Baltic State

Banking is the one row where the three Baltic countries are closer than founders expect. A payment institution is a licensed company such as Wise or Revolut that gives you an account with an IBAN without being a bank, and in our practice both Estonian and Lithuanian clients end up with one, so the bank question rarely decides the country. The administration does. Latvia has the Estonian tax model, yet it offers nothing like e-Residency, every filing is in Latvian and, in our clients’ experience, the State Revenue Service responds slowly. An owner who does not read Latvian therefore depends on a local accountant for every official letter. Lithuania is more predictable: a foreign owner works through an accountant and a power of attorney from day one. Estonia is the only one of the three where the owner can be their own administrator, and the authorities treat a foreign-owned company as the normal case.

Companies in the Baltic States by the Numbers

When comparing companies in the Baltic countries by sheer numbers, Estonia has the fewest people and the most companies, and the gap is not explained by tax alone, since Latvia uses the same tax model. The full figures and the method are in our study of companies in the Baltic states per capita, and our survey of the busiest company addresses in the Baltics shows where those companies are registered.

Where Each Baltic Country Is the Better Choice

There is no single best Baltic country to start a business in, and no Estonia vs Latvia vs Lithuania table can decide for you. The right country follows from where you live, where the profit goes and whether the business is tied to a place.

In our experience the founders who stay with Lithuania are the ones who can say exactly why they need Lithuania: a licence from the Bank of Lithuania, a Lithuanian market, a warehouse near Klaipėda. The rest usually choose Estonia once they have seen the tax table and understood what e-Residency lets them do on their own.

Starting a Company in the Baltics With Eesti Firma

We register companies in two of the three Baltic states, Estonia and Lithuania, and most of our clients choose between those two. If your business is rooted in Latvia, a Latvian firm will serve you better, and we say so. Tell us how the company will be run and where the money will go, and we will tell you which Baltic state fits, set the company up and then take care of the legal address, contact person and accounting.

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