Business Investment Opportunities in Lithuania 2027

Lithuania has quietly become one of the most interesting entry points into the European Union for foreign capital — a eurozone member with a 17% corporate tax rate, a company that can be registered in one to three business days, and a state that has committed to spending over 5% of GDP on defence every year through 2030. For founders and groups evaluating company formation in lithuania, the appeal in 2027 is no longer just low cost: it is the combination of EU market access, an unusually deep fintech licensing infrastructure, cheap clean electricity, and a government that has rebuilt its permitting system specifically to move large projects faster than the rest of Europe. This guide sets out where the opportunities sit, what changed in the 2026 tax reform, and what investors should watch heading into 2027.

The macro picture going into 2027

The European Commission projects Lithuanian real GDP growth of 3.0% in 2026, easing to 2.1% in 2027, with investment growing 5.8% and 4.5% respectively. The Bank of Lithuania’s own projections have run in a similar band, around 2.8–2.9%. Inflation is the near-term irritant: it is expected to peak around 4.4% in 2026 on energy and services prices before moderating to roughly 2.7% in 2027.

The fiscal story is dominated by security. Lithuania currently allocates about 5.38% of GDP to defence and intends to hold between 5% and 5.5% through at least 2030 — among the highest ratios in NATO. That drives the public debt trajectory upward (from around 39.5% of GDP in 2025 toward the high 40s by 2027), but it also creates an enormous, funded, multi-year procurement pipeline that private suppliers can plug into. For an investor, defence spending is not an abstract risk line; it is demand.

Foreign investment has shifted in character rather than volume. In 2025, Invest Lithuania confirmed 31 FDI projects expected to create 2,139 jobs with €196 million committed to fixed assets — fewer projects than in earlier years, but larger and more capital-intensive, closing a five-year period in which the country crossed the €1 billion mark in attracted FDI capital.

Setting up: what company formation actually involves

The standard vehicle is the UAB (uždaroji akcinė bendrovė), a private limited company. The key parameters:

• Minimum share capital of €1,000, reduced from €2,500 on 1 May 2023. It stays in the business as working capital rather than being paid away.
• State registration fee of roughly €31 at the Centre of Registers.
• Registration in about one to three business days once documents are signed.
• 100% foreign ownership permitted, with no local partner requirement and no nationality or residency requirement for shareholders or the director.
• Remote incorporation is possible via power of attorney executed before a notary in the founder’s own country, though foreign documents may need apostille or legalisation.
• A Lithuanian registered address is mandatory.

The lighter MB (small partnership) form requires no share capital and suits solo founders, but it is capped at ten members and only natural persons may join — which is why international groups almost always default to the UAB. A branch of a foreign company is also possible, but it is not a separate legal entity and the parent carries the liability.

Where things slow down is banking and beneficial ownership. A clean file, a coherent commercial story and properly evidenced UBO data matter more than the incorporation mechanics.

The 2026 tax reform and what it means in 2027

Lithuania’s parliament adopted a broad tax package effective 1 January 2026, driven primarily by defence funding needs. The headline points:

• Standard corporate income tax rose from 16% to 17%. The reduced rate for small companies (under €300,000 annual revenue, fewer than ten employees) rose from 6% to 7%.
• The 0% rate for newly registered small companies was extended from one year to two — a genuine incentive for early-stage ventures.
• Instant depreciation was introduced: the full value of qualifying fixed assets such as machinery, equipment, software, computer hardware and freight vehicles can be written off in the year of purchase, provided the asset is used in the business for three years. For capital-intensive entrants this is the single most valuable change in the package.
• Loss carry-forward was capped at 70% of taxable income in any given year.
• A deduction of up to €2,500 per year is available for scholarships paid to students in science, technology, engineering and mathematics.
• Credit institutions face a surtax, taking their effective rate to 22% on profits above the €2 million threshold.

VAT remains at 21%; personal income tax runs on a 20% / 25% / 32% progressive scale. A rising share of corporate tax revenue is being channelled into the State Defence Fund — from 1.9% in 2025 to 8% in 2026 and 11.2% from 2027 — which is worth understanding as context for why rates moved and why they are unlikely to move much further in the near term.

Even at 17%, Lithuania remains competitive within the EU, and the combination of a moderate rate, full expensing for equipment and a mandatory audit environment makes Lithuanian entities relatively easy to defend in controlled-foreign-company analysis in shareholders’ home jurisdictions.

The Investment Highway: the differentiator

The most consequential policy change for large investors is the Investment Highway, which entered into force on 1 November 2025. It compresses the pre-construction phase for qualifying projects by up to 90% — projects can move from decision to construction roughly twice as fast as before, with construction able to begin immediately after publishing a construction notice, while environmental assessment requirements remain in place. The government’s stated target is to attract €10 billion in investment by 2030.

This matters most for data centres, manufacturing plants and energy projects, where time to market is the binding constraint. Combined with seven free economic zones offering corporate tax relief and ready industrial land, it gives Lithuania a permitting proposition that most of Western Europe cannot match.

Where the 2027 opportunities are

Defence and dual-use manufacturing. This is the clearest structural growth story in the region. Rheinmetall’s ammunition plant, the Leopard 2 A8 infrastructure agreement with KNDS and the €300 million Vytis initiative launched by the Ministry of National Defence anchor a supply chain that will need components, precision engineering, electronics, logistics and services for a decade. Lithuania has also raised over €362 million through retail defence bonds since 2024 — an indication of how deeply the funding model is embedded.

Fintech and payments. Lithuania is the EU’s largest fintech hub by number of licences issued, with roughly 248 companies and close to 8,000 professionals, and sector revenue grew nearly fourfold between 2020 and 2024. More than 260 payment and electronic money institutions hold a Bank of Lithuania licence. The MiCA regime has extended that pull into crypto-asset services — Robinhood took its MiCA licence here, alongside names such as Checkout.com, Revolut and Nuvei, and global fintech Aspora selected Vilnius as its EU base in August 2026. Note that supervision has tightened considerably; a licence application in 2027 requires real local substance, staffing and AML capability, not a shell.

Data centres and energy. Around 76% of Lithuanian electricity now comes from renewable sources, with a commitment to reach 100% by 2028, and green certificates are available for attribution. The Kruonis Energy Park offers 75 hectares of ready-to-build greenfield adjacent to the 900 MW pumped storage plant, with near-term access to 100 MW expandable toward 1 GW, low-latency fibre to Stockholm, Frankfurt and Amsterdam, and free economic zone benefits through Kaunas FEZ. Lithuania’s grid synchronised with continental Europe and its energy dependence on Russia has ended.

Life sciences and biotech. A long-standing strength built on the laser and biotechnology research base, with personalised medicine and biomanufacturing identified as priority growth areas.

Business services, ICT and advanced manufacturing. Over 1,000 startups, home-grown unicorns including Vinted and Nord Security, and multinational service centres operating in more than 20 languages. Recent expansions by Bentley Systems and KAYAK point to continued depth in AI and engineering talent.

Construction and infrastructure. Output is forecast to grow 4.5% in 2026 and to average around 4.2% per year from 2027 to 2030, driven by transport infrastructure and energy investment, Klaipėda port capacity expansion and TEN-T road projects.

Risks worth pricing in

• Lithuania borders Belarus and Kaliningrad. This is priced into insurance and into some boards’ risk appetite, and it is also precisely why defence and resilience spending is so high.
• FDI screening is broadening. Investments touching national security sectors already require clearance, and a registered amendment proposes adding agriculture and food as strategically important. Screening should be factored into deal timelines early.
• Labour costs are rising. The minimum wage increased roughly 11% in 2026 and real wages continue to grow. The cost advantage over Western Europe is real but narrowing.
• Financial supervision is demanding. The Bank of Lithuania has raised the bar substantially for payment, EMI and crypto-asset licences.
• Fiscal pressure. Deficits widen toward 2.7% of GDP in 2027 and debt is climbing, largely due to pre-financed defence expenditure.

A practical sequence for 2027

Decide first whether you are a talent play, a licence play or a capital-asset play — the three have completely different critical paths. Talent projects should start with location and recruitment; licence projects should budget twelve months and real local hires; capital projects should engage Invest Lithuania and assess Investment Highway and free economic zone eligibility before selecting a site. In every case, model the 17% rate alongside instant depreciation rather than looking at the headline rate alone, and build the banking and beneficial-ownership file in parallel with incorporation rather than after it.

Lithuania in 2027 is not the cheapest country in Europe, and it stopped competing on that basis some time ago. What it offers instead is speed, EU access, clean and abundant power, a genuine licensing ecosystem and a state that has aligned its industrial policy with the largest funded spending programme on the continent.

 

Prepared by pfser.com — Private Financial Services, advising international clients on company formation in Lithuania, corporate structuring, licensing and bank account opening.

Information is current as of publication and is provided for general guidance only; it does not constitute legal or tax advice. Several measures described remain subject to the legislative process.

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