Create a company in Cyprus — or move your company from Lithuania

A Lithuanian founder comparing Vilnius with Limassol is comparing 17% with 15% at the company, and 29.45% with almost nothing at the shareholder. That second number is the decision. This is the departure side of a Lithuania-to-Cyprus move, written from the statutes rather than from summaries of them.

Updated for 2026 Cyprus tax law and regulations.

Lithuania to Cyprus, run end to end from one dashboard instead of four inboxes

Sumly is the one-stop, fully digitalized way to create a company in Cyprus, move a Lithuanian business onto it, and operate that business from the day the certificate lands. We register the company, open your books the same day you order, prepare every Cyprus return box by box, and deliver the Yellow Slip along with the tax residency and non-dom registration as fixed-price services. One partner, one dashboard, four published prices — instead of a Vilnius law office, a buhalterė, a Cypriot corporate agent and nobody at all holding the seam between two tax systems.

This is Sumly — and what we actually do for you

Sumly is the fully digital provider for founders moving a company to Cyprus. You do not need to learn Cypriot company law, find a local auditor, or work out which form goes where. You get in touch, and we do the rest.

And we stay with you on both sides of the move. The Cyprus side we own outright. For the side you are leaving, we put you straight in front of an adviser or lawyer from our network who works on exactly your problem — company law, exit taxation, inheritance, employment — and we hold the thread between them and us. One point of contact for the whole move, however many specialisms your case turns out to touch. If your case is simple, we do all of it for a fixed price.

Part 1: What leaving actually costs you

Your home country does not let go the moment the plane does. What still runs after you have left, and in which order it has to be handled.

Is Lithuanian corporate tax still 15%, and what changed on 1 January 2026?

It is not, and the number moved twice in two years. Lithuania charged 15% through 2024, 16% for the 2025 tax period, and now charges 17% on the taxable profit of a Lithuanian entity for tax periods beginning on or after 1 January 2026. The amending instrument is Law No. XV-285 of 17 June 2025.

The commencement detail is the part that catches companies with an odd year-end. The tax authority's own change note states that the new rates apply to the 2026 tax period irrespective of the fact that the entity's tax period does not coincide with the calendar year. There is no transitional straddle to argue about.

Two things follow that most published comparisons miss entirely. First, the gap to Cyprus at 15% from tax year 2026 is two percentage points, which is nothing like the chasm a stale 15%-versus-12.5% article implies — so the corporate rate on its own is a weak reason to move. Second, three downstream Lithuanian thresholds are expressed as fractions of the headline rate and therefore moved with it: the controlled-foreign-entity low-tax line, the rate criterion that puts a country on the target-territory list, and the withholding rate on distributed profit. Every one of those is now computed off 17%, and we work through each below.

The rise was voted through as defence financing, which the Seimas said in as many words when it announced that corporate income tax is set to rise to 17%. Nobody can tell you what the rate will be in 2031. But a founder making a ten-year decision is entitled to weigh the direction of travel alongside the level, and the direction over the last two periods has been one point a year.

What does a Lithuanian founder actually pay to get money out of the company?

Twenty-nine point four five percent, and it recurs annually rather than once. That figure is the anchor of this whole page, and it is the number a Cyprus comparison actually turns on — not the corporate rate.

Take €100 of company profit. The company pays 17%, leaving €83. Distribute that to yourself and the personal charge on income from distributed profit is 15%, or €12.45. You keep €70.55. Stack the two and the effective combined rate from company profit to money in your hand is 29.45%.

There is a genuine piece of good design in there worth naming. Dividend income is charged at that flat 15% and is excluded from the annual income used to compute the progressive bands. So a founder who lives on dividends never touches the top rate however large the distribution. That is the mechanism keeping the answer at 29.45% rather than something considerably worse.

The progressive ladder still matters if you take salary. From 2026 it runs in three steps rather than two, expressed in multiples of the average national wage: 20% up to 36 average wages, 25% between 36 and 60, and 32% above 60. In euros for 2026 the authority publishes the average wage as €2,312.15 a month, putting the band edges at €83,237.40 and €138,729.00. The 25% middle band is new — an article describing Lithuania as a two-rate country at 20% and 32% is describing the position before this year.

There is also an annual tax-exempt amount, and it is worth knowing that it does you no good as a shareholder: the statute applies it only to income related to employment or relationships equivalent to employment. Dividends get none of it. We print no euro figure for it here, because the amount is driven by a minimum wage that re-prices annually and we could not confirm the operative 2026 number against the authority's current-year rate page.

Where does Lithuania genuinely beat Cyprus, and should you stay?

In three specific places, and if your plan is to build something and sell it, they are decisive. A guide that cannot say so has not read the Lithuanian statute.

A new company can pay nothing for two years. Taxable profit of the first and second tax periods is taxed at 0% where period income does not exceed €300,000, with 7% for other periods. The 0% window applies only where the participants are natural persons and where, across three consecutive periods including the first two, activity is not suspended, the entity is not liquidated or reorganised, and shares are not transferred to new participants. It was extended from one period to two for 2026. Watch the anti-fragmentation rule though: the relief drops away where the combined income of related entities exceeds €300,000, across four separate relationship tests. A founder with two companies usually fails it.

Lithuania has its own intellectual-property regime, at 7%. Nearly every comparison written for Lithuanian readers pitches the Cyprus IP Box as though there were no domestic alternative. There is: profit from the use, sale or other transfer of qualifying property is charged at 7%, where the income is received only by the entity that created the property, that entity bears all the related expenses, and the property is a copyright-protected computer program or a patentable invention protected by a patent issued by the European Patent Office, an EEA state, or a state with a double tax treaty in force with Lithuania. Cyprus goes lower — but as the controlled-foreign-entity section below shows, the Cypriot rate is low enough to attract a rule that the Lithuanian one never triggers, because you are already resident where the substance is.

A company sale after five years costs 15%, flat. Gains on shares acquired more than five years before disposal, sold outside an investment account, are taxed at 15% and stay outside the progressive ladder. For most founders the exit is the largest single number of their working life, and Lithuania handles it at a rate a lot of Europe would envy. Cyprus exempts qualifying securities outright, so the gap is fifteen points rather than thirty — and fifteen points on a one-off event has to be weighed against several years of actually living somewhere else.

Two smaller concessions. Inheritance tax exists in Lithuania, unlike in either neighbour, at 5% where the taxable value does not exceed €150,000 and 10% above it — but the exemptions are so wide that it almost never touches a family business. Property inherited by a spouse, and by children or stepchildren, parents or stepparents, guardians, wards, grandparents, grandchildren and siblings, is exempt regardless of value, with a €3,000 threshold for inheritances from anyone else. Succession is not a reason to leave Lithuania. And the tax authority is unusually legible: consolidated statutes in English, published change notes, and a synthesised treaty text showing exactly how the multilateral instrument reshaped the convention with Cyprus.

So the honest segmentation, on the first screen rather than buried: if you are building toward a sale in five or six years, Vilnius serves you well. If you are drawing money out of a profitable company year after year, 29.45% a year is the thing this page is about.

Does Lithuania charge an exit tax when you move to Cyprus?

Not on you personally. Read end to end, the Law on Personal Income Tax contains no deemed disposal on emigration, no exit-tax return, no bank guarantee and no deferral machinery — and the contrast with the corporate side is instructive, because the legislature clearly knows how to write an exit charge and wrote one only for companies.

What it does contain is a settlement duty that catches people out because of its timing. A resident leaving permanently must, prior to departure, file a departing-person income tax return, declare the income derived before the date of departure, and pay the income tax before the date of departure. Not by the following spring. Before you go. The same duty applies to a person treated as resident to the day of departure under the split-year rule, and the departing person's share of the tax-exempt amount is pro-rated under rules set by the Government.

Does the two-year residency tail in article 4(4) catch a move to Cyprus?

No — and understanding why is worth more than the answer, because the rule is severe, a typical reader of this page would meet its conditions, and the only thing standing between them and it is a ministerial list that can be amended.

Here is the machinery. Lithuania has genuine split-year treatment: a person resident for not less than three successive tax periods who departs permanently in the following period and stays under 183 days in it is a resident only until the day of departure. Clean, and better than several EU states where residence retroacts across the whole calendar year.

Then the exception. Where that same person departs permanently for a target territory and is related to Lithuania by significant commercial interests, the split year is switched off and they are treated as a Lithuanian resident for the entire tax period of departure and two subsequent tax periods, on worldwide income. Significant commercial interests are in place where the person owns an individual enterprise in Lithuania or controls over 25% of a Lithuanian entity, or where over 30% of period income is Lithuanian-sourced. A founder who owns most of a UAB and draws most of their income from it meets both limbs without trying.

So everything hangs on that one phrase. A target territory is a country or zone on a list established by the Minister of Finance, and a territory qualifies for the list on at least two of six criteria, the first being an equivalent tax rate below 75% of the article 5(1)(1) rate — which at 17% is a line at 12.75%. Cyprus at 15% sits above even that first criterion, and in any case the list is the operative document, not the criteria.

The current list was adopted by Order No. 1K-389 of 30 November 2023, in force from 1 December 2023, and it runs to 49 territories: the familiar Caribbean and Pacific micro-jurisdictions, the Crown dependencies, Gibraltar, Madeira and the Azores, the Russian Federation, and a scattering of others. Cyprus is not among them. Neither is Malta.

And now the trap, which is the reason so much Lithuanian-language content gets this backwards. Cyprus was on the original list, adopted by Order No. 344 of 22 December 2001, where Kipro Respublika appears alongside Maltos Respublika. Both were removed on EU accession. But the 2001 order is the original instrument, it sits at a stable, highly ranked address, and a reader who finds it and stops there concludes that Cyprus is a target territory for every Lithuanian rule that references the list. It has not been one for two decades. If you take one checkable fact away from this page, take that one — and check the current list yourself before you rely on it, because the whole benign answer below depends on it.

Cyprus's absence carries three consequences that are easier to see together than apart:

Do Lithuanian CFC rules catch a Cyprus company?

That depends entirely on which Cyprus company, and this is the most decision-relevant section on the page. A Cyprus trading company is comfortably outside the rule. A Cyprus IP Box company is inside it unless there are real people and real assets on the island.

Start with the two features that make Lithuania different from its neighbours. First, the charge on positive income sits in two parallel provisions — one in the corporate law and one in the Law on Personal Income Tax — and the personal one means a Lithuanian permanent resident holding a controlled foreign entity is within the rule personally. Holding the Cyprus company yourself rather than under a UAB changes nothing. Second, the low-tax test is a hard arithmetic line rather than a list or a purpose test.

Control comes first: a controlled foreign entity is one in which the holder, alone or with associated persons and directly or indirectly, owns more than 50% of the shares, voting rights or rights to profit. A sole founder is there by definition.

Then two conditions have to hold together. Passive income — interest, royalties and other intellectual-property income, dividends and gains on shares, insurance and financial services, and low-value-add trading with associated persons — must exceed one third of the entity's total income for the period. And the foreign tax actually charged must be lower than 50% of the tax that would have been computed under the Law on Corporate Income Tax.

Half of 17% is 8.5%. That arithmetic is ours, on two published inputs — the statutory fraction and the current standard rate — rather than a figure the authority prints, but it is not a matter of opinion. Now place Cyprus against it:

That carve-out is worth being concrete about, because it is the entire answer for a Cyprus IP business held from Lithuania. The rule does not apply where the controlled entity has employees and uses assets to secure an actual economic activity in the state where it is registered. In practice that means people on a Cyprus payroll doing the work the income comes from, premises they work in, equipment they work with, decisions minuted where the company is, and books that show all of it contemporaneously. It does not mean a registered office and a service agreement. And note the scope precisely: the carve-out is written for entities caught by the passive-income and low-tax conditions, so nobody should describe it as a universal rescue.

Two honest caveats. The comparator in the low-tax test is the tax Lithuanian law would have computed on that income, not a flat 17% benchmark — and because Lithuania charges 7% on its own qualifying intellectual-property profit, it is at least arguable that the relevant line for qualifying IP income is half of 7% rather than half of 17%, which would put a Cypriot IP Box rate much closer to it. That is a reading of the statutory wording, not a position confirmed by published guidance, and it belongs in front of a Lithuanian adviser before anyone builds on it. Second caveat: none of this matters once you are no longer a Lithuanian resident. The controlled-foreign-entity rules reach residents. The point of the departure is to stop being one, cleanly, which is what the residency section below is about.

Can a Cyprus company become Lithuanian tax resident if you run it from Vilnius?

No, and this is the cleanest single fact in the Lithuanian file. A Lithuanian taxable entity means a legal person registered in accordance with the procedure established by the legal acts of the Republic of Lithuania — registration, and nothing else. There is no place-of-effective-management test.

It is hard to overstate how unusual that is. Across most of the European Union the single most common way a relocation goes wrong is that the founder forms a company abroad and keeps directing it from home, and the home state's effective-management test quietly makes that company a domestic taxpayer on worldwide profit. Lithuania simply has no such test, so the failure mode does not exist on the Lithuanian side. The Cyprus company you form is Cypriot, and it stays Cypriot however many board calls you take from Vilnius.

Three consequences follow, and the second is the one to watch.

Your UAB stays Lithuanian when you leave. It keeps filing Lithuanian returns on its worldwide profit, excluding income of permanent establishments in EEA or treaty states where that income is taxed there, whoever runs it and from wherever. Emigrating does not move the company. If the UAB is meant to stop, it has to be stopped deliberately.

The exposure runs the other way. Cyprus does apply a management-and-control test. Running a Lithuanian UAB from Limassol can make it Cypriot-resident as well, or create a Cypriot permanent establishment — and the treaty offers thin comfort, because dual corporate residence is resolved by the competent authorities endeavouring to settle the question by mutual agreement rather than by a rule you can apply yourself. Two tax administrations negotiating is not a plan.

Nothing in the corporate residence rules is triggered by your move. Which is exactly why the exit charge is written the way it is.

What happens to your UAB, and when does the article 40-2 exit charge bite?

When assets or activities move, not when you do. Lithuania has a full exit charge for companies, in force for tax periods from 2020, and its four triggers are all about assets crossing a border: a Lithuanian entity attributing assets to a foreign permanent establishment, a Lithuanian permanent establishment of a foreign entity attributing assets abroad, a Lithuanian entity transferring its Lithuanian activities to a foreign country, and a Lithuanian permanent establishment transferring its activities abroad.

Notice what is absent from that list: there is no "the company ceases to be Lithuanian resident" trigger. There cannot be, because residence follows registration. So a UAB that goes on trading from Vilnius while its owner lives in Cyprus is untouched by the charge.

Move the intellectual property, the equipment or the business line into a Cypriot establishment and it is a different matter. The entity recognises capital gains equal to the difference between the fair market price of the transferred assets at the time of transfer and their purchase price, and where the assets have been depreciated for tax purposes that purchase price is reduced by the depreciation already taken, so the charge picks up recapture as well as appreciation. At 17%, on assets a growing company has carried at book value for years, that is not a rounding error.

There is relief, and it has teeth in both directions. Where the assets go to an EEA state with a tax-recovery-assistance arrangement equivalent to the EU recovery directive — Cyprus qualifies — the income may be brought into the tax base in equal instalments over five years. But the instalments stop and the balance accelerates if the assets are sold or otherwise transferred, if within five years they move to a non-EEA state or an EEA state without the recovery arrangement, if bankruptcy or liquidation proceedings begin, or if the entity fails to meet its corporate tax obligations within twelve months of the statutory payment deadlines. The five-year deferral is not five years of freedom; it is five years of not selling. There is also a narrow carve-out for transfers of less than twelve months for securities financing, collateral, prudential capital requirements or liquidity management, which is not a founder's route around anything.

The practical guidance is short. Moving yourself is free. Moving the assets is the taxable act. Decide early which one you are doing, and get a Lithuanian adviser to value the intellectual property before, not after, anything is signed.

How does Lithuanian tax residency actually end?

Through the tests in article 4, and the one that catches founders is not the one they expect. There are five routes into permanent residence, and any single one is enough.

The statutory wording for the first three is worth having exactly: a permanent resident includes a person whose permanent place of residence during the tax period is in Lithuania, or whose place of personal, social or economic interests is in Lithuania rather than in a foreign country, or who is present in Lithuania for 183 days or more during the tax period.

The fourth test is the trap. A founder who plans to keep a foot in each country and stay "under six months" in Lithuania each year can clear 183 days twice over and still be caught, because presence of 280 days or more across successive tax periods, with 90 or more in one of them, is residence in its own right. A hundred and fifty days in each of two consecutive years is three hundred across the pair. The plan that feels safe is the plan that fails.

And the second test is not a day count at all. "The place of personal, social or economic interests" is a substantive enquiry into where your life is: family, home, bank, clubs, doctor, where the children go to school. Days are necessary and not sufficient. That is why a clean departure looks like a clean departure across every one of those, and why the Cypriot lease, the Cypriot payroll and the Cypriot company do double duty — they end one story and start another at the same time.

The rules for counting the 90, 183 and 280-day periods, and the criteria for what makes a departure permanent, are set by ministerial order rather than by the statute, and we could not obtain either from an official source. Take the counting mechanics — partial days, transit, short returns — to a Lithuanian adviser rather than assuming the intuitive answer.

What does the Lithuania–Cyprus treaty actually give you?

Considerably more than the internet says, and the discrepancy is worth naming because it is not subtle. The convention was signed on 21 June 2013, and the tax authority publishes a synthesised text showing how the multilateral instrument reshaped it — a level of transparency worth using, since the operative document is no longer the 2013 text alone.

Read from that text rather than any summary of it:

Two observations. There is no land-rich clause in article 13, so the source state does not get a bite at gains on shares in a property-heavy company — but the multilateral instrument's principal purpose test now overlays the whole convention, taking effect for withholding taxes on events from 1 January 2021 and for other taxes for periods beginning on or after 1 November 2020, and it is aimed precisely at arrangements whose main purpose is obtaining a treaty benefit. Treat article 13(4) as a fact about the treaty, not as a plan.

Domestic law reaches the same place from a different direction. Dividends paid out of Lithuania to a foreign entity are exempt where the recipient holds at least 10% of the voting shares for at least 12 uninterrupted months, unless the recipient is in a target territory — and Cyprus is not. Coming the other way, dividends received by a Lithuanian entity from an EEA-registered entity whose profit is subject to corporate tax or an equivalent are not taxed, with no holding threshold and no holding period at all — a materially wider route than the 10%-for-12-months test that applies to non-EEA payers. Cyprus, as an EU member state, is inside it. There is an anti-hybrid guard worth knowing about: the inbound exemptions are switched off where the foreign payer deducts the dividend against its own taxable profit.

One thing we deliberately do not print: an entry-into-force date for the convention. The synthesised text gives the signature date and every multilateral-instrument date but not the notification date that starts the clock, and no official page giving it was reachable. The signature date and the multilateral dates above are solid; the commencement date is not ours to assert.

What happens to Sodra and your pension when you leave Lithuania?

Less than people fear, and this is the one section of this page where we give you principles instead of percentages.

Lithuania and Cyprus are both EU member states, so the EU social security coordination framework governs the move: you are insured in one member state at a time, Lithuanian insurance periods are aggregated for pension purposes, and rights already accrued are not lost by moving. Contributions in Lithuania are also capped rather than open-ended, and the cap is expressed in multiples of the same average wage that drives the income tax bands — which is why Lithuanians talk about one threshold rather than two, and why €138,729.00 for 2026 is the number that keeps appearing in both conversations.

What you will not find on this page is a Lithuanian contribution percentage — not the employee rate, not the employer rate, not the self-employed base, not the health component, not the pension-accumulation figures. Sodra's site refused every automated request while this guide was researched, and we would rather leave a hole than fill it with a number nobody checked. Take those figures from Sodra directly, and get your insurance position formally determined under the coordination regulation rather than assuming it follows the tax residence. On the Cyprus side the corresponding charge is the health system contribution at 2.65% on income up to €180,000 a year, which is capped in absolute terms and is the figure the worked examples below use.

What do the numbers look like for two Lithuanian founders?

Two profiles, both ordinary, and they do not point the same way. The arithmetic uses headline rates and assumes full distribution of profit, which is the same simplification the calculator at the top of this page makes.

Tomas, a four-person SaaS company in Vilnius. Profit €120,000, all of it drawn. In Lithuania the company pays 17%, or €20,400, leaving €99,600; the 15% dividend charge takes €14,940 and €84,660 reaches him — 29.45% all in, exactly as the €100 example predicts. Run the same business through a Cyprus limited and the company pays 15%, or €18,000, leaving €102,000; a non-dom shareholder pays no Special Defence Contribution at all, and the health contribution at 2.65% takes €2,703, so €99,297 arrives. The difference is €14,637 in one year, and it repeats every year the company is profitable.

Rūta, a consultancy in Kaunas that grew. Profit €400,000. The Lithuanian stack is unchanged in shape: €68,000 of corporate tax, then €49,800 on the €332,000 distribution, and €282,200 in hand — again 29.45%, because the flat dividend charge does not scale with size. In Cyprus the company pays €60,000, leaving €340,000, and the health contribution is capped: 2.65% applies only up to €180,000 of income, so the maximum is €4,770 however large the distribution. Rūta keeps €335,230 — a gap of €53,030 in a single year. That is the shape of the thing: the Lithuanian rate is flat, so the euro difference grows in a straight line with the business.

And the third case, which neither profile covers. A founder who is not drawing money out at all — reinvesting everything, aiming at a trade sale in five or six years — is looking at a Lithuanian position of 0% for the first two periods, 7% while income stays under €300,000, and 15% flat on the exit. Against that, moving costs real money and buys little. We would tell that founder to stay, on the call, before there is anything to invoice.

Part 2: What Cyprus gives you

This is the straightforward half, and the half we build end to end. What you actually get on the other side.

What does the Cyprus side look like for a Lithuanian founder?

Simple, which after the Lithuanian ladder is most of the appeal. One corporate rate, one shareholder question, and no annual re-pricing against an average-wage multiple.

Profit in a Cyprus limited is charged once, at 15% from tax year 2026, with no band above it. Qualifying intellectual property brings the effective rate on that income to 3% from tax year 2026 under the IP Box — the strongest feature on the island and, as the controlled-foreign-entity section explains, the one that makes real substance non-negotiable while you are still Lithuanian resident.

Then the shareholder, which is where the whole 29.45% is decided. Lithuania's own concession was to hold dividends at a flat 15% and keep them out of the progressive ladder; Cyprus goes one layer further and keeps them out of personal income tax altogether, and a Cyprus resident who registers as non-domiciled is exempt from Special Defence Contribution on them for 17 years of residence on top. That registration is the entire distance between 29.45% and a capped health charge, because a shareholder who is treated as domiciled pays 5% on dividends from 2026 profits instead. Salary is taxed on a scale from 0% to €22,000 rising to 35% above €72,000. VAT registration becomes compulsory once taxable turnover passes €15,600, and the standard rate is 19%. Cyprus levies no net wealth tax and no inheritance tax.

The detail lives on pages that own it: Cyprus non-dom status, Cyprus tax benefits for foreigners, and what the 2026 reform changed. For the mechanics rather than the tax, how to register a company in Cyprus and what a formation costs are the right pages.

How does a Lithuanian founder become Cyprus tax resident, and does the Yellow Slip apply?

Usually through the 60-day rule, and yes — a Lithuanian citizen is an EU citizen, so the Yellow Slip route is open.

The straightforward path is more than 183 days a year on the island. The alternative asks for fewer days and more commitment on the ground, and it got easier this year: the old condition that you not be tax resident anywhere else was removed from the 60-day rule. Four conditions remain — at least 60 days in Cyprus, no more than 183 days in any other single state, a business, employment or office in a Cyprus tax-resident person held through the year, and a permanent home in Cyprus owned or rented.

For a Lithuanian founder that change lands in a particular way. It means a residual Lithuanian claim during a transition year no longer disqualifies you on the Cyprus side by itself. It does nothing about the Lithuanian hooks, which have to be closed on their own terms — and the 280/90 test means the transition year needs planning across two calendar years, not one. The useful part is that the same facts serve both projects: the directorship of your own Cyprus company satisfies the third condition and is simultaneously evidence about where your economic interests now sit, and the Cypriot lease that satisfies the fourth condition is the same lease that answers the permanent-home question in Lithuania.

The Yellow Slip is the certificate that puts your residence on the Cypriot record under EU free movement, and a Lithuanian passport opens it as of right. It is an immigration document rather than a tax one, and that distinction does more work in this corridor than in most: article 4 decides Lithuanian residence on permanent home, personal and economic interests and two separate day counts, none of which look at a Cypriot registration certificate, so the slip is one piece of evidence in that file and never an answer to it. Our guide draws the line properly, Sumly runs the application, and the 60-day rule guide works through the day counting.

Do you sell online from Lithuania, and what happens to the store?

Nothing frightening, because the move stays inside the single market. What changes is who keeps the books and how much of it lands on you by hand.

A Lithuanian seller on Shopify or WooCommerce is already dealing with the one-stop shop, distance-selling thresholds, VIES for business customers and a payout file that arrives as a spreadsheet nobody enjoys reconciling. Move the trading company to Cyprus and the same EU rules apply from a Cyprus VAT number instead of a Lithuanian one. Sumly's Shopify and WooCommerce plugins pull orders, refunds, fees and payouts straight into the books with the right Cyprus VAT treatment on every line, so the return is built from real transactions rather than reconstructed at quarter end.

Why do founders choose Cyprus over the tax havens the Lithuanian internet talks about?

Because most of what ranks for a Lithuanian searching mokesčių rojus is selling a decade-old idea, and because a serious founder is not shopping for a haven at all. They are shopping for somewhere to live and work that happens to tax reasonably.

The reasons people stay, said plainly. Cyprus has among the lowest violent crime rates in the European Union, which is the first thing a family notices and the last thing a tax article mentions. It is an English-speaking country in practice — business, banking, schooling and government forms all work in English, so the ramp is short for someone whose second language is English rather than Greek. There are people from everywhere here already, so you are not the odd foreigner but one of thousands, with a ready-made network of founders who did this two years ahead of you. Business and property are booming, and the island is genuinely open to doing business without the weight of regulation that grinds down small companies elsewhere. The beaches: in a Cyprus winter you can still go to the beach, and the summers are the ones people fly across the world for — which reads differently to someone who has spent twenty Februaries in the Baltic dark. And groceries — meat, fruit, vegetables — are affordable in a way that surprises people who assumed island prices.

Then the Lithuanian push factors, checkable rather than rhetorical. A corporate rate that has moved from 15% to 16% to 17% in two consecutive years. A flat 29.45% on every euro extracted from a profitable company, recurring annually. A new 25% middle band in the personal ladder and a 32% top band for anyone taking salary. A 280/90-day residency test that makes a part-time arrangement harder to hold than in either neighbouring country. And a controlled-foreign-entity rule with a hard 8.5% line that reaches natural persons, which is a live constraint on any low-taxed structure held while you are still resident. None of that makes Lithuania a bad country to run a company in — it is a well-administered one with a genuinely competitive start-up regime. It makes it an expensive country to live off a company in.

Part 3: How the move runs

From the decision to the first invoice out of the Cyprus company: the order, the mistakes people make before you, and two calculations worked through in full.

What does the move look like, month by month, from Lithuania?

Timelines here are qualitative on purpose. The Cyprus side moves at the Registrar's pace and the Lithuanian side moves at yours. What follows is the order that works.

• Before anything else — and this is where we start. We settle with you which of the two moves you are making: yourself, or yourself and the assets. If assets are moving, we put the article 40-2 valuation question in front of a Lithuanian adviser from our network first, because it drives everything downstream. And we plan the departure year across two calendar years with you, because of the 280/90 test.
• Month one. We order the Cyprus company. The name check, the paperwork and the filing with the Registrar run in the background while your Sumly books are already open — and because Lithuania tests corporate residence on registration alone, nothing about where you happen to be sitting during those weeks changes what that company is. You start the property search in parallel, and we tell you what will satisfy both the 60-day rule and the permanent-home question back home.
• Months one to three. We register the company, sort banking and EU payments, and run the VAT, social insurance, employee and UBO registrations as one bundle. You take the board decisions in Cyprus and we minute them. If the plan involves the IP Box, this is when we make the substance real, not when someone asks about it.
• Around the move itself. Your Lithuanian adviser files the departing-person return and the tax on income to the date of departure, both due before you go. They determine your social insurance position under the EU coordination rules rather than assuming it follows the tax, and we hold the Cyprus schedule to those dates.
• Months three to six. We file the Yellow Slip application. Your Cyprus day counting begins in earnest, and we keep the record. You handle personal banking, health cover, schools, and the ordinary business of living somewhere new — and we will point you at people for each of them.
• The following year. Together with your Lithuanian adviser we settle the UAB's fate deliberately — kept and trading, wound down, or left as a holding entity — rather than letting it drift. We request the Cypriot tax residence certificate once the year supports it, and we keep the Lithuanian departure paperwork where it will still be found in five years.

What do Lithuanian founders get wrong on the way to Cyprus?

Six mistakes, roughly in order of what they cost.

1. Reading the 2001 target-territory order and stopping there. It lists Cyprus. It has been superseded since. Everything downstream — the residency tail, the dividend exemption, the first CFC condition — turns on the current list, and the wrong list gives you the wrong answer to all three.
2. Building a Cyprus IP Box structure with no people in Cyprus. Below 8.5%, the substance carve-out is the whole defence, and it wants employees and assets carrying on actual economic activity — not a registered office.
3. Assuming the CFC rules only reach companies. They reach individuals through the personal income tax law. Holding the Cyprus company yourself does not put you outside them.
4. Splitting the year evenly and feeling safe. A hundred and fifty days in each of two years clears 183 twice and fails the 280/90 test once, which is all it takes.
5. Treating the departing-person filing as paperwork for later. The tax is payable before the departure date. Late is not a filing problem, it is a payment problem.
6. Moving the intellectual property casually. Assets crossing the border is the event that triggers the corporate exit charge at market value. Moving yourself does not. The two get conflated constantly and only one of them costs 17% of an unrealised gain.

Part 4: Who does the work

You can do all of this yourself. Below is what that costs in time and in money, against what it costs to let us do it.

Do it yourself — or have Sumly do it, from Lithuania

All of this is doable alone. The question is what your time is worth, and how much of the Cyprus half you want to carry personally while also managing a Lithuanian departure with a hard payment deadline in it.

The bookkeeping software starts from €39/mo and does everything needed to run and operate the company, whether you are already in Limassol or still in Vilnius: invoicing, AI double-entry bookkeeping, live open-banking feeds, VAT, VIES, provisional and corporate returns prepared box by box, live reports, a document inbox with its own email address, mobile receipt capture that books itself, multi-currency invoicing, team roles and the AI assistant — plus the payroll (€15/employee/mo), IP Box tracking (€50/mo) and Projects (€10/mo) add-ons and the e-commerce plugins.

Against the alternatives a Lithuanian founder is actually weighing:

And the comparison founders raise most directly:

Sumly is cheaper and faster, and we work WITH lawyers, not against them. When a case gets too complicated for what Sumly handles directly, we simply connect you with the right expert in exactly the legal field you need help in, and everything gets done according to best practice, always. Either way, it starts the same place: contact us.

The Cyprus catalogue is open to everyone who comes through the door, not reserved for a tier: formation, books from day zero, all tax compliance, IP Box applications, nominee director and secretary, a virtual address with PO box and digital mail scanning, the Yellow Slip your Lithuanian passport entitles you to, tax residency and non-dom at €750 per person, the registrations bundle covering VAT, social insurance, employees and UBO, audit through our Partner Auditors, the Shopify and WooCommerce plugins, banking and EU payments, and the expert-lawyer network for the departures that need one. Anything beyond the four published prices is scoped in the meeting and comes back as one clear package-deal offer, so you see the whole number before you commit to any of it.

For a Lithuanian founder the division of labour is the point. The Lithuanian half — the article 40-2 valuation, the departing-person filing and its payment, the Sodra determination, the day-counting mechanics — belongs with a Lithuanian adviser, and we will say so every time you ask. The Cyprus half comes from one provider, in one dashboard, at prices printed on this site. That is what makes Sumly the best choice for Lithuanian founders creating a company in Cyprus and relocating a business onto it.

Why is Sumly the best bookkeeping system for a Cyprus company?

Sumly is the best accounting software for a Cyprus limited company — because it is built for exactly one thing, Cyprus tax law: all 16 Cyprus VAT codes mapped to the official VAT return boxes, VIES and provisional tax native, not a localization. That sentence is the whole product strategy, and everything below is the evidence.

The two Cyprus-built alternatives a Lithuanian founder will be shown are Cybooks and Balabook. We meet their former customers every week — what they tell us, again and again: workflows that made simple bookkeeping overly complicated, rough edges and glitches, support that left them waiting — a messy experience they were relieved to leave behind.

On every one of these checkable dimensions, Sumly leads. That is a factual comparison — not a matter of taste.

Said plainly: the best support, the best bookkeeping software, the best AI for bookkeeping, the best bookkeeper and the best prices, with everything made easy. The detail is published rather than asserted — Sumly vs Cybooks and Sumly vs Balabook, plus Xero, QuickBooks and Sage if one of those is what you run today. Each piece has a page of its own if you would rather watch it work than read about it: AI, bank feeds, invoicing, IP Box, payroll, purchases and VAT.

On the IP Box there is one line worth repeating, and for a Lithuanian founder it carries an extra edge, because the Cypriot effective rate sits below the 8.5% controlled-foreign-entity line: the IP Box is the largest single line in a Cyprus product company's tax position — and the easiest one to forfeit through bookkeeping that was never set up for it. So it starts as a conversation about where the people and the decisions genuinely are rather than as a form to fill in, which is why the meeting comes before any paperwork. Sumly runs it as an expert service.

What happens when you get in touch

You do not need to have decided anything before you speak to us, and you do not need your paperwork in order.

1. The meeting. Fifteen minutes. You tell us what you own and when you want to move. We tell you which rules at home catch you, and what the Cyprus side costs.
2. We tell you what kind of case you have. If it is simple, we do all of it — company, books, residency, non-dom — at a fixed price. If it is not, we say so immediately and bring in the specialist it needs.
3. We start. The company is registered, your books open the same day, and you have one point of contact for the whole thing.

Questions Lithuanian founders actually ask

Frequently asked

Is Lithuanian corporate tax 15%?

Not any more, and this is the single most common error in content aimed at Lithuanian founders. The rate was 15% through 2024, 16% for the 2025 tax period, and 17% for tax periods from 1 January 2026 under the June 2025 amendment to article 5(1)(1) of the Law on Corporate Income Tax. Against Cyprus at 15% the gap is two points, not the four or five that stale articles imply — which is exactly why the decision has to turn on the shareholder layer rather than the company one.

If I run a Cyprus company from Vilnius, does Lithuania treat it as Lithuanian?

No. Article 2(2) of the Law on Corporate Income Tax defines a Lithuanian entity by registration under Lithuanian law and nothing else. There is no place-of-effective-management test on the Lithuanian side, so board meetings held in Vilnius do not drag a Cyprus company into the Lithuanian tax net. That is unusually clean by EU standards. The exposure runs the other way instead: Cyprus applies a management-and-control test, and the Lithuanian CFC rules can still reach you personally.

Will Lithuania keep taxing me for two years after I move?

Only if you leave for a target territory, and Cyprus is not one. Article 4(4) of the Law on Personal Income Tax keeps a departing resident with significant commercial interests taxable for the departure year plus two more — but the rule is gated on the Minister of Finance's target-territory list, and the version in force since 1 December 2023 contains 49 entries and no Cyprus. A founder leaving for Limassol falls back on the ordinary split-year rule instead.

Was Cyprus ever on Lithuania's target-territory list?

Yes, on the original list adopted in December 2001, alongside Malta. Both came off on EU accession. This matters because a search for the order still surfaces that 2001 text first, and anyone reading it concludes that Cyprus is a target territory for Lithuanian purposes. It is not, and has not been for two decades. The current list is the one adopted by Order No. 1K-389 of 30 November 2023.

Do Lithuanian CFC rules catch a Cyprus company I own personally?

They can, and unlike in several neighbouring states, individuals are squarely in scope through article 13 of the Law on Personal Income Tax rather than only companies. The low-tax test is 50% of the tax Lithuanian law would have computed, which at a 17% rate is 8.5%. A Cyprus trading company paying 15% is comfortably above that line. A Cyprus IP Box company at roughly 3% is below it, and then only the substance carve-out — real employees and real assets carrying on actual economic activity in Cyprus — keeps the charge away.

Does Lithuania charge an exit tax when I emigrate?

Not on you. There is no deemed disposal of a founder's shares on emigration anywhere in the Law on Personal Income Tax. There is a filing duty: article 29 requires a resident departing permanently to file a departing-person return, declare income to the date of departure, and pay the tax before the departure date rather than after it. The corporate charge in article 40-2 is separate and only bites when assets or activities actually move.

What does the Lithuania–Cyprus treaty give a founder?

Better terms than most people assume. Read from the synthesised text the tax authority publishes, dividends bear 0% at source where the beneficial owner is a company other than a partnership holding directly at least 10% of the capital, and 5% otherwise; interest is taxable only in the beneficial owner's state of residence; royalties are capped at 5%. Anything quoting double-digit rates for this pair is reciting domestic figures, not the convention.

Should a Lithuanian founder building toward a sale actually leave?

Often not, and we would rather say it here than after an invoice. Article 6(6)(3) taxes gains on shares acquired more than five years before disposal at a flat 15%, outside the progressive bands, and a new company can pay 0% for its first two tax periods and 7% thereafter while income stays under €300,000. If the plan is build-and-sell, Lithuania handles it well. The Cyprus case is strongest for the founder drawing money out year after year.

Does Sumly advise on Lithuanian tax?

No. Sumly builds and runs the Cyprus side: the company, the books from day zero, Cyprus VAT, VIES, provisional and corporate returns, the Yellow Slip, and the tax residency and non-dom registration. This page quotes Lithuania's own published statutes with links so you can see the shape of the decision, but how article 40-2 values your intellectual property is a question for a Lithuanian mokesčių konsultantas. Where a case needs one, we connect you with expert lawyers from our network.

Keep reading

• Every country's route to Cyprus — the departure guide for wherever you are now
• Cyprus non-dom status — the 17-year exemption in detail
• The Cyprus 60-day rule — day counting and the residency certificate
• The Yellow Slip explained — the EU registration certificate, step by step
• What changed in the 2026 Cyprus tax reform
• How to register a company in Cyprus and what it costs
• Cyprus vs Estonia and Cyprus vs Bulgaria — the two comparisons Baltic founders raise most
• Nominee director in Cyprus — what it is and what it is not
• The savings calculator, VAT calculator and salary calculator

The calculator on this page uses headline rates, an assumed annual return and full distribution of profit, so it shows the shape of the difference rather than your own result. Lithuanian figures are stated for 2026 and cited to the statutes and pages published by the State Tax Inspectorate and the Seimas legal acts register. The 8.5% controlled-foreign-entity line and the 12.75% target-territory line are our arithmetic on the statutory fractions and the current 17% rate, not figures the authority prints. No Lithuanian social insurance percentages, no tax-exempt-amount euro figure, no domestic non-resident withholding table, no departing-person form number and no treaty entry-into-force date appear on this page, because none of those could be confirmed against a reachable official source; nor do we state a Lithuanian net wealth or gift tax position for the same reason. Cyprus figures apply from tax year 2026. All Sumly prices exclude VAT, and government expenses on a formation are invoiced separately once your application is approved.