Practical Aspects for Foreign VCS Investing in Lithuania

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Lithuania is becoming more and more attractive to foreign investors not only because of the country’s startup-friendly regulatory environment, but also because of the increasing potential growth of the startups. During the past few years Lithuania has become one of the leading countries in Europe in terms of the rapid growth of startup ecosystem in which the number of startups has already exceeded 1000. Moreover, Lithuania is in the 11th place globally in the World Bank’s Doing Business Report. So here are some practical aspects that could help reach a better understanding of the startup ecosystem in Lithuania. 


In the late-2021 Lithuania has more than 1000 startups registered by Startup Lithuania. The most popular sectors for Lithuanian startups by industries are Fintech, Enterprise software, Transportation, Health and Marketing. In Lithuania, the majority of startups are located in the capital, Vilnius – 68%, in Kaunas – 13%, and in Klaipėda – 3%.

The year 2021 was extremely successful for startups as they have attracted a record amount of more than EUR 420 million in investments from foreign and Lithuanian investment funds, and 61% of Lithuanian startups have more than doubled their turnover. This year, in the Startup Blink’s ranking of startup ecosystems, Lithuania was ranked 16th in the world, 2nd in the Eastern European region, and in the Startup Genome ranking, we moved up 60 positions.[1]

According to the data of Versli Lietuva, the total sales of Lithuanian startups in the first half of 2021 reached EUR 1.33 billion, which is a 162 per cent, i.e. 2.6 times increase compared to the same period in 2020. Exports of high value-added goods and services, created by Lithuanian startups in the first half of this year, performed even better, reaching EUR 966.8 million, up by 192 per cent, or 2.9 times, compared to the first half of 2020. It shows that the startup ecosystem is increasing in Lithuania despite of the situation caused by pandemic.


Investment in Lithuanian startups has made huge milestones over the last decade. From a very few players on the market, Lithuania now has its first unicorn – Vinted and other fast-growing number of so-called rising stars, companies that show the growth of a potential future unicorn such as TransferGo, Interaction, kevin, Tesonet, Kilo Health and many others. Lithuania is developing a healthy ecosystem that supports startups from pre-seed and seed rounds (mostly accelerators, business angels) up to B and C rounds (larger VCs and PEs).

There are a variety of accelerators and incubation centres in Lithuania helping founders to transform their ideas into businesses. For example, Startup Wise Guys70 VenturesBaltic sandbox,  Katalista Ventures, etc. Some of them also offer startups investments and participate in the following investment rounds together with business angels and VCs.

One more organization operating in Lithuania is Lithuanian Business Angel Network LitBAN, which fosters business angel activities through communication, events, networking, syndication of deals both locally and across Nordics by uniting wealthy individuals, successful entrepreneurs and executives who are curious about angel investing activities, are interested in sharing their knowledge and network with new entrepreneurs. LitBAN has broad knowledge about local and nearby teams that are fundraising; therefore, it is useful for smaller VCs, investing in very early stages (pre-seed and seed), to join the association. Business angels also actively syndicate to reduce the costs and the names in the CAP table, so partnering up with a syndicate could be a practical way for an early-stage VC in getting into a pre-seed or seed round. A useful statistical summary, prepared by Change Ventures, on the funding characteristics in the Baltics on pre-seed, seed and A rounds can be found at this link:


There are a variety of events in Lithuania dedicated to showcase the Lithuanian startup scene. Startup Fair in Vilnius, organized by Startup Lithuania, is the biggest event of the year. There is also a number of sector specific events that unites together both Lithuanian and foreign participants, for example the fintech event Fintech inn, which took place in autumn 2021 and was organised by the Ministry of Economy and Innovation, Ministry of Finance, MITA. Such events bring together startups, investors, and other market players all over the world, foremost from the Baltics and the Nordics.

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The general principles of the investment documents as well as shareholders agreements in Lithuania are very similar to the rest of the world. However, every country has its own legal aspects and Lithuania is not an exception. Taking into consideration that young businesses are cost-sensitive and having the aim of harmonizing the investment processes, Startup LithuaniaVienaragiai LTand Lithuanian Private Equity and Venture Capital Association introduced a high-quality model legal documents for startups which were prepared by the biggest Lithuanian law firms, including TRINITI JUREX. Free document package is available on the website of Startup Lithuania. The package of legal documents consists of: Agreement of Incorporation; Articles of Association; Employment Contract; IP Assignment and Licence Agreement; List of Confidential Information; Non-disclosure Agreement; Option Agreement; Privacy Policy; Shareholder’s Agreement; Share Subscription Agreement; Simple SPA template. As can be seen, the list of the model documents includes not only investment documents but also documents of daily use. 

Therefore, in the majority of cases, it makes sense for the foreign VCs to use these templates in the early stage as the base for making the investment instead of using the VC’s own template. The legal cost for amending the templates (basically taking out bits which are not necessary and adding bits where needed) is usually considerably lower compared to modifying a foreign VC’s own templates to suite the Lithuanian laws.

Shares. The most popular legal type for a company in Lithuania is private limited liability company (UAB or Uždaroji akcinė bendrovė in Lithuanian). It is a legal person with limited civil liability therefore the company is liable for its commitments only with its assets, not the shareholders’ assets. The minimum capital of a private limited liability company is EUR 2,500 and in most cases the capital is divided into 2,500 shares with the nominal value of EUR 1 per share. In the later investment rounds the size of the capital is getting higher but the nominal value per share usually does not change. Each share grants one vote in the general shareholders meetings, so the shareholder with the most shares has the highest influence when voting at a general meeting. 

Governing bodies. Majority of the Lithuanian startups operate only with a single management body – manager of the company (director), and do not have a board. The manager of the company is the sole representative of the company in all transactions and can sign documents and transactions on behalf of the company. However, if the shareholders decide to form a board, it should consist of minimum 3 members elected for maximum 4 years’ tenure. In most cases the board members are delegated by both the founders and the investors in order to secure their interests. 

Ways of registration

Via electronic means. Issuance of shares of a private limited liability company does not require notarisation only if the shareholders agree to use a standard form of the articles of association, automatically generated by the Register of Legal Entities. For example, in case of an equity investment in a pre-seed round when the investors and the founders have not agreed yet on a complex management and structural issues, the standard form of articles of association might suffice. In this case the only steps an investor needs to perform for subscribing the share(s) are to sign the share subscription agreement and transfer the funds to the company’s bank account. After the funds have credited in the company’s bank account, the company will file an application to the Register of Legal Entities and the new share capital will be registered. 

Via notary publicIn order to define certain management, decision-making and voting arrangements, shareholders (both the investors and the founders) include it not only in the shareholders’ agreement but also in the articles of association. In this case, the standard articles of association would not suffice; therefore, in order to issue additional shares, the company will not be able to use the electronic form as the articles of association will have to be approved by the notary and submitted to Register of Legal Entities. 

Requirements for signature. In case an investment round includes foreign investors/shareholders and all parties are willing to sign the documents by e-signatures, it is customary that the electronic signatures are qualified and comply with the e-DAIS regulation. However, in order to submit the documents to the Register of Legal Entities electronically, the documents must be signed by using program.


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