One of the most effective ways to open a Lithuanian business is to acquire an existing firm. This legal procedure can be conducted by proxy without the necessity to move to the country. Also, if a businessperson decides to buy a ready-made company in Lithuania, there is no requirement to place seed money (which constitutes 2,500 EUR) as it already has a formed structure. It is often the case that Lithuanian non-residents prefer this option of company formation to avoid red tape and long processes of starting from scratch.
Purchasing an existing business
Ready-made, also referred to as shelf company, means a formed LLC or partnership that is not active, so to say “put on the shelf to age or being like an empty shell”. In the majority of cases, shelf companies register for value-added tax.
The pros of buying such company are as follows:
- Time efficiency.The process of setting up a firm from zero needs a lot of time. Speeded-up formation counts for more due to costly fees established by the government. Therefore, it makes sense to change the ownership of an operational business than pass the procedures of opening a new organization.
- Corporate longevity.The period that the firm has a market presence can offer a number of benefits in the activities you are considering starting. Some state programs set a term that a business is established for some time prior to permitting tenders. Also, some partners or financial institutions may look at the registration date prior to proceeding with interaction. Customers will rely more on an older company, which could be used, for example, for marketing.
- Business history.This aspect boosts a company’s image with age and betters credibility.
Process of purchasing a business
Buying a shelf company generally lasts only several days. The process of registering with Commercial Registry requires four days but can be reduced to two. The business longevity but not the name of the shell business is highly important since a name change can be quickly accomplished. In terms of address, it is obligatory in the Lithuanian jurisdiction. Its change or establishment of a new office normally lasts up to four days or it can be executed simultaneously with a buyout.
Generally, the amount of shall companies with a VAT number is not traditionally set for sale. Therefore, the new businesspersons should take into consideration possible increases in the price for VAT-registered companies.
Please contact ELI Lithuania for more details, and we will offer a comprehensive solution grounded on your specific needs and expectations to purchase a ready-made company.