Memo about the key requirements and permits applied to production of cosmetics

Permits required to start a business

Good manufacturing practice principles must be observed in production of cosmetics. Good manufacturing practice is presumed to be observed when manufacturing conforms to certain harmonised standards. International standard ISO 22716:2007 contains guidelines for the production, control, storage and shipment of cosmetic products. This manual describes aspects of the quality of products, but does not discuss the matters concerning staff’s safety and environment protection. Issues of staff’s safety and environment protection are attributed to the direct responsibility of companies and can be regulated by local legislation and regulations.

To be engaged in cosmetics production, aerosol can safety requirements must be met. Only the aerosol cans meeting the established requirements can be placed on the Lithuanian market (Order No. 4-419 of the Minister of Economy of the Republic of Lithuania On the amendment of the Order No. 433 of the Minister of Economy of the Republic of Lithuania of 27 December 1999 On the approval of technical regulation of aerosol cans safety) Aerosol can (aerosol, aerosol product) is any non-refillable container made of metal, glass or plastic, in which compressed, liquefied or dissolved under pressure gas is contained, which may or may not contain liquid, paste or powder, and with a sprayer fitted, which allows spraying the content of the can (suspension of solid or liquid particles in gas), in the form of foam, paste, powder or liquid.

Permit-hygiene passport

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Requirements for the labeling of cosmetic products

Labeling means the presentation on the product and / or its packaging of consumer printed, written or graphic information about the product and its risks and safety of use.

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Design registration certificate

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International registration of the design

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Permit for using the name of Lithuania in the titles of internet domains

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Premises

The general requirements for the installation of workplaces define mandatory minimum safety and health requirements in the workplace. You must have premises that comply with the General Terms and Conditions for the Installation of Workplaces and changes to the provisions. These regulations define the requirements for electrical wiring, lighting, indoor ventilation and other areas.

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You must install premises that meet the requirements for fire safety (this requirement is mandatory when checks on the compliance of the objects with the fire safety requirements are carried out). Compliance with the requirements for fire protection is indicated by a certificate from the Territorial fire protection service or a declaration of the object’s compliance with fire safety regulations. Certificate and declaration optional, provided free of charge, required at the request of other institutions as an additional document, e.g. permission, and are recommended to avoid a fine.

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Changing the purpose of the premises

The change of purpose of residential premises to commercial is carried out through the spatial municipality administration’s city planning and architecture divisions (the names of the departments in the municipalities may vary) by drawing up a set of design conditions for the preparation of the project. It will probably be necessary to adapt the premises (for example, the installation of a separate entrance) and the consent of the majority of the inhabitants (owners) of the house.

When an activity is carried out in a residential apartment house or the purpose of changing the premises from residential to commercial, it is necessary:

The consent of the static co-owners (it is provided by the community of a dwelling house or by individual co-owners). Controlling authority: municipality administration
Room or building change project
Written consent to the design of the building (approval is provided by the municipal administration’s city planning and architecture division (the names of the departments in municipalities may vary))
Declaration of completion of construction / change of destination (issued by: State Territorial Planning and Construction Inspectorate under the Ministry of Environment)
In order to change the purpose of the premises to commercial ones, it must be taken into account that there must be a separate entrance from the outside and the reconstruction is in accordance with the technical requirements of architectural, hygienic, fire safety, environmental protection and construction of the dwelling house.

Business forms and fees

Here you will find information about applicable taxes by business forms. Abbreviations used:

  • VSD – state social insurance contribution
  • PSD – Compulsory Health Insurance Fee
  • GPM – Personal Income Tax
  • VAT – value added tax
  • PM – profit tax
  • NPD – non-taxable income
  • PNPD is an additional NPD
  • MMA – the minimum monthly salary

Details of business forms and fees are available here

Accounting

To provide accurate information about the entity’s financial position, performance and cash flows, the required financial statements. The financial statements comprise the following financial statements:

  • balance;
  • profit and loss statement;
  • cash flow statement;
  • statement of changes in equity;
  • explanatory note.

For more information on tax administration, please contact the State Tax Inspectorate’s departments www.vmi.lt, e-mail: vmi@vmi.lt, +370 5 266 8200; 8 5 255 3190.

Accounting Requirements for Individual Enterprise

In conducting your business, you must keep records in accordance with the requirements for the management of accounting of legal entities of unlimited civil liability. The accounting can be managed by the owner of the company, an accountant, a contract accounting company, or a self-employed accounting service.

Law on Accounting. Read more.
Business Accounting Standards. Read more.
Law on the Financial Reporting of Enterprises. Read more.
On Approval of Inventory Rules. Read more.
On the approval of the work of the Cashier and the execution of cash transactions. Read more.

Accounting requirements for AB, MB and UAB

In conducting your business, you must keep records in accordance with the requirements for the management of the accounting of limited liability of legal entities. The accounting can be managed by the entity’s structural unit or a chief accountant (accountant) and a contractual accounting service provider.

Law on Accounting. Read more.
Business Accounting Standards. Read more.
Law on the Financial Reporting of Enterprises. Read more.
On Approval of Inventory Rules. Read more.
On the approval of the work of the Cashier and the execution of cash transactions. Read more.

Accounting management with customised activity statement

If a person who has a certificate of individual activities are not subject to VAT, and then records are managed in accordance with the cash accounting principle, i.e., the revenue is recognised at the time of their receipt. If the person who has to individual activities under the memo is a VAT taxpayer, accounting is managed in accordance with the principle of accrual accounting, i.e. the (revenue is recognised when it is earned, regardless of receipt of revenue). A resident of applying the cash accounting principle and applying the accrual accounting principle must complete individual revenue and expenditure activities of the journal.

For more information: Individual activities under the memo, the accounting records and the requirements of filing the certificate of individual activity, in accordance with the accounting rules, the Republic of Lithuania approved by order of the Minister of finance

Accounting management with a business license
Acquiring business certificates that use cash registers to account for operating income, the operating income and expenses are specified in the cash register transaction log of the form and order of completion . 
Cash registers and their prices

Suitable cash registers that are included in the Tax Authorities in the list of authorized cash registers and sales (service provision) vending machines in the Republic of Lithuania are available from companies trading there. A list of suitable cash registers (suitable cash registers are devices that are in compliance with the technical requirements and included in the VMI list; the cash registers not listed or already excluded from the cash register are not usable), and the names of the companies that sell them are published by the STI on their website. You can buy a cash register with a new one, used or leased from cash registers.

Cash registers and their prices:

  • New from 144 Eur
  • Used from 30 Eur
  • Rent for months from 70 Eur

Cash registers are required to be trained to work on the cash register (including the completion of a technical passport and registration of the cash registers in the territorial State Tax Inspectorate and the proper programming thereof) and its users to work with the cash register. Most cash registers also offer their services. The said works are usually included in the sales price of the cash register. You can read more about cash registers on the VMI page.

Employees

Each job has job descriptions. Permanent instructions must be accumulated in one place – in the job descriptions and include all positions and specialties. They must contain a description of the work content (what must be done) and work standards (as they should be done).

Reception of the employee
  • An employee can work under a fixed / indefinite contract, which must be written.
  • The recruitment process starts with the application for employment and the signing of the employment contract.
  • The employee must start work on the day the work starts on the contract.
  • Required Documents:
  1. Valid identity card;
  2. health attestation;
  3. education, vocational education and training (if labor laws involve the admission to work with a particular education or vocational training, state of health);
  4. the birth certificate of the child’s minor;
  5. the birth certificate, the school where the student is studying, as well as the written consent of one of the parents or other child’s representative in accordance with the law, and the permission of the doctor who supervises the child’s health, if a minor is taken from work from the age of fourteen to sixteen years.
  • It is necessary to inform Sodra about the beginning of the person’s work no later than one working day before the scheduled start of the work.
  • At the latest before the start of work, the employer must familiarize himself / herself with the employee’s instructions on safety and health and safety and fire safety.

More information can be found here.

Necessary action upon acceptance of a worker
  1. Instruct staff on fire safety issues and place them in the fire safety briefings at the workplace in the logbook. (Firefighting staff briefing provides knowledge to help employees properly deal with the fire.) Workers need to be instructed before starting work and then every year. The introductory coaching must be registered in the registration dossier for introductory (general) fire safety briefings, and repeated – in the firework safety briefings at the workplace in the logbook.
  2. To report on the date of commencement of the insured state social insurance. When you are recruiting a new employee who is employed for the first time, you must notify the territorial office of the State Social Fund Board (SODRA), where your account as an insurer is being carried out on the commencement of the state social insurance coverage of the insured.
Dismissing a worker

The employment contract ends:

  • termination of it in accordance with the provisions of the Labor Code of the Republic of Lithuania and other laws;
  • liquidation of the employer without the successor of the rights;
  • when a worker is dead;
  • termination of employment contract by agreement of the parties;
  • termination of employment contract;
  • termination of the employment contract by the employee’s statement;
  • termination of an employment contract due to circumstances beyond the control of the employee;
  • termination of an employment contract on the initiative of the employer when the employee is not at fault.
Business financing sources

Most businesses require initial investment at the start of a business for equipment, raw materials or installation of premises. If your own resources are not enough, you can search for additional funding from various sources – the Labor Exchange, municipal business financing funds or EU support funds. You can find more information on possible sources and methods of support here: http://www.verslilietuva.lt/lt/verslo-pradzia/world-finance-sources

Marketing

Marketing – A system of measures involving a product or service path from its idea to the user. Traditionally, marketing is considered to consist of four elements. This is the idea of ​​a product or service, its development, pricing, distribution, and the design and implementation of sales promotion actions. All four factors are important in marketing activities.

More information here.

Equipment

Information about guide prices of new and second-hand equipment is available here.

  • Brand new mixers cost from EUR 1,000 to 2,000. Second-hand mixers cost from EUR 600 to 1,100.
  • Brand new scales cost from EUR 500 to 2,000. Second-hand scales are not recommended since they are not accurate.
  • Brand-new homogenisers cost from EUR 1,200 to 2,200. Second-hand homogenisers cost from EUR 600 to 1,200.
Business forms and fees

Here you will find information about applicable taxes by business forms. Abbreviations used:

  • VSD – state social insurance contribution
  • PSD – Compulsory Health Insurance Fee
  • GPM – Personal Income Tax
  • VAT – value added tax
  • PM – profit tax
  • NPD – non-taxable income
  • PNPD is an additional NPD
  • MMA – the minimum monthly salary

Details of business forms and fees are available here

Accounting

To provide accurate information about the entity’s financial position, performance and cash flows, the required financial statements. The financial statements comprise the following financial statements:

  • balance;
  • profit and loss statement;
  • cash flow statement;
  • statement of changes in equity;
  • explanatory note.

For more information on tax administration, please contact the State Tax Inspectorate’s departments www.vmi.lt, e-mail: vmi@vmi.lt, +370 5 266 8200; 8 5 255 3190.

Accounting Requirements for Individual Enterprise

In conducting your business, you must keep records in accordance with the requirements for the management of accounting of legal entities of unlimited civil liability. The accounting can be managed by the owner of the company, an accountant, a contract accounting company, or a self-employed accounting service.

Law on Accounting. Read more.
Business Accounting Standards. Read more.
Law on the Financial Reporting of Enterprises. Read more.
On Approval of Inventory Rules. Read more.
On the approval of the work of the Cashier and the execution of cash transactions. Read more.

Accounting requirements for AB, MB and UAB

In conducting your business, you must keep records in accordance with the requirements for the management of the accounting of limited liability of legal entities. The accounting can be managed by the entity’s structural unit or a chief accountant (accountant) and a contractual accounting service provider.

Law on Accounting. Read more.
Business Accounting Standards. Read more.
Law on the Financial Reporting of Enterprises. Read more.
On Approval of Inventory Rules. Read more.
On the approval of the work of the Cashier and the execution of cash transactions. Read more.

Accounting management with customised activity statement

If a person who has a certificate of individual activities are not subject to VAT, and then records are managed in accordance with the cash accounting principle, i.e., the revenue is recognised at the time of their receipt. If the person who has to individual activities under the memo is a VAT taxpayer, accounting is managed in accordance with the principle of accrual accounting, i.e. the (revenue is recognised when it is earned, regardless of receipt of revenue). A resident of applying the cash accounting principle and applying the accrual accounting principle must complete individual revenue and expenditure activities of the journal.

For more information: Individual activities under the memo, the accounting records and the requirements of filing the certificate of individual activity, in accordance with the accounting rules, the Republic of Lithuania approved by order of the Minister of finance

Accounting management with a business license
Acquiring business certificates that use cash registers to account for operating income, the operating income and expenses are specified in the cash register transaction log of the form and order of completion . 
Cash registers and their prices

Suitable cash registers that are included in the Tax Authorities in the list of authorized cash registers and sales (service provision) vending machines in the Republic of Lithuania are available from companies trading there. A list of suitable cash registers (suitable cash registers are devices that are in compliance with the technical requirements and included in the VMI list; the cash registers not listed or already excluded from the cash register are not usable), and the names of the companies that sell them are published by the STI on their website. You can buy a cash register with a new one, used or leased from cash registers.

Cash registers and their prices:

  • New from 144 Eur
  • Used from 30 Eur
  • Rent for months from 70 Eur

Cash registers are required to be trained to work on the cash register (including the completion of a technical passport and registration of the cash registers in the territorial State Tax Inspectorate and the proper programming thereof) and its users to work with the cash register. Most cash registers also offer their services. The said works are usually included in the sales price of the cash register. You can read more about cash registers on the VMI page.

Business financing sources

Most businesses require initial investment at the start of a business for equipment, raw materials or installation of premises. If your own resources are not enough, you can search for additional funding from various sources – the Labor Exchange, municipal business financing funds or EU support funds. You can find more information on possible sources and methods of support here: http://www.verslilietuva.lt/lt/verslo-pradzia/world-finance-sources

Employees

Each job has job descriptions. Permanent instructions must be accumulated in one place – in the job descriptions and include all positions and specialties. They must contain a description of the work content (what must be done) and work standards (as they should be done).

Reception of the employee
  • An employee can work under a fixed / indefinite contract, which must be written.
  • The recruitment process starts with the application for employment and the signing of the employment contract.
  • The employee must start work on the day the work starts on the contract.
  • Required Documents:
  1. Valid identity card;
  2. health attestation;
  3. education, vocational education and training (if labor laws involve the admission to work with a particular education or vocational training, state of health);
  4. the birth certificate of the child’s minor;
  5. the birth certificate, the school where the student is studying, as well as the written consent of one of the parents or other child’s representative in accordance with the law, and the permission of the doctor who supervises the child’s health, if a minor is taken from work from the age of fourteen to sixteen years.
  • It is necessary to inform Sodra about the beginning of the person’s work no later than one working day before the scheduled start of the work.
  • At the latest before the start of work, the employer must familiarize himself / herself with the employee’s instructions on safety and health and safety and fire safety.

More information can be found here.

Necessary action upon acceptance of a worker
  1. Instruct staff on fire safety issues and place them in the fire safety briefings at the workplace in the logbook. (Firefighting staff briefing provides knowledge to help employees properly deal with the fire.) Workers need to be instructed before starting work and then every year. The introductory coaching must be registered in the registration dossier for introductory (general) fire safety briefings, and repeated – in the firework safety briefings at the workplace in the logbook.
  2. To report on the date of commencement of the insured state social insurance. When you are recruiting a new employee who is employed for the first time, you must notify the territorial office of the State Social Fund Board (SODRA), where your account as an insurer is being carried out on the commencement of the state social insurance coverage of the insured.
Dismissing a worker

The employment contract ends:

  • termination of it in accordance with the provisions of the Labor Code of the Republic of Lithuania and other laws;
  • liquidation of the employer without the successor of the rights;
  • when a worker is dead;
  • termination of employment contract by agreement of the parties;
  • termination of employment contract;
  • termination of the employment contract by the employee’s statement;
  • termination of an employment contract due to circumstances beyond the control of the employee;
  • termination of an employment contract on the initiative of the employer when the employee is not at fault.
Marketing

Marketing – A system of measures involving a product or service path from its idea to the user. Traditionally, marketing is considered to consist of four elements. This is the idea of ​​a product or service, its development, pricing, distribution, and the design and implementation of sales promotion actions. All four factors are important in marketing activities.

More information here.

Record-keeping

In order to present correct information about the company’s financial condition, performance results and cash flows, financial statements are essential.

The set of financial statements comprises the following financial statements:

  • a balance sheet;
  • a profit (loss) account;
  • a cash flow statement;
  • a statement of changes in equity;
  • explanatory notes.

Forms of financial statements are available here: http://www.aat.lt/index.php?id=193

The set of annual financial statements as well as the set of consolidated annual financial statements, provided that financial accounting is mandatory under the law applicable to a legal person, foreign legal person or another organisation or branches thereof, shall be submitted to the Register Manager (regardless of a legal status): http://www.registrucentras.lt/jar/atmintines/fin_atsk.php

Territorial units of the State Tax Inspectorate, www.vmi.lt, e-mail: vmi@vmi.lt, 8 5 266 8200; 8 5 255 3190

Cash registers and their prices

The list of cash registers approved for use and of companies trading in them is published on the website of the State Tax Inspectorate, under section Databases-> Cash registers (more information is available here: https://www.vmi.lt/cms/kasos-aparatai). Cash registers approved for use are registers that satisfy technical requirements and are included into the STI’s list. Cash registers that are not included into the list or removed from it are not approved for use.

You may acquire a new or used cash register or lease it from companies that sell cash registers.

Cash registers and their prices:

  • A new cash register: from EUR 200 without VAT
  • A used cash register: from EUR 120 without VAT
  • Lease per month: from EUR 75 without VAT

A company that provides cash register support services must set a cash register functioning (including the completion of a technical passport and registration of a cash register in a territorial unit of the State Tax Inspectorate as well as its proper programming) and train its users to use the machine. Most companies that sell cash registers also provide cash register support services. The abovementioned works are usually included in the selling price of a cash register.

Permits required to start a business

Premises

Changing the purpose of the premises

Business forms and fees

UAB

The small community

Individual enterprise

Individual activity by certificate

Accounting

Accounting Requirements for Individual Enterprise

Accounting requirements for AB, MB and UAB

Accounting management with customised activity statement

Accounting management with a business license

Cash registers and their prices

Employees

Reception of the employee

Necessary action upon acceptance of a worker

Dismissing a worker

Business financing sources

Marketing

Equipment

Business forms and fees

UAB

The small community

Individual enterprise

Individual activity by certificate

Accounting

Accounting Requirements for Individual Enterprise

Accounting requirements for AB, MB and UAB

Accounting management with customised activity statement

Accounting management with a business license

Cash registers and their prices

Business financing sources

Employees

Reception of the employee

Necessary action upon acceptance of a worker

Dismissing a worker

Marketing

Record-keeping