Lithuania: 7% on Income from Software You Wrote Yourself
Lithuania taxes income from software a company wrote itself at 7%, deducts R&D spending three times over, and lets a small company run at 0% for its first two years. We register a UAB, set the tax track and prepare the ground for a Bank of Lithuania licence if you need one.
Setup time
About 3 business days
Corporate tax
17% / 7% own IP / 0% first two years
Foreign ownership
100% permitted
Main legal form
UAB (LLC), capital EUR 2,500
Futura Digital works with local partners and industry associations in Lithuania.
Lithuania is one of the few EU countries where the incentive names software directly: income from a computer program the company itself created is taxed at 7%, not at the standard rate.
Market
Why Founders Choose Lithuania for Business Registration
7% on income from your own software
From 2026 a reduced 7% rate applies to income from patented inventions and copyright-protected computer programs the Lithuanian company created itself.
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R&D deducted three times
Research and development costs, other than depreciation of fixed assets, are deducted three times over in the period they are incurred.
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Two years at 0% for a small company
A company with fewer than ten employees and under EUR 300,000 of annual revenue pays 0% for its first two years and 7% afterwards.
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The Baltic licensing gateway to the EU
Payment and e-money licences are issued by the Bank of Lithuania and passport across the European Union from a single authorisation.
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Who It's For
Who Should Consider Registering a Company in Lithuania
Studios and product teams owning their code
Teams whose revenue comes from software they wrote themselves, where the 7% rate applies directly.
R&D and engineering centres
Groups opening a Lithuanian development centre to use the triple R&D deduction and the Baltic engineering market.
Fintech and payment businesses
Companies that need a Bank of Lithuania payment or e-money licence with EU-wide passporting.
Early-stage companies watching burn
Small teams that can spend their first two years at a 0% corporate rate before the business scales.
How we help you open a company in Lithuania
One partner for all questions
Registering a UAB is quick. The work is in the choice: standard rate, the small-company track, or the 7% rate on income from your own software — and in documenting R&D so the triple deduction survives a tax review.
Futura Digital manages the entire journey — from initial structuring to a fully operational company with bank accounts and a resident team.
- Incorporation: UAB registration with the Centre of Registers, share capital account and tax registration.
- Tax setup: the rate track (17% / 7% / 0% for two years), VAT registration and the R&D file.
- IP: structuring rights to software so the 7% rate applies to the right income.
- Licensing: groundwork for a Bank of Lithuania payment or e-money licence where the business needs one.
- Ongoing: payroll, bookkeeping, annual CIT return and financial statements.
Setup process
Partners
We work with selected local partners in Lithuania to support contractors, payroll and compliance for distributed teams.
- Local partner support for contractor management, banking compliance and personal tax accounting.
- Practical solutions for paying a distributed team and contractors across jurisdictions.
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