IMPORT-EXPORT BUSINESS
Import-export business is one of the main forms of international trade, involving imports (buying goods or services on foreign markets) and exports (selling goods or services abroad). It is a dynamic business that requires a deep understanding of the market, flexibility and the ability to adapt to constantly changing conditions Import-export business involves a variety of activities, depending on the type of goods or services, the specificity of the markets and the nature of the activity. The directions in import-export business can be defined according to the type of goods (raw materials, finished products, foodstuffs, technology, etc.), according to the business model (direct or indirect import-export, dropshipping model), according to the origin or destination of the goods (exports to developing countries, imports from Asian markets, niche markets, etc.), etc.
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IMPORT-EXPORT BUSINESS IN LITHUANIA AND ITS DEVELOPMENT IN THE EU
Setting up a company
We can offer you to buy a new company with an existing name, or set up a new company with a name of your choice. We will offer you the most popular legal forms in Lithuania – Closed Joint Stock Company (UAB) or Small Partnership (MB). We will prepare all incorporation documents, provide a legal address, etc.
Opening a bank account
We can help you open a bank account in both Lithuania and Poland. We will take care of both the preparation of documents and their translation into the required language (if needed). We will ensure smooth communication with bank representatives.
VAT registration
VAT registration is generally required for import-export activities. We can assist you in the VAT registration process or we can offer you to purchase a company with a valid VAT number.
EORI code
This code is intended for legal persons and sole traders carrying out import, export or transit operations with non-EU countries. The EORI code is used in customs declarations, transit documents, international shipping documents and trade operations involving third countries. We can take full care of obtaining an EORI code for your company.
Licences and permits
Depending on the nature of the goods being imported or exported, special licences or permits may be required. We will help you assess which permits or licences are required for your business, depending on the nature, origin, destination and end-users of the goods you are importing/exporting.
Warehousing services, excise warehouses
There are a number of companies providing warehousing services in Lithuania, including excise warehouses for the storage of excisable goods such as alcoholic beverages and tobacco products. We will offer you the best warehousing service provider among our partners based on your needs and help you to agree on the terms and conditions and the organisation of your operations.
Customs broker services
Customs brokers in Lithuania provide professional services to help companies and individuals efficiently complete customs procedures for importing, exporting and transiting goods. Their services include completing customs declarations, preparing documents, customs representation and customs advice. We will match your needs with the best customs broker among our partners, helping you to negotiate terms and conditions and to organise your operations.
Bookkeeping
According to the Law on Accounting of the Republic of Lithuania, all companies are required to keep accounting records, regardless of the nature of their business. Thus, import-export companies are also required to keep records of primary documents, tax records, financial statements, customs procedures, etc. We can offer you a complete package of accounting services. Professional accounting experts will take care of your company’s recruitment, tax accounting, advise you on the organisation of your company’s internal processes, etc.
ADVANTAGES OF THE TAX SYSTEM
1. Competitive corporate taxes: the standard corporate tax rate in Lithuania is 16%, but the rate can be reduced to 6% for small companies that meet certain criteria. This lower rate can be particularly attractive for small and medium-sized businesses, including import-export activities. Here, I think we should put it as in the article, maybe 15% (from 2025 it will be 16%), 5%, and from next year to 6%.
2. VAT system: the rate of Value Added Tax (VAT) in Lithuania is 21%, but when exporting goods to other countries, VAT can be zero, which means that companies can avoid paying VAT on their exports. When importing goods into Lithuania from other EU countries, there is a reverse charge system, which allows you to defer paying VAT until the goods are sold.
3. Free Economic Zones (FEZ): there are several Free Economic Zones (FEZs) in Lithuania, where companies can benefit from additional tax incentives. LEZ companies can benefit from a tax holiday on corporate income tax for up to 10 years, as well as reduced or even zero tax rates on land and real estate. This is particularly attractive for companies planning long-term investments in import-export activities.
4. Double tax treaties: Lithuania has signed double tax treaties with a number of countries. These treaties allow the avoidance of double taxation of profits or income, which is important for companies operating in international markets. Under many bilateral agreements, the amount of tax can be reduced in one of the countries or the income can be taxed in only one country.
5. A transparent and stable tax system: in Lithuania, the State Tax Inspectorate is the main tax administration body. Despite the annual tax changes that take place from year to year, Lithuania’s tax system is relatively transparent and stable, which enables companies to plan long-term strategies and investments knowing that tax policy is unlikely to change drastically in the short term.
6. Innovation incentives: companies investing in research and experimental development (R&D) are also eligible for tax incentives, which can benefit companies seeking to develop innovative products for international markets.
UNIQUENESS OF IMPORT-EXPORT ACTIVITIES
International scope
- Operating between different countries requires an understanding of foreign markets, cultures, legislation and economic conditions;
- It allows companies to participate in the global market, to take advantage of international trade and to expand their activities beyond national borders.
Ensuring availability of products and resources
- Imports provide access to goods or raw materials that are scarce on the domestic market or that are produced more cheaply and efficiently in other countries;
- Exporting allows companies to find new markets for their products and services, thereby increasing sales and revenues.
Economic utility
- Import-export business boosts a country’s economy by contributing to foreign exchange earnings, job creation and technological development;
- Helps diversify risk by generating income from different markets.
Ability to connect markets
- The import-export business is a bridge between producers and consumers in different parts of the world;
- This business offers the opportunity to establish partnerships with international suppliers, customers or intermediaries, creating a larger market size and increasing competition at international level.
Complexity and challenges
- Legal and regulatory requirements: customs rules, licensing processes, quality certification and other international trade requirements;
- Cultural differences: business requires understanding and adapting to different cultural and consumption patterns.
Competitive advantage
- Import-export companies can offer unique products or better prices because they operate in a global market;
- They often have access to the latest innovations or specialised goods that are not yet widely available in local markets.