Quick answer
The minimum share capital of a Lithuanian UAB is €1,000. With the minimum capital, the whole €1,000 is paid by bank transfer into a temporary accumulative account before the company is registered. After registration, the money belongs to the company and can be spent on its business.
For many foreign founders setting up a company in Lithuania, share capital is the step that slows things down. The amount is small, but the payment rules are not obvious. Below we explain how the share capital of a UAB works, from the first payment to later changes and losses.
Minimum Share Capital of a Lithuanian UAB
Share capital, also called authorised capital, is the total nominal (face) value of all the shares a company issues. For a Lithuanian UAB, the private limited company often called a Lithuanian LLC, the law sets the minimum at €1,000 and allows any higher amount. Until 1 May 2023 the minimum was €2,500, which is why older sources still quote that figure.
This money is the founders’ first investment, not a fee or a deposit. Once the company is registered, it belongs to the company and can pay for rent, an accountant or the first invoices, but the shareholders cannot simply take it back.
How Much Must Be Paid Before Registration
The law sets two conditions. Each founder must pay in money, not assets, at least a quarter of the nominal value of their shares, and these first payments together must reach at least €1,000. Anything still unpaid must be settled by the deadline in the founding documents, which cannot be more than 12 months after they are signed.
With capital of €1,000, a quarter is only €250, but the total must still reach €1,000, so the whole amount goes in before registration. The quarter rule raises the total paid upfront only when the capital exceeds €4,000.
| Share capital | Paid up before registration (minimum) | Can be paid later (up to 12 months) |
|---|---|---|
| €1,000 | €1,000 | €0 |
| €2,500 | €1,000 | €1,500 |
| €10,000 | €2,500 | €7,500 |
In our practice, almost every client registers a UAB with the minimum €1,000. A larger capital is needed when a licence sets a higher minimum, and it can help when a tender or a business partner expects a stronger balance sheet. For other businesses, €1,000 is enough.
Paying Share Capital Through an Accumulative Account
The money cannot go to an ordinary company account, because the company does not exist yet. Instead, a temporary accumulative account, also called an accumulation account, is opened for the company being founded. The funds stay blocked there until the company is entered in the Register of Legal Entities, kept by the Centre of Registers.
Our clients usually go through these steps:
- The founding documents are prepared, and the account is opened with a Lithuanian bank.
- The founder transfers the capital from their own account, which does not have to be in Lithuania.
- The bank issues a certificate confirming the payment, which goes into the registration file.
- The company is registered, and the bank releases the money to it.
Opening the account and getting the certificate usually takes about a week. Once registered, the company needs a working account for everyday payments, and our guide to a bank account for a Lithuanian company compares the options.
Contributing Assets Instead of Cash
The first payment for the shares must always be made in money. The rest can also be paid with assets, such as equipment, real estate or property rights like a trademark. An independent property valuer must confirm that the asset is worth at least the nominal value of the shares issued for it. Work and services cannot be contributed.
With €1,000 of capital, the whole amount is paid in money anyway, so this route is mostly used when a shareholder brings an existing business asset into the company during a later increase.
Increasing the Share Capital
An increase is decided by the general meeting of shareholders with at least two thirds of the votes, or by the sole shareholder. Usually the company issues new shares that shareholders or new investors pay for with money or valued assets, but it can also turn retained profit or reserves into capital.
Existing shareholders have a pre-emption right to buy new shares in proportion to their holdings, unless the general meeting removes it. The capital counts as increased only once the amended articles of association are registered with the Register of Legal Entities.
Reducing the Share Capital
A reduction also needs a two-thirds vote of the general meeting or a decision of the sole shareholder. It is allowed only for set purposes, such as covering losses, cancelling shares the company has bought back or paying funds out to the shareholders. The capital can never fall below €1,000.
To protect creditors, the company must notify each of them, and the decision is announced publicly through the Centre of Registers. Creditors then get a set period to demand extra security for their claims, and the amended articles of association can be filed only after it ends. The reduction takes effect once they are registered, and only then can money go to the shareholders.
For example, the shareholders of a UAB founded under the old €2,500 minimum can reduce the capital to €1,000 and take out the €1,500 difference. Check the tax treatment of such a payout with an accountant first.
When Equity Falls Below Half of the Share Capital
Unlike the fixed share capital, equity moves with the company’s results: it is everything the company owns minus everything it owes. If losses push equity below half of the share capital, the law requires action.
The director, or the board if there is one, must call a general meeting within three months of learning about the shortfall. The shareholders then decide how to close the gap, for example by covering the losses with additional contributions or by reducing the share capital. The gap must be closed within six months of the director learning about it, and a director who does not act in time can be fined €300 to €560. Our article on the director of a Lithuanian company covers the director’s other duties.
With €1,000 of capital, equity below €500 is enough to trigger the rule, which a single loss-making year can do. Because such a company cannot reduce its capital any further, its shareholders close the gap with additional contributions or a capital increase. Dividends stop even earlier: they cannot be paid if equity is, or would become, lower than the share capital plus certain reserves.
Skipping the Capital Step With a Ready-Made Lithuanian Company
Founders who would rather avoid the accumulative account can buy a ready-made Lithuanian company. Its share capital was paid in when it was formed, so the buyer takes over its shares and has no capital contribution to make. In our experience, this is the fastest and least bureaucratic way to get a UAB: the transfer is done remotely with scanned documents, without notarised powers of attorney or a trip to Lithuania. The main trade-off is a name chosen by someone else, which can be changed after the purchase.
Registering a Lithuanian UAB With Eesti Firma
Share capital is one of several steps in company registration in Lithuania, alongside the founding documents, a registered address and the director’s appointment. Eesti Firma registers new UABs for foreign founders, either in person or remotely under a power of attorney, and guides them through the capital payment. We also offer ready-made Lithuanian companies. Tell us about your plans, and we will suggest the route that fits.
Frequently Asked Questions
Yes. Once the company is registered, the share capital is its own money and can cover any business expense, such as rent, salaries or supplier invoices. It does not have to stay untouched in the bank account.
Yes, the small partnership (MB) has no minimum capital. Its members can only be individuals, and there can be no more than 10 of them, so it suits small owner-run businesses rather than companies with corporate owners. Our guide to the Lithuanian LLC compares the two forms.
Not freely. Shareholders can receive part of it through a formal capital reduction, which cannot go below €1,000, or on liquidation, when whatever remains after creditors are paid is shared in proportion to their shares. If losses have used up the capital, there may be nothing to return.
An Estonian OÜ can be founded with as little as one cent of share capital, paid in full before registration. The rule on equity falling below half of the share capital applies in both countries. Our article on the share capital of an Estonian company explains the Estonian rules.
