This form of activities are recommended when you are sure that you are able to implement the business idea on your own, and especially when you are planning to implement economic-commercial activities for a limited period of time. Self-employment is an individual activity which brings income or any other economic benefit to the resident during a continuous period.
Individual activity means:
- independent commercial or production activities of any nature, including business activities under business certificates (manufacture of textiles, repair activities, etc.);
- independent creative work, professional and other similar independent activities, including business activities under business certificates (lawyers, notaries, etc.)
- independent sport activities;
- independent performers’ activities (actors, musicians, etc.)
You may choose between two options:
- become self-employed according to a business certificate;
- become self-employed according to a certificate of self-employment.
|Evaluation criteria||Self-employment according to a business certificate||Self-employment according to a certificate of self-employment|
|Number of participants||A person and a person’s family members, if they are indicated in the business certificate||Sole owner|
|Restrictions of activities||Only the activities specified in the list of types of self-employment activity (which require a business certificate)||All types of economic commercial activities, except those that can only be undertaken by a legal entity|
|Minimum capital amount||There are no requirements regarding the capital.||There are no requirements regarding the capital.|
|Duty to register as a VAT payer||If the turnover exceeds 45 000 Eur||If the turnover exceeds 45 000 Eur|
Note the key differences:
- A business certificate – an advance payment of a fixed income tax is required.
- Self-employment certificate – the income tax is paid upon the end of the tax period (by 1 May).
- In order to obtain an individual activities certificate, you should submit a completed registration application using Form REG812 to the State tax inspectorate (STI). Data and documents can be submitted at the tax inspectorate in person, by post or by email. Individual activities can also be registered online. An individual activities certificate is issued online by filling in an application electronically via the the My STI/Mano VMI area. You can log in to this system using online banking or a mobile signature.
- This activities certificate is issued for an unlimited period of time. However, at the end of a tax period, an annual income tax declaration must be submitted to the district STI and personal income tax on the income from individual activities received during the calendar year must be paid.
- If you are registering your business for the first time, you can take State social insurance (VSD) leave for a year.
Individual activity under business certificates
In order to obtain a business license, you must first check whether business licenses are issued for the activity you have chosen. The list of activities which can be carried out under a business license can be found here. The amount of the business license fee may depend on the choice of activity type or sub-type. This amount also depends on the period of validity of the business license. A business license is limited to certain activities listed in the classification of business licenses.
- Business licenses may be issued for a desired period of a calendar year, which may not extend beyond the end of the same calendar year. Commercial business licenses are issued for a desired period of a calendar year, calculated in days. The shortest possible period is one day. Service and production business licenses are issued for a desired period of a calendar year (calculated in days) but not for more than one calendar year and not for less than 5 calendar days, which do not have to be consecutive.
- Income earned from a separate activity under a business license is subject to income tax at the established rate payable before the date of issue of the business license. The rates of the fixed income tax are determined by the council of each municipality annually.
Information compiled by: „Enterprise Lithuania“