How to Start Working as a Freelancer in Lithuania

Written by Xolo
on July 08, 2022 5 minute read

Have you been thinking about becoming a freelancer in Lithuania? When you freelance, you have the opportunity to choose where you want to live and work. While you have many locations to choose from, this central European country provides you with the ideal setting for starting a new business as an individual enterprise. At the same time, it has great infrastructure, beautiful scenery and a friendly population. With a closer look at what it takes to start working as a freelancer in this lovely country, you may decide that this is the right career path for you to take.

Advantages of Freelancing in Lithuania

Freelancing in Lithuania can take your career to a new level. After all, it gives you the incredible opportunity to make important business decisions, such as deciding which clients to work for, how much to charge your clients, how to find work and more. At the same time, freelancing has the ability to improve your personal life. This is because you can create a work schedule that accommodates the interests that are most important to you. You can adjust work hours so that you can enjoy more quality time with friends and family.

In particular, Lithuania offers a great economic environment. This country is situated in northern Europe and is a part of the European Union. In addition, it receives protections for the Schengen Agreement and NATO. Overall, it has a favorable tax system, and this makes it popular for investors. Because of these factors, you may find many wonderful opportunities as a freelancer in Lithuania.

Whether you have decided to start freelancing in Lithuania or you are still exploring the possibilities, one thing is certain. You need to know how to open a business in Lithuania for your freelancing work.

How to Register to Work as a Freelancer in Lithuania

There are two opportunities available for working as a freelancer in this country, and they are an individual enterprise and individual activities. The most common legal form that freelancers choose is an individual enterprise. It has low costs and an easy setup process. You will not need to prove that you have a certain amount of capital to start, but you will be legally responsible for all business activities. To get started, you simply need to register a name for your business through the Register of Legal Entities and state your permanent address through the State Enterprise Centre of Registers.

The other entity type is individual activities. To work as an individual activity, you do not need to register your business formally, but you will need a certificate to operate. Depending on the work activities that you plan to do, you will need either a Business Certificate or an Individual Activity Certificate. A Business Certificate is suitable if you will do an activity that does not require you to pay VAT or to register for VAT. You can apply for a Business Certificate through the State Tax Inspectorate. An Individual Activity Certificate is obtained through the same agency, and it enables the freelancer to work with minimal restrictions.

If you are not currently a resident of Lithuania, you will be responsible for obtaining a residence permit. Depending on the circumstances, this permit may need to be renewed every one to five years. It is available through the country’s Migration Department.

Legal Duties for Freelancers in Lithuania

When you freelance in Lithuania, you will be legally responsible for addressing important matters like taxation and accounting. For example, if you earn income in Lithuania, you must pay a personal income tax. This country has a very low tax rate of 20% for annual income below 90,246 euros annually. Any amount in excess of this amount is taxed as 32%. As a freelancer working as an individual activity or individual enterprise entity, you are not required to make state social insurance contributions or pay into the compulsory health insurance system. Also, there are no local taxes in this country.

In Lithuania, businesses are required to collect VAT on goods and services from consumers in this country. Other countries have their own VAT requirements and rates. The standard VAT rate in this country is 21%, but some products and services may be associated with a reduced rate of between zero and 9%. If you sell qualifying goods or services and have sales exceeding 45,000 euros annually, you are required to register and pay for VAT. VAT registration can be completed through the State Tax Inspectorate. 

In addition to being responsible for personal income tax and VAT while working in Lithuania, you must comply with specific accounting requirements. You will need to track your business’s income and expenditures. This includes providing a purchase receipt or invoice to all of your customers for each transaction. In this document, you should clearly outline the amount of VAT paid. Keep in mind that your business’s accounting records may be reviewed at any time upon request from the taxation authority in Lithuania. These records should be kept on file for several years.

Tips to Manage Your Money When Working as a Freelancer in Lithuania

Regardless of the business activity that you choose to do while freelancing in Lithuania, managing your money properly is critical. Proper money management enables you to make savvy business decisions that keep you operating in the black. At the same time, money management may help you to be more profitable overall. Tracking income and expenses, however, can be a tedious challenge for some freelancers.

There are a few things that you can do to better manage your finances as a freelancer. For example, keeping up with your income and expenses on a daily basis is important. Entering transactions into your accounting system daily will prevent the receipts from piling up, and it will enable you to view your financial status in real-time.

It is also helpful to prepare a detailed budget. This will have all of your projected income and expenses going forward. You should create a broad annual budget at the beginning of each year. In addition, you should create a more detailed budget for each month or quarter. You will have a better idea of what your income and expenses will be for that time period. Remember to update your budget regularly so that you always know where you stand financially.

In addition, you should look for ways to keep costs to a minimum. For each business expense, always shop around. Look for products and services that meet your needs without providing more than is necessary. Before making a purchase, analyze your budget so that you know what impact that purchase will have on your business’s bottom line.

How to Start a Business as a Freelancer in Lithuania

You can see running a business as a freelancer in this country can be relatively straightforward regardless of the type of goods or services that you offer. However, you do need to walk through a few steps before you can start serving your customers. What does it take to open a business in Lithuania?

  1. If you are not a legal resident of Lithuania, you must first apply for the appropriate residence permit through the Migration Department in Lithuania.
  2. Decide which business entity you wish to operate under.
  3. Request a Business Certificate or an Individual Activity Certificate through the State Tax Inspectorate, depending on the type of business activity that you plan to do.
  4. Register to pay VAT, if applicable, through the State Tax Inspectorate.
  5. Set up your accounting system, including designing invoices. As an alternative, sign up for Xolo Go’s great money management and invoicing features.
  6. Open a business bank account in Lithuania.


You do not necessarily need to be in Lithuania in order to run your business. Instead, you can take advantage of the many benefits of freelancing from anywhere in the world with e-Residency. This is a special feature available to you through Xolo Leap. Xolo Leap also can help you to establish your freelancing business and manage it from your dream location.

Become and Work as a Freelancer in Lithuania

The ability to freelance in Lithuania is an amazing possibility that you understandably want to take full advantage of. From the low tax rate in this country to its incredible business opportunities and overall wonderful living environment, you can enjoy an amazing life and a lucrative professional career when you start freelancing. With an easy setup process, you will face minimal roadblocks as you prepare to launch your new business.

Are you ready to get serious about freelancing in Lithuania? As you walk through the process of getting a residence permit and applying for the right freelancing certificate, you can at the same time check out Xolo Leap and start opening your EU solo business with Xolo!

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