Workforce Payments Guide Lithuania

Last updated: Dec 18, 2023

Currency
Euro (EUR)
Payroll Frequency
Monthly
Capital
Vilnius
Fiscal Year
1 January - 31 December
Employer Taxes
Unknown
Employee Costs
26.48%
Central Bank
Bank of Lithuania
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3rd Party Payments

Authority  Payment Frequency  Due Date  Payment Method 
Corporate Income Tax (CIT)  Annually  15th day of the sixth month of the following tax period  SEPA and international wire 
CIT Advance Payment  Semi-annually  15th day of the third and ninth month of the tax period  SEPA and international wire 
Withholding Tax (WHT)  Monthly  15 days after the end of the month in which the amounts were paid  SEPA and international wire 
Social Security  Monthly  15 days after the end of the month in which the amounts were paid  SEPA and international wire 

Payments Coverage

Papaya Global fully supports workforce payments in Lithuania.

Contractor Payments

Papaya Global supports payments to contractors in Lithuania. The payout currency may vary based on the receiver bank account setup when receiving foreign currencies. Contractors are advised to reach out to their bank to confirm how foreign currencies are handled.

Payroll Frequency

Monthly

IBAN

IBAN Example Lithuania LT708954435138481278
IBAN in print LT70 8954 4351 3848 1278
Country Code LT
Digit Code 70
Bank code 89544
Account Number 35138481278

KYC

In Lithuania, the Know Your Customer (KYC) process is an integral part of Customer Due Diligence (CDD) and is framed within the broader Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) framework. The AML Law outlines the information that businesses should obtain from natural and legal persons for their identification and verification. For natural persons, this includes their name, surname, personal number, place and date of birth, as well as information on their residence permit. For legal persons, the required information includes their name, legal form, registered office, UIC/LEI, and the names of the management board members. Businesses also need to identify their beneficial owners, who are persons owning more than 25% of a company’s capital/voting rights or who exercise ultimate control over it.

The KYC process can be performed remotely through methods such as using verification data from other institutions, remote verification solutions, obtaining a qualified electronic signature, verifying documents via a video call, or ensuring the first payment comes from a linked account. Financial institutions must perform Customer Due Diligence (CDD) and, in certain cases, Enhanced Due Diligence (EDD) to assess potential risks effectively.

Financial and credit institutions, in collaboration with the Financial Crime Investigation Service, the Bank of Lithuania, and legal experts, have developed common guidelines of good practice for customer due diligence to harmonize preventative measures and simplify processes for users of financial services. These guidelines are regularly updated and supplemented as legislation changes.

Lastly, KYC in Lithuania involves constant collection, monitoring, and updating of information about customers and their payments. Financial institutions must provide clear and individualized requests for customer identification information and inform their customers why they are requesting certain information and documents. The Bank of Lithuania suggests using individual questionnaires for certain user groups to collect and maintain customer personal data.

Banking Regulations

Country-specific banking laws and regulations that impact cross-border workforce payments.

Opening a Bank Account

The process of opening a company bank account in Lithuania involves several steps:

  1. Prepare founding and other required documentation: This includes articles of association, a founding agreement, proof of a Lithuanian business address, and details of an appointed general manager.
  2. Optionally register a temporary company name: You may decide to take an optional step and reserve a temporary company name at the State Enterprise Centre of Registers, which remains reserved for 6 months.
  3. Submit an application: Either submit an online application on a bank account provider’s website or arrange a formal meeting with provider’s representatives.

Once your accumulative bank account is open and the authorized capital is transferred over, you may notarize your founding documents at a registered notary’s office in Lithuania. After notarizing your documents, you can register a company with the State Enterprise Centre of Registers in Lithuania and to consequently request your bank account provider to convert your accumulative account into a settlement account for regular commercial operations.

Please note that the application processing time is usually dependent on the availability of online services, the complexities of your business model, and supply of the mandatory documents.

International Banks

The major foreign banks operating in Lithuania are:

Swedbank AB and AB SEB bankas, both headquartered in Sweden. Other foreign banks include Revolut Bank UAB, a subsidiary of Revolut Ltd headquartered in the United Kingdom, Citadele Bankas AB, and Luminor AB.

 

Major Local Banks

The major local banks operating in Lithuania are Swedbank, SEB bank, Luminor, Šiaulių bankas, Medicinos bankas, and Citadele.

Payment Tools

The B2C payment tools available in Lithuania include all credit and debit card types, a wide range of e-wallets, vouchers, instant bank transfer, mobile solutions, contactless card payments, instant credit transfers, payment initiation services (PIS), remote card payments, Bank Link (redirected ‘on-us’ credit transfers), Single Euro Payments Area (SEPA) Instant Credit Transfer (SCT Inst), dedicated IBANs (SEPA, SEPA Instant, SWIFT), and banking APIs.

Several specific payment tools are also used, such as 2Checkout, Alipay Wallet Payments, Authorize.Net, IBEX PAY, Bitcoin Payments, Ifthenpay, kevin. Payment Gateway, Maxpay Payments, Mobipaid, Mollie Payments, Montonio Payment Solution, MultiSafepay, Partially Payment Plans (offers payment installments), Pay with Xumm (XRPL), PayPal Checkout, Paysera, Plisio.

Accept payments in cryptocurrencies, QuickPay Payments, Rapyd Payments, Revolut, Stripe, and Zapper: Mobile Payments.

Cryptocurrency

It is possible to pay employees with cryptocurrencies in Lithuania. According to Article 139(3) of the Labour Code of the Republic of Lithuania, virtual currency is considered as money and therefore can be used as a form of payment. However, all benefits paid to the employee in virtual currency are considered to be work-related income from which the employer must calculate, pay, and declare income tax. The transaction must be recorded both as the payment of the purchased good or service and the purchase/sale of assets (virtual currency) at the rate of exchange at the time of the transaction. The virtual currency must be converted to euros at the market exchange rate prevailing at the time of accrual.

In addition to this, companies engaging in crypto-related activities and employing people are subject to paying the State Social Insurance, as part of the payroll taxes.

Furthermore, the regulation of cryptocurrency activities is under the authority of the Financial Crime Investigation Service (FCIS). Companies need to comply with the requirements established by law and obtain special permits to carry out relevant activities.

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