- Overview: Lithuania
- Global HR Compliance
- Global PEO and payroll
- Work Permit for Hiring Expats via PEO
- Contractor vs. Employee: Which Is Better?
- Expand without a Company Set Up
Global Expansion Guide: Avoid Risks & Grow Faster Without a Company Set Up in Lithuania
Become an international business and gain a presence in Lithuania, avoiding the risk or expense of setting up a company.
Hiring local workers can also be challenging if you want to expand your business into Lithuania. Many legal requirements for employment are unique to this country, and navigating the process can be daunting if you’re unfamiliar with them. That’s where global PEOs (Professional Employment Organizations) come into play.
With PEO partners, you reduce administrative time, legal issues, and financial concerns of setting up a legal entity in Lithuania; or the hassle of achieving tax residency status and banking in a foreign country. Pairing with global employment experts, your project eliminates unnecessary work and gives you access to a scalable workforce — so why not make things easier with some HR operations outsourcing? Global professional employer organizations (PEOs) can help you minimize the risk of getting caught up in potential legal issues while expanding your company in Lithuania.
Global PEO & EOR Partner in Lithuania — the Right Choice for International Expansion
At Acumen International, we are committed to helping businesses expand their operations worldwide. With our expertise in global PEO and EOR services, we can help you conquer new markets and achieve your business goals.
Our EOR service is ideal for companies looking to expand into Lithuania or other European countries. With our help, you can gain access to a skilled workforce, local knowledge, and competitive pricing. We understand that every business is different and has unique needs, so we provide customized solutions for every client. We specialize in payroll processing, tax reporting, benefits administration, and business immigration support.
Our PEO and EOR solutions are ideal for companies expanding into Lithuania or other European countries. With our help, you can gain access to a skilled workforce, local knowledge, and competitive pricing.
Learn How You Can Expand Your Business Globally Through Employment Fast, Easily, And Risk-Free!
Permanent Establishment Risk: Addressing the Concerns
You may think you can get away with conducting business overseas without registering a legal entity, but you would be wrong. You might need to register your business even if you're only sending an employee on a temporary assignment or establishing a small promotional office. Failing to do so can result in severe consequences.
Different countries have different laws regarding taxes, and a multinational company must take all of these into account when conducting business. The tax authorities of a particular country can determine which elements of the company's economic activity take place in a particular country and how much profit is attributable to them. This can be a complex process, but ensuring that the company complies with all applicable laws is essential.
Flying Under the Radar of Local Tax Authorities in Lithuania
An organization's physical presence in a country over a sustained period can trigger a taxable presence, or a "permanent establishment" (PE), in that country. This may occur if the organization generates revenue directly from activities in that country or if the organization's activities contribute to the revenue of a group entity in that country.
As an organization operating overseas, it is important to be cautious of triggering a Permanent Establishment (PE) under local laws, as this can expose your company to unexpected tax liabilities, fines, and reputational damage. Failure to properly register a PE can have serious consequences for your business, so it is important to understand the requirements of each country in which you operate.
Although the Organisation of Economic Co-operation and Development's (OECD) base erosion and profit shifting (BEPS) project has had many far-reaching outcomes, one of the most significant is the modification of the definition of a permanent establishment. This change has important implications for businesses operating in multiple jurisdictions, as it may affect their tax liability.
The OECD is using Action 7 of BEPS to tackle common tax-avoidance strategies used by multinational corporations to avoid paying taxes in the countries where they do business. The organization is trying to stop companies from sidestepping local tax authorities by establishing related distributors rather than agencies or commissionaires.
Triggering Permanent Establishment Risk
A business is taxed based on the geographic location of its income-earning activities. To ensure Fair Taxation of the Digital Economy, on 21 March 2018, the European Commission proposed new rules to ensure that digital business activities are taxed in a fair and growth-friendly way in the EU. The penalties for noncompliance are steep (20% penalty on top of the 3% tax, plus fines).
As businesses look to expand into new markets, they must be aware of their tax liability in each country where they have a customer base. They must also be aware of the compliance obligations in each country where they sell their products.
Suppose you are selling digitally and don't already have this in-house expertise or don't work with a global PEO & EOR partner. In that case, you need to start thinking about how to address this challenge immediately.
As it turns out, the trigger of a taxable presence in another country is not just an abstract challenge but a real non-compliance risk. Business in another country can come with hidden risks - like inadvertently triggering a taxable presence.
Acumen International has experience dealing with this problem – we were approached by a client who had unwittingly violated PE laws abroad. Two of the company's employees were placed in one of the EU countries, working from home. However, since they weren't generating much revenue directly in that country, the company decided to do their payroll registration instead of registering a full corporate legal entity.
One year after, the local state tax authorities came knocking to say that an employee's job title containing the word "sales" meant the company should have registered in-country as a business, resulting in higher employer payroll taxes. In the end, the company owed over €20,000 in back taxes and fines.
Non-compliance with local PE requirements can produce dire consequences for businesses. The company took steps to try and mitigate the damages, but the message is still pretty clear: adhere to the requirements or face some serious repercussions.
Make a Rapid Market Entry with a Global PEO
The time and cost of setting up a local office in Lithuania can be an obstacle to market entry. Furthermore, some legal requirements and unique circumstances may prevent your global operations from being carried out in a prescribed way. Acumen Global’s professional employer organization (PEO) provides international companies escaping these problems with legal and compliant PEO (Professional Employer Organisation) and EOR (Employer of Record) solutions that cover all global employment-related issues, from compliance with local laws to taking care of your workers’ wage payments, benefits, and social security contributions.
Fully Compliant Employment Contracts in Lithuania
Acumen International has gained a reputation as one of the most effective PEO and EOR solutions provider in Europe.
Suppose you plan business operations in Lithuania or the EU. In that case, you will inevitably need help creating employment contracts for your business in Lithuania, or you want to learn about Lithuanian tax schemes, Acumen can provide comprehensive legal advice. Our service includes optional consulting, such as legal assistance with employment contract creation, according to Lithuanian law, mandatory employee benefits, vacations, social security contributions, tax deductions and withholdings, and more. By partnering with Acumen, you reduce your dependence on local infrastructure and experts in these areas. Additionally, we offer assistance with other services that can reduce your expansion costs by 90% and hiring time by 80%.
Risk-free Business Expansion to Lithuania
The Lithuanian market provides various opportunities for businesses looking to expand their reach. However, there are also many challenges for companies considering Lithuania for expansion. The tax and employment law laws in Lithuania can be complex, so businesses must pay close attention to the intricacies of these laws.
Extra care must be taken when looking to expand into Lithuania because mistakes such as payroll missteps can result in heavy fines and penalties. If your company is serious about entering the Lithuanian market, we suggest outsourcing your global employment functions to our Global PEO services. We can provide all the expertise you need to know all the ins and outs of operating in Lithuania.
With our support, you can focus on growing your business while we handle your HR functions. We have experience dealing with challenging employment problems, so contact us today if you prefer not to worry about legal issues concerning employment.
You will have peace of mind knowing we have employees that work well together. You don’t have to worry about legal hassles or other complicated HR or immigration concerns that might slow your growth in Lithuania.
Global PEO Services – 100% Global Employment Compliance in Lithuania
When you need to hire in Lithuania, the challenges are many. You need to understand local laws and regulations, navigate a new country’s tax code and navigate foreign language barriers. You also must maintain compliance with the Lithuanian immigration rules and regulations while ensuring that your business complies with local labor laws in Lithuania. Complying with so many nuances makes hiring top talent in Lithuania is challenging.
We give you one point of contact and full visibility into HR compliance. Global PEO Services offers compliant global employment solutions for startups, SMBs and Fortune 500 companies operating in 190 countries. We employ various workforces such as manufacturing, administrative, and IT specialists to help customer organizations operate successfully around the world.
Legal Guidance by Acumen Global PEO Experts in Lithuania
As a business owner operating across national boundaries, you must be aware of the employment-related aspects of business in a foreign country. There are multiple layers of regulation governing employee activities, which can be costly and time-consuming to navigate, particularly for small businesses. Ensuring the correct application of these laws will help reduce your company's risks and costs – and ensure that you comply with the labor regulations.
Acumen provides business advisory services to companies planning to expand into the Lithuanian market and assists global organizations in setting up, maintaining, and transitioning their operations in Lithuania.
Lightweight Expansion to Lithuania. No Entity Required
Expanding your business overseas can be stressful for any company, especially for new and small businesses. Hiring international employees requires you to be familiar with all local employment laws, tax calculations, and resident authorizations to run a successful business. In turn, this leads to more than just high expenses, but also creates additional work for your accounting, legal, and HR departments.
With Acument Global Employment Solutions PEO, you can hire employees from anywhere worldwide within 72 hours. Acumen International PEO offers a complete global employment solution for businesses looking to expand overseas. By partnering with us, you can avoid setting up local entities and hiring employees locally, saving you from risks associated with employment laws and taxation in Lithuania.
Comprehensive EOR & PEO Packages and Budget-friendly Rates
Acumen International can offer secure, efficient global HR services to manage Global Payroll, HR & Benefits Administrations for businesses that need international talent but don’t have the resources or skills to handle it themselves.
Acumen International’s full-service solutions cover every area of EOR and PEO requirements — payroll administration, benefits such as health and life insurance, or complex legal talent arrangements — we handle the legwork to ensure your business complies with all regulations.
Acumen International’s unique and integrated approach allows us to offer a comprehensive array of EOR functions, including:
- Processing Immigration requirements
- Visa applications & extensions
- Work permit sponsorships
- Streamline onboarding, benefits, payroll, PTO
- Local labor law compliance
- Audit-proof compliance requirements
- Employee benefit management
- Handling employment contracts, terminations, and compensation
- Processing medical insurances and benefits
- Payroll, including year-end tax statements
- Relocation services & housing
- Benefit management
- Special needs or requirements
- Multi-country employment without limitations
- Handling contract worker and ex-pat workforce management
- Compliant employment or termination within 72 hours.
Learn How You Can Expand Your Business Globally Through Employment Fast, Easily, And Risk-Free!