Lithuania Country Facts

We provide comprehensive information regarding, Culture, Work life, Taxation, Visa’s & immigration, Labour Law, recruiting in Lithuania and employment contracts.

Global Expansion Made Easy for You

Expanding into Lithuania generally comes with challenges, however, partnering with us and using Employer of Record (EOR) eliminates the frustrations you could encounter.

Lithuania Visas, Work Permits and Migration

With several business and start-up incentives, low costs in administration, labour, and tax, and a strong work-life balance, Lithuania is an attractive global business expansion option for foreign companies, entrepreneurs, and workers. However, Lithuanian visa and permit regulations require expert guidance as they vary according to the zones foreign nationals reside in: the European Union, European Economic Area, and outside zones are all affected by these regulations.

What Types of Work Visas, and Permits for Lithuania are there?

There are two types of Visas that one may apply for to enter Lithuania:

  • Schengen Visa (Short-Stay Visa C):

Individuals who want to enter Lithuania for short-term purposes must apply for a Schengen Visa, except in the cases where visa-free administration is applied. The Schengen visa can be single-entry, double-entry, or multiple-entry. There is also a Schengen transit visa (A), which entitles a person to stay in the transit area of an international airport in Lithuania, during a stopover or change of an aircraft.

A foreigner who holds a short-stay visa may travel through the Republic of Lithuania or other Schengen states, as well as stay in Lithuania for not more than 3 months in a 6-month period.

  • National Visa (Long-Stay Visa D):

Individuals who wish to enter and stay in the country for a longer period. These visa types are issued for no more than 1 year. There are two types of national visas:

A single-entry national visaissued to a foreigner granted temporary or permanent residence in Lithuania.

A multi-entry national visa: issued to foreigners who go to Lithuania to work, study, conduct scientific research or engage in legal activities.

Lithuania has also introduced a Start-Up Visa, for entrepreneurs who wish to start-up their company base in Lithuania. This can be done easily and efficiently through an online portal but will require the necessary documents and procedures for incorporation, and business establishment must be completed in no less than 30 days upon permit approval/delivery.

Lithuanian Tax Laws

Lithuania’s location at the geographical center of Europe means it enjoys access to huge markets in Western Europe, Scandinavia, and the Baltics. It is a hotspot for startups, with a ranking of 11 in the World Bank’s Doing Business Report (2019) due to government funding and tax incentives, as well as straightforward registration procedures. However, dealing with complicated tax matters is a major issue for companies seeking to develop an international presence.

Overview of Taxes in Lithuania

Lithuania boasts a multilingual and international workforce, and a formidable technology industry with thriving sectors such as biotechnology, information and communication, and laser technology. The country offers many opportunities to make your business grow.

Tax, and especially overseas tax, can be complicated. The table below provides an overview, and this guide will explain the tax rates and administration concerning Lithuanian Tax.

Tax Type Percentage

  • Individual Income Tax: 20%
  • VAT: 21%

Corporate Income Tax

  • 15%
  • 20% for credit institutions

Employer Social Security Contributions

  • 1.77% or 2.49%

Capital Interests (With-holding Tax)

  • Royalties & Interests: 10%
  • Dividends & Profits: 15%

Malta Individual Tax – Single, Married

Any individual earning an income must pay local taxes in Lithuania, regardless of their residential status. Permanent residents are taxed on their worldwide income, whilst foreign nationals living and working in Lithuania are only taxed on the income they receive in Lithuania.

Individuals are subject to pay Income Tax (GPM). Income tax can be with-held by the employers and paid to the Tax Inspectorate monthly or paid by the individual in certain cases.

Under tax payment procedure, an individual’s income can be divided into 2 classes: Class A (tax is calculated and withheld by the employer/organization making the payment), and Class B (tax is paid personally through the individual filling a tax return). Income can be divided by class like so:

  • Class A Income Class B Income
    • Employment-related income. Gambling and lottery winnings.
    • Income from sports and performance activity. Income from individual activities (with certain exceptions).
    • Income from rent or sale of immovable or movable property in Lithuania (except for income received under a business certificate). Income from the sale or other transfer of financial instruments.
  • Interest income. Other income not attributed to Class A.
    • Royalties (for residents, and non-residents are exempt).
    • A non-resident individual (as well as a Lithuanian entity, or a foreign entity through its permanent establishment) that has spent Class B income must submit an annual statement on this income on or before 15th of February of the next calendar year.

Lithuanian Entity Set Up

Global expansion into Lithuania generally means that you need to set up an in-country entity. Setting up an entity in a foreign territory can be difficult and comes with many complexities and requirements. However, by partnering with us you create the possibility to bypass this process and utilize our Lithuanian entity. By using our PEO service we take care of the complicated paperwork.

Setting up an entity in Lithuania involves filing in the right documents, registering at the tax office, obtaining your office address, and many more formalities. Since the rules and regulations are not always easily accessible, we created this guide to give you a head start for your expansion plans.

How to set up a Lithuanian Subsidiary

  • Decide on the company type that suits the nature of your business, your business goals and matches your own capabilities to meet establishment requirements. Common company types include: The Lithuania Limited Liability Company (UAB), The Lithuania Public Limited Company (AB), a branch office, or a representative office.
  • Obtain a business address in Lithuania and prepare the documents for registration.
  • The selection of a general manager.
  • Check if your business requires any additional permits or documentation.
  • Prepare the appropriate registration documents and have them translated to Lithuanian and the national language of the founder(s).
  • Reserve a temporary company name (optional).
  • Open an accumulative bank account in Lithuania and deposit the appropriate share capital.
  • Notarize the registration documents at a notary’s office.
  • Register your company at the Register of Legal Entities of Lithuania under the Center of Registers.
  • Register with the State Tax Inspectorate for a Tax Identification Number and a VAT Number no more than 5 days after registration.
  • Register with SODRA, the State Insurance Fund Board.
  • Receive a VAT Number, Tax Identification Number, a certificate of registration and a unique registration number.
  • Open a bank account/convert accumulative account for normal commercial operation.
  • Receive the official company seal.
  • You will also need to check requirements for permits and residencies for foreign employees.

Fees & Registration Times: The fees for registration are as follows –

Process Price (EUR) Time

  • Reservation of Company name: 16 Euro – 1 working day
  • Open a bank account: 30 Euro – 5 working days
  • Notarize documents: 72-290 Euro (depending on share capital) –  1-2 working days
  • Company Registration: 57 Euro – 3 working days

Overall, the company registration process will take about 3 weeks to complete (if there are not any delays). The registration procedures regarding employment will take more time, especially if you are bringing in employees from non-EEA countries.

Application Methods:

Company registration can take place in person or online. In some cases, to apply online you will need proof of a residence permit and/or e-residence signature. E-signatures are also provided by the Center of Registers

Benefits of setting up a Subsidiary in Lithuania

Lithuania is a strong business attraction and destination for establishing a subsidiary and growing your business’ influence. There are also significant benefits to establishing an entity in Lithuania:

  • Subsidiaries in Lithuania are taxed the same as any other resident company.
  • Subsidiary entities in Lithuania also benefit from double tax treaties, which reduces or removes taxes on dividends, interests or royalties paid to the foreign country.
  • Lithuania boasts the largest ICT industry in the Baltic States with great potential for local and foreign expanding businesses, and is also excelling in the life sciences, textile, furniture, food, and the printing and paper industries.
  • Lithuania benefits from the name of “geographical centre of Europe”, and has established itself as a high-value export competitor.
  • According to the Fraser Institute (2020), Lithuania is 11th globally for economic freedom.
  • Lithuania is also the 11th globally for the ease of doing business, according to the World Bank Report (2020).
  • Lithuania is first amongst the EU countries based on the part of the active population with a tertiary education, according to Eurostat (2019).
  • Lithuania’s physical infrastructure gives a range of reliable and high-quality logistics options for investors looking to streamline their operations – markets in Northern Europe, Western Europe and Asia are all easily and affordably accessible.

Lithuanian Market

Foreign companies planning to expand into Lithuania will be met with one of the strongest manufacturing sectors in the world, a highly skilled and educated workforce, straightforward business procedures, and a variety of growth incentives for investors. However, setting up shop in an unfamiliar place comes with its own challenges.

Foreign businesses must comply with employment, tax, payroll, and corporate legislation whilst ensuring that their employees are working productively and efficiently. At Bradford Jacobs we know that these complexities can counteract your plans. By using our Professional Employer Organisation (PEO) you do not have to worry about these aspects since our in-country experts will handle every aspect of compliance.

Starting a Business in Lithuania

Lithuania’s position at the center of Europe means that the country has access to diverse marketplaces in the EU, the Baltics, and Asia. With a robust infrastructure, and a dominant ICT industry that makes over EUR 675.2 million in exports, this creates an attractive environment for any business owner who seeks to expand their business.

Lithuania’s biggest asset is its rising reputation as an entrepreneurial hub, with over 1,000 businesses from around the world planting their roots in the country, in which government start-up incentives (such as a start-up visa for foreign nationals) have played a huge part.

To start a business in Lithuania you must go through the registration procedure, which is straightforward and designed to be executed easily. These steps can be done online or in person, but for online registration, you will require an e-signature.

Expanding into Lithuania

Foreign companies want to expand into a formidable market, with a large talent pool and attractive labor and administrative costs, which Lithuania provides. Lithuania is a world leader in technology, particularly in ICT services and product, and is fast-growing into an entrepreneur due to its location as well as its attractive company incentives.

Business opportunities in Lithuania include these top industries: global business services, ICT, manufacturing, technology, life sciences, furniture industry, transport and logistics, food and beverages, environmental protection and renewable energy, construction, paper and printing, apparel, textile and leather, chemicals, and wood product manufacturing.

Whilst these industries create opportune levels for international expansion, they can also be expanded locally to popular locations such as Kaunas, Vilnius, Klaipeda, Šiauliai and Panevežys.

Lithuania Business Facts

  • Capital City: Vilnius
  • Population: 3.5 million
  • Cities: Vilnius, Kaunas, Klaipėda, Šiauliai, Panevėžys, Alytus, Marijampolė, Mažeikiaj, Jonava, Utena, Kėdainiai, Tauragė, Telšiai, Ukmergė
  • Official language: Lithuanian
  • Economy/GDP (2020): $55,688 million, 83rd
  • World Ranking: 11th in Doing Business (World Bank, 2020)
  • Leading sectors – ICT, manufacturing, technology, life sciences, furniture industry, transport and logistics, food and beverages, environmental protection and renewable energy, construction, paper and printing, apparel, textile and leather, chemicals, metal, and plastic processing
  • Main exports: Refined fuel, machinery and equipment, chemicals, textiles, furniture, plastics, wood, cereals, vehicles, other chemical goods
  • Main imports: Crude petroleum, cars, packaged medicine, refined petroleum, and electrical machinery/electricity
  • Main trading partners: Poland, Russia, Germany, Latvia, and the Netherlands
  • Government: Unitary Semi-Presidential Republic
  • Currency: Euro

Advantages and Challenges of the Lithuanian Market

Advantages of expanding into Lithuanian market include:

  • Low operating costs: Employment and operational costs are lower compared to other European countries but boasts one of the best cost-to-quality ratios in Europe.
  • Competitive tax system: Lithuania has the third-lowest corporate profit tax in the CEE (KPMG, 2019).
  • Educated workforce: Lithuania is the fourth highest in the EU concerning the share of youth in tertiary education (Eurostat, 2019).
  • Language: English is the favoured language for doing business in Lithuania, and most workers are multilingual.
  • Ease of Business: Lithuania is 8th in the EU for digital public services for businesses (European Commission, Digital Economy and Society Index 2020).
  • Logistics: The infrastructure of Lithuania is highly developed, and has access to the rest of Europe, the Baltics and Asia in a matter of days.
  • EU Benefits: Lithuania is a member of the European Union and enjoys the same trade benefits of other EU nations.

The biggest challenge facing the Lithuania market currently is the effects of COVID-19, like many other nations in the EU and around the world. Other challenges include income disparity, slow tax reforms, and low healthcare spending, but reforms are taking place to combat these challenges.

Limited Company / Subsidiary or Branch in Lithuania?

A subsidiary established in Lithuania is considered a legal entity that is separate from the parent company, with independent administration and management. This provides more freedom for market exploration and creating international credibility.

A branch however, does not have any independence from the parent company, is not treated as a resident entity of Lithuania, and is limited in its administration and management.

Lithuanian Contracts

In Lithuania, employment contracts must be presented to employees in writing and there are a variety of contract types to choose from, depending on business needs and employment types. An indefinite contract, however, is the standard.

Employment law, the Labor Code, and (in some cases) collective agreements govern employment conditions, benefits, and health and safety regulations, and must be adhered to. It is best to confirm with the Labor Inspectorate on what regulation applies, as this may vary according to industry and sector.

Labor law in Lithuania is based on both employer and employee protection. The employment relationship and its terms are hierarchically determined by the Constitution, international treaties, the local labor law, collective employment agreements, employment rules and business practices, with the individual contract being last in the order.

Employment Contracts in Lithuania

There are a few types of employment contracts one can use in Lithuania, which are stipulated by the Labor Code, that depend on the employment relationship and the business’ needs:

  • Open-ended/Indefinite employment contract – the standard and most used type of employment contract in Lithuania, which is used for indefinite employment.
  • Fixed-term employment contract – the standard duration of this contract may not exceed 2 years (with exceptions – the maximum duration is 5 years), of which there is more than one type:
  • Apprenticeship employment contract – a fixed-term contract that is used when the person is employed for the purpose of acquiring qualifications or gaining skills required for the profession.
  • Project-based employment contract – a fixed-term contract where an employee carries out their job functions for a particular project.
  • Temporary employment contract – a contract for temporary workers, that cannot exceed more than 2 months.
  • Seasonal employment contract – a contract used for seasonal workers, which can be valid for up to 8 months in a year.
  • Contracts on additional work: this contract type stipulates that the employee will perform certain additional duties (that were not agreed to in the first employment contract) at the same workplace.
  • Contracts with home workers: contracts for work functions being performed at home.
  • Job-sharing employment contract: A contract between 2 employees and an employer, where one job position is shared among the employees.
  • Secondary job employment contract: a contract with an employee who will be performing the same job function for more than one job and must be signed by both the employee and employers involved.

All employee contracts, irrespective of type, should contain the following conditions:

  1. The place of work
  2. The job function
  3. The salary.

If the contract has expired, and neither the employer nor employee have requested its termination, then it is considered extended for an indefinite period.

Employee Benefits

Happy and satisfied employees make your business thrive and lead to even better profits. However, the specific benefits for employees in Lithuania might not all be familiar to you yet. By using our PEO and EOR service we can provide compliant labour contracts for employees in Lithuania including local benefits.

When expanding your company’s presence in a new country, you need to ensure compliance both in your employment contracts and benefit guarantees. These involve social security contributions, sick leave, health insurance, and unemployment, to name a few.

What Compensation Laws exist in Lithuania?

In Lithuania, compensation laws are set by the Labor Code and national legislation, but the compensation may vary according to the sector the employees are in, the regulations of the relevant collective agreements and internal regulations of the company.

For example:

  • The 13th month salary is not required to be paid, but companies may pay the salary as a yearly bonus
  • Compensation is also required for business trips that includes a flat-rate daily allowance for the employees for all days of the trip.

Lithuanian legislation also mandates employee compensation for overtime, work on weekends (depending on the job) and public holidays.

There are, however, other benefits/compensation which are guaranteed by national legislation:

  • National Minimum Wage

The minimum wage was changed from EUR 607 (2020) to EUR 642 (2021). Employees must be receiving at least this amount from their employers (although this will vary according to the position and qualifications).

  • Social Insurance Contributions

Employees in Lithuania are entitled to social security benefits. Social security contributions are paid monthly to the Social Security Fund (SODRA) through contributions by the employee and the employer (employee contributions are withheld by the employer). The contribution percentage varies according to the employee’s pay. Social security contributions include pension, healthcare, unemployment, and maternity/paternity.

  • Notice Periods

Notice periods in Lithuania are mandatory and vary according to the termination type. For indefinite employment, the standard notice period after a year is month, and increases gradually.

  • Redundancy, Termination and Severance

Employees are entitled to severance pay after the probation period is passed. If the employment period was less than a year, the employee is entitled to half a month’s payment; for over a year they are entitled to 2 months of their average salary. If the employee is dismissed to due to employer’s will, they are entitled to 6 months’ worth of their average salary.

  • Work Hours and Breaks

Average working hours is 8 hours a day, 5 days a week. Working time cannot exceed 48 hours within a 7-day consecutive period. Breaks are between 30-60 minutes in an average workday.

Social Security in Lithuania

Social security contributions is Lithuania are split according to health insurance, pensions, sickness, and maternity – these contributions are granted on an employee’s salary (which is withheld by the employer). An employer’s contribution is typically split into unemployment insurance and accident insurance. Both are paid monthly by the employer.

Employer’s social security contributions, however, can vary according to the “floor” or “ceiling” attributes:

THE SOCIAL SECURITY CONTRIBUTIONS “FLOOR”

Companies must pay both employer and employee social security contributions for their employees whose monthly salary is lower than or equal to the national minimum wage.

THE SOCIAL SECURITY CONTRIBUTIONS “CEILINGS”

If an employee’s income from the same employer exceeds 60 average monthly salaries, the social security contribution “ceiling” (i.e., exemption) for the employee becomes applicable. If the employment income exceeds this threshold, the employer will only have to contribute the mandatory health insurance rate (6.98%) monthly from the employee’s salary.

Contributor Social Security Contribution (%)

  • Employee: 19.5
  • Employer:1.77 (indefinite), 2.49 (definite)

Statutory Employer Costs in Lithuania

The National Minimum Wage: Employee wages must at least be equal to the national minimum wage of EUR 642 per month. This wage is determined upon by the Tripartite Council and the Government of Lithuania.

Statutory social security costs to be made by the employee (and in certain cases, the employer) also include these monthly contributions:

Contribution Percentage (Employers and Employee)

  • Pension 8.72%
  • Maternity 1.09%
  • Pension 8.72%
  • Maternity 1.09%
  • Healthcare 6.98%
  • Sickness 2.09%

Lithuanian Top Talent

Hiring the right talent in Lithuania to expand your company can result in a thriving business with numerous opportunities. However, the recruitment process can be complicated when you have no physical presence in Lithuania yet. Our PEO and EOR service can be the solution for your company.

At Bradford Jacobs, we believe that the core of every business is its employees. Happy employees result in a team that aims at success and growth. However, labor regulations in Lithuania can divert from other countries and creating a compliant work contract that is satisfying for an employee as well as the company, can therefore be complex.

The Recruitment Process in Lithuania

A foreign company expanding into Lithuania does not require the assistance of a local entity to hire their employees. It is, however, vital to your recruitment efforts to know where you can find the right talent, as well as which local and international employment organizations they can collaborate with to access the right talent pools. This, however, does not come easily – and once the right employee is found, the employer must follow thorough staffing and registration procedures. These include:

  • Registering employees with the State Tax Inspectorate for a Lithuanian Tax Identification Number (VMI).
  • Registering with the State Social Insurance Fund Board (SODRA).
  • Registering employees’ information with the Labor Inspectorate and Employment Services.
  • Creating employment contracts and translating them to Lithuanian.
  • Applying for employees’ work permits.
  • Applying for employee’s visas or special expatriation status (if applicable)
  • Calculating employees’ monthly salary and creating payslips.
  • Researching for any available tax-free allowances or benefits.
  • Submitting wage tax returns and national insurance forms.
  • Corresponding with the involved parties (organizations, trade unions, etc.).
  • Creating annual accounts, financial administration, and year-end statements.
  • Creating a payment schedule for wage tax, national and social insurances, and net wages.

Legal Checks on Employees in Lithuania

The Lithuanian law follows the EU Law Constitution, which require employers to implement equal treatment in the workplace, and protect employees against discrimination based on several characteristics, such as race, nationality, gender, sexual orientation, religion, age, disability, family status or membership in political or public organizations.

This includes background checks, which are only considered fair and legal if they relate directly to a job and are necessary for reaching a decision on recruitment. Such data can only be collected directly from the candidate, following the Data Protection Directive 95/46/EC put in place by the EU. Personal data also concerning a candidate’s health falls under similar restrictions, and is only necessary for:

  • Assessing a candidate’s suitability.
  • Fulfilling the employer’s health and safety obligations.
  • Establishing employees’ rights and providing welfare benefits.

Nevertheless, employers recruiting in Lithuania may ask for the following checks (following certain conditions):

  • Reference and educational checks – these checks are permissible except for reference checks from current employers – the individual’s consent is required.
  • Criminal background checks – It is prohibited to perform an individual’s criminal background check, except for specific situations that are established by labor laws.

Medical checks/examinations – Medical checks are mandatory upon an employee’s hiring, as well as periodic medical checks during the validity of the employment contract for the following groups:

  • Employees under 18 years old.
  • Employees working at night.
  • Shift workers.
  • Employees whose workplace occupational risk assessment results show that there is or might be a risk to their safety or health.
  • Disabled employees – checks should be performed upon hiring and each time their work conditions change.

Basic Facts on Hiring in Lithuania

  • An employer’s questions during an interview are regulated and restricted by EU data legislation – they must directly relate to job specifications and requirements.
  • Terms and conditions of employment in Lithuania are regulated by the Labor Code. Collective agreements and trade unions also play a vital role in work conditions, so it is best to check if your industry/sector is covered by one.
  • It is obligatory for an employer to present two copies of the employment contract to the employee in writing. The contract must also be translated to Lithuanian and any other relevant language.
  • The essential conditions of the employee contract (work function, wage, and place of employment) must be agreed to separately, and any changes cannot be acted upon without the employee’s written consent.
  • The employer must register new employees with the 1-SD form to the Social Security Tax Office no later than one day before the employee’s first day of work.
  • Employers must apply for work permits for foreign employees with the Lithuanian Labor Exchange.
  • In Lithuania, payment is regulated for idle time (when an employee is not provided with work and is not at fault for this time).
  • The standard length of work hours is 8 hours a day and 40 hours a week, but this can be altered according to the type of employment contract and work.
  • Employers must at least meet the minimum wage (currently at EUR 642), but the average monthly salary can differ according to the industry and sector.
  • Overtime is permitted but must not exceed 48 hours within 7 days, and employees are compensated with a one and half hourly pay bonus.
  • Employers are obligated to with-hold and pay employees’ personal income tax and social security contributions monthly.
  • The standard notice period for employee termination is 1 month – if the employee has been working under a year, the notice period is 2 weeks.
  • The Lithuanian Labor Code establishes that a probation period must be at about 3 months, but this may be specified in the employment contract.

Work Culture

To succeed in business in Lithuania, it is vital to have a strong understanding of the country’s business culture. Lithuanian business culture is modern and reflects ongoing changes in Western society. However, there are still hierarchical elements reflected in some companies, although this varies according to the company.

As a global PEO (Professional Employment Organization) it is our goal to be familiar and updated with the business culture in the country we work with and in. By sharing our knowledge about the Latvian work culture, we want to support your global expansion plans. Therefore, we will address all the aspects of the work culture in Latvia to start your expansion well-informed.

Lithuania places great significance on relationships, and local businessmen often treat their business relationships as the foundation of friendships. Thus, it is important to both you and your local business partners to treat business dealings with respect and great care.

Like other countries, there has been an increasing awareness in the importance of work-life balance and flexible working times, but Lithuania still places significant importance on business etiquette for the smooth operation of businesses. Here are some tips and tricks to use during your first few months:

  • Punctuality: In Lithuania, it is considered common courtesy to arrive on time for meetings. It is best practice to arrive about 10 minutes before the appointment; and if you know you are going to be late, call ahead and apologize for the delay. However, in social situations, punctuality is not as strict. Meetings are generally arranged in advance in Lithuania, so scheduling 2-3 weeks prior to the meeting date is required.
  • Languages: English is the language of business in Lithuania, but an effort to speak Lithuanian goes a long way. Other common languages in Lithuania include Russian and Polish.
  • Business Relationships: The business community in Lithuania is close-knit; they are business partners as well as friends. The best way to open communications with a Lithuanian businessperson is through a trusted mutual contact. Once contact is made, it is important to solidify the relationship with regular calls or visits to Lithuania. If hospitality is given, accept and reciprocate. Once a friendship has been formed, they are willing to discuss business. Critical business issues require face-to-face discussions. It is preferred to have all agreements on paper, signed and sealed by both sides and in both English and Lithuanian. Verbal agreements are also practiced, but they are not legally binding.
  • Introductions/Greetings: It is common practice in Lithuania to greet someone with a handshake, holding direct eye contact and with a smile, both before and after a business meeting. It is also customary to exchange business cards at the start of a meeting. Once a relationship has been formed, greetings may become more open and can include a hug – however, it is important to wait for your Lithuanian associates to determine when you have reached that level.
  • Gift-giving: In Lithuania, small gifts upon first meeting with business associates are acceptable, and the first gift should be a souvenir – something small that represents your country or your company. Business meeting gifts include items for the office. While developing the business relationship, gift-giving is standard practice – favorable options include wine, high-quality chocolates or a basket of tea and biscuits. When visiting a Lithuanian home for the first time, it is traditional to bring something for the host such as a bottle of wine/liquor and a box of sweets or chocolate. Any family gifts should also be accompanied with small gifts for the children and/or grandparents. Avoid giving white flowers (reserved for weddings) or chrysanthemums (typical flowers for funerals). Gifts are normally opened in front of the guest upon receiving them.
  • Dress code: Conservative/classical clothing is common business attire in Lithuania – men tend to wear dark suits, and women tend to wear trouser suits, or jackets and skirts. It is expected of foreign business associates to be well-dressed in the appropriate business attire for most formal occasions. During normal business hours, the dress code is less formal – and in small and medium-sized companies, there is often no dress code. However, the general dress-code is business casual, unless a business meeting or formal event is taking place.
  • Formality: In Lithuania, people are first addressed by their honorific title and their surname. Colleagues and supervisors are referred to as “Ponas” (Mr.), “Panele” (Ms.), or “Ponia” (Mrs.) and their first name, or by their title (Doctor, Professor, Director etc.), sometimes including last names. It is important not to address a person by their first name until invited to do so.
  • Personal Space: Personal space is very important to Lithuanians. An arm’s length is the norm, although this does not apply to people they are comfortable with. Lithuanians are generally affectionate with their family, friends, and colleagues.
  • Hierarchy: The business culture of Lithuania is hierarchical, so it is important to show respect to people of authority and senior business members. In some cases, senior-level business members only speak with fellow senior members. Junior members should not address a senior member directly.
  • Communication: Lithuanians prefer face-to-face meetings, as it is important to them to build relationships of mutual understanding and like to turn business relationships into friendships. Lithuanians generally speak softly, are good listeners, and are not very emotive speakers. They do not touch others whilst speaking and can appear reserved upon the first meeting. They are modest, and do not take well to bragging. It is important not to show any anger or frustration. Any topic of discussion can be used to start a conversation – let your business associates get to know you and talk about your family, work, hobbies, and sports.

Lithuania Minimum Wage

In October 2020, the Tripartite Council (which brings together the government, employers, and trade unions) announced a new national minimum wage of EUR 642 per month in 2021, which increased from EUR 607 in 2020.

Probation Periods in Lithuania

According to the Labor Code, the probation period can be established in employment contract. The maximum period is 3 months, but if requested by the employer, this limit can be increased to 6 months. This could also be decreased if both parties agree.

If the probationary period ends with both parties willing to continue the employment, the contract will continue to have effect with no additional actions needed.

However, if the results of the probation period are proving unsatisfactory, the employer can dismiss the employee with a written 3 business days’ notice and is not entitled to severance pay. The employer should, however, verify the reasons for an employee’s dismissal.

Working Hours in Lithuania

In Lithuania, a typical working day is 8 hours, 5 days a week. The working day starts at 8 or 8:30am and ends at about 5:30/6pm. Office hours can vary, and Friday is often a short day with people leaving at about 4pm or earlier. In some cases, the working day is extended to 6 days and/or 48 hours. Workers in the private sector commonly stay late at work and may also work on weekends.

Daily lunch breaks can last between 30-60 minutes.

Overtime in Lithuania

Overtime work for employees generally does not exceed 8 hours in 7 executive working days and must give written consent work up to 12 overtime hours per week. Employees also cannot exceed 180 hours per year in overtime, unless established under the respective collective agreement.

Contact Us

Join Our Newsletter

Stay up to date with latest service offerings while receiving tips and strategies for making your next remote hire.