This guide sets forth the main requirements and permits for a café, restaurant, food kiosk, bakery, wine-bar, beer house or another type of catering establishment.

Permits required to start a business

Description of procedures for assessing compliance of catering enterprises with hygiene requirements (in Lithuanian)

Registration of a food business operator

Registration of a food business operator – granting the right to a food business operator to be involved in the food business handling activities and included in the list of food business operators managed by the State Food and Veterinary Service and is provided with the identification number.

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Approval Certificate of Food Business Operator

Approval of a food business operator refers to the entitlement of a food business operator to engage in sprout production activity, its inclusion in the List of Food Business Operators managed by the State Food and Veterinary Service and assigning of an identification number.

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Company’s self-control system

The purpose of the company’s self-control system is to achieve internal control in the company, to clarify important stages of food safety activities and to ensure that food safety procedures are established, implemented, improved, maintained and reviewed: risk analysis, stages of food handling where food can become unsafe, their control points shall be identified at which continuous or periodic safety monitoring and control shall be performed.

Read more (in Lithuanian)

HN 15:2005 “Food hygiene”

Read more (in Lithuanian)

Waste Management Rules

The rules establish the procedure for waste management, accounting, declaration, sorting, and labeling.

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A license to engage in retail trade in alcoholic beverages

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A license to engage in retail trade of tobacco products

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If you plan to hang an outdoor advertisement or a signboard with a restaurant or cafe name, you will need to match this sign with the local municipality and obtain an external advertising permit. The cost of the permit will depend on the size and location of the sign. For more detailed information on issuing a permit, please contact the specific municipality where you plan to operate.

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Copyright License Agreement for the Use of Music Works for Publication (LATGA)

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Contract for the Publication of Phonograms Released for Commercial Purposes (AGATA)

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Premises

Food processing, processing and preparation rooms must comply with the requirements of good hygiene practices, as well as protection from contamination of foodstuffs during preparation, handling and processing, and during periods between these operations. Facilities and equipment must comply with HN 118: 2011

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

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You must install premises that meet the fire safety requirements (this requirement is mandatory when checking compliance with the fire safety requirements of the objects). Compliance with the requirements for fire protection is indicated by the documents of the Territorial Fire Protection Service or the Declaration of Conformity of the Object Compliance Fire Safety. Certificate and declaration optional, provided unpaid, required by other authorities as an additional document, for example, T.T. are allowed, and are recommended to avoid a fine.

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In the course of your business, you must have premises that meet the requirements for mobile, temporary premises or premises located in a private house that prepares food for market and small vending machines in accordance with the Regulation of the European Parliament and of the Council on food hygiene.

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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.

Equipment

Here are the approximate prices for the lowest price of new equipment without VAT, but you can always choose between worn equipment and negotiation. If you install a medium-sized cafe kitchen, prepare to invest at least 10-15 thousand. Eur.

Bar equipment

Cooker – 430 Eur
Convection oven – 725 Eur
Fryer – 170 Eur
Grill / baking tray – 230 Eur
Refrigerator – 230 Eur
Refrigerated table – 870 Eur
Ice Cream Generator – 430 Eur
Meatball – 350 Eur
Planetary mixer – 430 Eur
Gourmet Slicer – 300 Eur
Vegetable Slicer – 350 Eur
Bullsweight – 870 Eur
Table – 58 Eur
Sink – 30 Eur
Shelves – 30 Eur
Gutter and ventilation – 1160 Eur
Dishwasher – 1000 Eur
Boiler – 30 Eur

Bar

Bar (furniture, sink) 2000 – 4300 Eur
Refrigerator – 230 Eur
Coffee maker, coffee maker – 1000 Eur
Ice Cream Generator – 430 Eur
Juicer – 115 Eur
Bottom dishwasher – 1000 Eur
Brewing equipment – 300 Eur

Pizzeria

Pizza Table – 1000 Eur
Dough mixer – 870 Eur
Dough roast – 640 Eur
Pizza oven – 1160 Eur

Kebab

Kebab Grill – 430 Eur
Contact grill – 300 Eur
Ingridientų vitrina – 430 Eur
Vegetable Slicer – 320 Eur
Refrigerated table – 870 Eur
Kebab knife – 320 Eur
Fryer – 170 Eur
Steam convector – 430 Eur

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

UAB
  1. Corporate Income tax – 15 %. Taxable profits of entities whose average number of employees on the staff list does not exceed 10 and whose income during a tax period do not exceed EUR 300 000 shall be taxed at a rate of 0% during the first tax period, and at a rate of 5% during other tax periods, except for the cases specified in the law.
  2. The Standard Value added tax (VAT) rate is 21%. Taxable persons engaged in the provision of goods or services in Lithuania must register as VAT payers and calculate and pay VAT to the state budget. However, a taxable person of the Republic of Lithuania does not have to register as a VAT payer and does not have to calculate nor pay VAT on the goods and/or services supplied, provided that the aggregate amount received from the goods and/or services supplied as part of routine business activities does not exceed EUR 45,000 during the last 12 months. Registration as a VAT payer is not mandatory where the aggregate value of all goods purchased from the other EU Member States does not exceed EUR 14,000 (excluding VAT). There is an opportunity for voluntary registration as a VAT payer in cases where the aforesaid limit amounts are not exceeded.
  3. Real Estate Tax (if the legal entity has registered immovable property) – 0,30% – 3,00% (depends on immovable property value).
  4. Dividends and other income from distributed profits shall be taxed at a rate of 15 %.
  5. Taxes of the workplace:
    • Personal income tax – 20 % (if the income doesn’t exceed 84 average wages, which are EUR 104,278 per year, 32 % (if the income does exceed 84 average wages).
    • Unemployment Social Insurance – 1,31 % (employment contract with indefinite duration). Fixed-term employment contract – 2,03 %.
    • Social insurance against accidents at work and occupational diseases – 0,14 -1,40 %.
    • State social insurance – 8,72 % (additional pension contribution 2,1 % or 3,0 %).
    • Compulsory health insurance – 6,98 %.
    • Sickness Social Security – 2,09%
    • Maternity Social Security – 1,71%
    • Contribution to the long-term employment fund – 0,16 %

Find out more about the establishment, comparison, and comparison with other business forms here.

Small partnership
  1. Corporate Income tax – 15 %. Taxable profits of entities whose average number of employees on the staff list does not exceed 10 and whose income during a tax period do not exceed EUR 300 000 shall be taxed at a rate of 0% during the first tax period, and at a rate of 5% during other tax periods, except for the cases specified in the law.
  2. The Standard Value added tax (VAT) rate is 21%. Taxable persons engaged in the provision of goods or services in Lithuania must register as VAT payers and calculate and pay VAT to the state budget. However, a taxable person of the Republic of Lithuania does not have to register as a VAT payer and does not have to calculate nor pay VAT on the goods and/or services supplied, provided that the aggregate amount received from the goods and/or services supplied as part of routine business activities does not exceed EUR 45,000 during the last 12 months. Registration as a VAT payer is not mandatory where the aggregate value of all goods purchased from the other EU Member States does not exceed EUR 14,000 (excluding VAT). There is an opportunity for voluntary registration as a VAT payer in cases where the aforesaid limit amounts are not exceeded.
  3. Real Estate Tax (if the legal entity has registered immovable property) – 0,30% – 3,00% (depends on immovable property value).
  4. Dividends and other income from distributed profits shall be taxed at a rate of 15 %.

Personal withdrawals by Small Partnership member:

  • Personal income tax – 20 % of the number of funds withdrawn for personal needs.
  • State social insurance contributions are paid from 50 % of the number of funds withdrawn for personal needs.

State social insurance contribution rates:

  • 13,83 %;
  • 15,93 % if a partner of small partnership participates in the supplementary accumulation of pensions (2,1 %);
  • 16,83 % if a partner of small partnership participates in the supplementary accumulation of pensions (3,0 %);
  • Compulsory health insurance – 6,98 % from 50 % of the number of funds

withdrawn for personal needs.

The income of the small partnership manager, who is also a small partnership member:

  • Personal income tax – 15 %.
  • Pension insurance tax and compulsory health insurance tax do not need to pay.

The income of a non-small partnership member for the manager services:

  • Personal income tax – 20 %.
  • The state social insurance contributions for the heads of small partnerships, which are not partners of these small partnerships according to the Law on Small Partnerships, are paid to the pension social insurance under the same procedure as they are paid for persons who have an employment relationship or another type of relationship equivalent to employment at the following rate:
  • 15,70 % (8,72 % for the pension insurance, 6,98 % for the health insurance);
  • 17,80 % if the pension is accumulated voluntarily 2,1 % (8,72 % for the pension insurance, 6,98 % for the health insurance, 2,1 % additional pension contribution).
  • 18,70 % if the pension is accumulated voluntarily 3,0 % (8,72 % for the pension insurance, 6,98 % for the health insurance, 3,0 % additional pension contribution).

More about MB, its establishment and comparison with other business forms can be found here.

Individual enterprise
  1. Corporate Income tax – 15 %. Taxable profits of entities whose average number of employees on the staff list does not exceed 10 and whose income during a tax period do not exceed EUR 300 000 shall be taxed at a rate of 0% during the first tax period, and at a rate of 5% during other tax periods, except for the cases specified in the law.
  2. The Standard Value added tax (VAT) rate is 21%. Taxable persons engaged in the provision of goods or services in Lithuania must register as VAT payers and calculate and pay VAT to the state budget. However, a taxable person of the Republic of Lithuania does not have to register as a VAT payer and does not have to calculate nor pay VAT on the goods and/or services supplied, provided that the aggregate amount received from the goods and/or services supplied as part of routine business activities does not exceed EUR 45,000 during the last 12 months. Registration as a VAT payer is not mandatory where the aggregate value of all goods purchased from the other EU Member States does not exceed EUR 14,000 (excluding VAT). There is an opportunity for voluntary registration as a VAT payer in cases where the aforesaid limit amounts are not exceeded.
  3. Real Estate Tax (if the legal entity has registered immovable property) – 0,30% – 3,00% (depends on immovable property value).
  4. Dividends and other income from distributed profits shall be taxed at a rate of 15 %.

Personal withdrawals by Individual Enterprise owner:

  • Personal income tax – 20 % of the number of funds withdrawn for personal needs.
  • State social insurance contributions are paid from 50 % of the number of funds withdrawn for personal needs.

State social insurance contribution rates:

  • 13,83 %;
  • 15,93 % if a partner of small partnership participates in the supplementary accumulation of pensions (2,1 %);
  • 16,83 % if a partner of small partnership participates in the supplementary accumulation of pensions (3,0 %);
  • Compulsory health insurance – 6,98 % from 50 % of the number of funds withdrawn for personal needs.

More about Individual company, its establishment, and comparison with other business forms can be found here.

Individual activity by certificate

Personal income tax

  • The personal income tax (gyventojų pajamų mokestis or GPM in Lithuanian)
  • 5%-15% tax is applied for persons performing individual activities. Non-residents are taxed at the same rate as residents (for income obtained in Lithuania).

Compulsory health insurance 

  • Mandatory health insurance (Privalomasis sveikatos draudimas or PSD in Lithuanian) gives access to free health insurance services (to the majority of them). If the person is not insured with PSD s/he has to pay for medical services.
  • The Compulsory health insurance (PSD) size is 6,98 percent. It is calculated from the income, from which the social insurance contributions are calculated from, meaning – 90 percent of taxable income (without deducting VSD and PSD payables).

Social security tax

  • The main goal of the state social security system is to guarantee income for the insured when they are not able to work due to sickness, maternity, age, disability or other reasons. The social security tax has to be paid also by self-employed persons, athletes, artists, and others.
  • The contributions (payables) to “Sodra” are paid from the 90 percent of the taxable income from the individual economic activity (without deduction of State social insurance (VSD) and Compulsory health insurance (PSD).

VSD contributions rate:

  • 12,52 percent.
  • 14,62 percent if the person saves for a supplementary pension (2,1 percent);
  • 15,52 percent if the person saves for a supplementary pension (3 percent).

Value-added tax (VAT)

VAT is a general, broadly based consumption tax assessed on the value added to goods and services. It applies more or less to all goods and services that are bought and sold for use or consumption. It is a tax paid by consumers. The standard VAT rate in Lithuania is 21 %. The reduced VAT rates are as follows: 0%, 5 %, and 9%.

More information on the individual activity certificate, its registration, and comparison with the business certificate can be found 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.

Important to know

Contracts with companies engaged in the following activities:

  • Disinfection, pest control;
  • Used oil collection;
  • Food waste collection (of food, cooking of food waste, food products after the expiration time);
  • For the use of music records on the spot (refer to the Lithuanian Association of Related Rights).

Magazines you must have:

Examples and tips
Tips from the owner of Alaus Kolonėlė bar
  1. If you are planning of having the sign of a café or bar mounted outside, start from obtaining outdoor advertising permit, as it takes a lot of time.
  2. We recommend choosing the licence for selling all types of spirits (Licence for retail trade in alcoholic beverages), as the requirements and the price of the licence are the same.
  3. When completing documents for food business operator’s certificate, describe your business in great details to prevent any misunderstandings regarding business activities in the future (e.g., consumption of food and beverages in the café or takeaway).
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:

  1. a balance sheet;
  2. a profit (loss) account;
  3. a cash flow statement;
  4. a statement of changes in equity;
  5. explanatory notes.

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

Permits required to start a business

Premises

Changing the purpose of the premises

Equipment

Business forms and fees

UAB

Small partnership

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

Important to know

Examples and tips

Record-keeping