If you have ever heard the term Akcinė Bendrovė and wondered what it means, you are not alone. This Lithuanian phrase might sound complex, but the idea behind it is quite simple. It is just the Lithuanian way of saying joint-stock company, which is a type of business that divides its ownership into shares. Anyone who buys a share becomes a part-owner of the company.
Whether you are a business owner thinking about expanding to Lithuania, an investor looking at new markets, or simply someone who is curious, this guide will explain everything you need to know about Akcinė Bendrovė in simple, easy-to-understand language.
What Does Akcinė Bendrovė Mean?
The term Akcinė Bendrovė (shortened to AB) literally means “joint-stock company” in English. In Lithuania, this is a formal legal business structure where the company’s capital is divided into equal parts called shares. These shares can be bought and sold by individuals or other companies.
An AB is a legal person, which means the company itself has rights and responsibilities under the law. It can own property, sign contracts, and be responsible for its own debts. This is very important because it means the company and its owners are treated as separate legal entities.
Lithuania’s business law recognizes two main types of joint-stock companies:
- AB (Akcinė Bendrovė) — a public joint-stock company
- UAB (Uždaroji Akcinė Bendrovė) — a private joint-stock company
Both are governed by the Lithuanian Civil Code and the Law on Companies, which set clear rules for how these businesses must operate.
AB vs UAB: What Is the Difference?
This is one of the most common questions people ask. Let’s break it down clearly.
| Feature | AB (Public) | UAB (Private) |
|---|---|---|
| Minimum share capital | €40,000 | €2,500 (as low as €1,000) |
| Shares traded publicly | Yes | No |
| Number of shareholders | Unlimited | Up to 250 |
| Board of Directors required | Yes (min. 3 members) | Not always required |
| Annual audit required | Yes | Only if certain thresholds are met |
| Best for | Large businesses | Small and medium businesses |
An AB is best for larger companies that want to raise money from the public by selling shares on the stock exchange. A UAB is better for smaller businesses that want to keep their ownership private and avoid complex rules.
Most businesses in Lithuania choose the UAB format because it is simpler. However, if you have big plans for growth or want public investment, an AB is the right choice.
Key Features of an Akcinė Bendrovė (AB)
1. Share Capital
To start an AB in Lithuania, you need a minimum share capital of €40,000. This money must be deposited in a Lithuanian bank account before the company is officially registered. At least 25% of this amount must be paid when the company is first set up.
This capital requirement shows that an AB is meant for serious, large-scale business. It gives confidence to investors and partners that the company has a solid financial base.
2. Limited Liability
One of the biggest benefits of an AB is limited liability. This means that if the company faces financial problems or goes into debt, the shareholders are only responsible for the amount of money they have invested. Their personal assets, such as their home or savings, are protected.
The company handles its own debts using its own assets. Shareholders do not need to worry about losing more than what they put in.
3. Public Share Trading
Unlike a UAB, an AB can list its shares on the stock exchange. This means the general public can buy and sell shares in the company. This is very useful when a business needs to raise a large amount of money quickly, because it can attract thousands of investors from across Lithuania and Europe.
This feature makes the AB structure the preferred choice for large corporations in Lithuania and across the European Union.
4. No Limit on Shareholders
An AB can have any number of shareholders, from just one person to thousands of investors. This flexibility makes it easy to expand ownership and attract new investors as the company grows.
5. Legal Transparency
All ABs are required to submit annual financial reports to the Register of Legal Entities in Lithuania. Public companies must also go through a yearly audit. These rules ensure that the company is open and honest with its shareholders and the public.
How Is an Akcinė Bendrovė Governed?
A well-run AB has a clear management structure. Here is how it works:
Shareholders’ Meeting
The shareholders’ meeting is the highest decision-making body in an AB. All shareholders are invited to attend and vote on important matters, such as:
- Approving or changing the company’s rules (Articles of Association)
- Electing the Board of Directors and Supervisory Board
- Deciding how profits are shared (dividends)
- Approving major financial decisions
- Voting on reorganization or closing the company
Every shareholder has voting rights based on the number of shares they own. More shares means more voting power.
Board of Directors
The Board of Directors is responsible for the day-to-day management of the company. In a public AB, the board must have at least 3 members. These directors are elected by the shareholders and make strategic decisions on behalf of the company.
Supervisory Board
The Supervisory Board monitors the work of the Board of Directors. It checks that the company is being managed properly and in the best interest of shareholders. A public AB must have between 3 and 15 members on its Supervisory Board, including an auditor.
CEO (Chief Executive Officer)
The CEO handles the daily running of the business. The CEO is appointed by the Board of Directors and is responsible for carrying out the board’s decisions and managing the company’s operations.
How to Register an Akcinė Bendrovė in Lithuania
Setting up an AB takes around 2 to 3 weeks if all documents are prepared correctly. Here is a step-by-step overview:
Step 1: Choose and Reserve a Company Name Check that your chosen business name is available and reserve it through the State Enterprise Center of Registers. The name must include the words “Akcinė Bendrovė” or the abbreviation “AB.” Your name reservation is valid for 6 months.
Step 2: Prepare the Founding Documents Write the Articles of Association, which describe how your company will be managed, how shares are divided, and what the company’s goals are.
Step 3: Deposit the Share Capital Open a temporary bank account in Lithuania and deposit the minimum share capital of €40,000. At least 25% must be paid at the start.
Step 4: Register with the Register of Legal Entities Submit all your documents to the Register of Legal Entities. You can do this in person in Lithuania, through a representative using a power of attorney, or by other official methods.
Step 5: Register for Taxes Once your company is registered, you must register with the State Tax Inspectorate to pay corporate income tax and, if required, VAT.
Step 6: Start Operating After all registrations are complete, your AB is ready to do business legally in Lithuania and across the European Union.
Tax Rules for an Akcinė Bendrovė
Understanding tax is very important when setting up a business in Lithuania. Here are the key tax points for an AB:
- Corporate Income Tax: The standard rate is 15%. Small companies that meet certain criteria may pay a reduced rate of 5% or even 0% in some cases.
- VAT (Value Added Tax): As of 2025, the VAT registration threshold is €55,000 per year. If your company earns more than this, you must register for VAT.
- Dividends Tax: When profits are paid out to shareholders as dividends, these are also subject to tax.
Lithuania’s tax system is generally considered business-friendly, especially within the EU. The country has tax treaties with many other countries to avoid double taxation.
Who Can Own an Akcinė Bendrovė?
One of the great things about an AB is that it is open to both Lithuanian citizens and foreign investors. There are no restrictions on who can own shares in a Lithuanian AB.
A single person can own 100% of the shares. There is no upper limit on the number of shareholders. This makes an AB very attractive to international investors who want to enter the Lithuanian or wider EU market.
Since Lithuania is a member of the European Union, a business registered as an AB automatically has access to EU markets. This is a major advantage for companies looking to grow beyond Lithuania’s borders.
Real Examples of Akcinė Bendrovė in Lithuania
Many of Lithuania’s biggest and most well-known companies operate as ABs. For example:
- AB “Ignitis grupė” is one of Lithuania’s leading energy companies, serving thousands of customers across the Baltic region.
- AB “Vilniaus baldai” is a well-known furniture manufacturer in Lithuania.
These companies use the AB structure because it allows them to raise large amounts of capital, attract public investors, and operate with the credibility that comes from a highly regulated and transparent structure.
Benefits of Choosing an Akcinė Bendrovė
If you are thinking about setting up a business in Lithuania, here are some strong reasons why an AB might be the right choice for you:
Access to Public Capital: You can raise money by selling shares to the public on the stock exchange.
Limited Liability Protection: Your personal assets are safe even if the company has debts.
No Shareholder Limit: You can have as many investors as you want, which makes growth easier.
EU Market Access: As a Lithuanian company, you can operate freely across all EU member states.
Strong Legal Standing: The AB structure is well-recognized by banks, partners, and investors, which builds trust.
Professional Governance: The required board structure ensures the company is managed professionally and responsibly.
Challenges to Consider
Of course, no business structure is perfect. There are some things to be aware of:
Higher Capital Requirement: You need at least €40,000 to start, which is much more than a UAB.
More Complex Rules: ABs must follow stricter reporting, auditing, and governance requirements.
More Time and Cost: Setting up and running an AB takes more effort than a smaller business structure.
If your business is still in the early stages or does not need public investment, a UAB might be a better fit for now. You can always upgrade to an AB later as your business grows.
Final Thoughts
An Akcinė Bendrovė (AB) is a powerful business structure for anyone who wants to build a serious, scalable company in Lithuania. It offers limited liability, access to public capital, and a professional governance system that builds confidence among investors and partners.
While it comes with higher requirements than a private company, the benefits are well worth it for businesses with big goals. Whether you are a local entrepreneur or an international investor, understanding the AB structure is an important step toward doing business in Lithuania and the European Union.
If you are planning to set up an AB, it is always a good idea to work with a local legal or business advisor who understands Lithuanian law and can help you through the process smoothly.
10 Frequently Asked Questions (FAQs)
1. What does Akcinė Bendrovė mean in English? Akcinė Bendrovė means “joint-stock company” in English. It is a type of business where ownership is divided into shares that people can buy and sell.
2. What is the minimum share capital needed to start an AB? You need at least €40,000 in share capital to register a public joint-stock company (AB) in Lithuania. At least 25% of this must be paid at the time of registration.
3. Can a foreign person or company own an AB in Lithuania? Yes. There are no restrictions on foreign ownership. A foreign individual or company can own 100% of the shares in a Lithuanian AB.
4. What is the difference between AB and UAB? An AB is a public company whose shares can be traded on the stock exchange. A UAB is a private company with a maximum of 250 shareholders and shares that cannot be traded publicly.
5. How long does it take to register an AB in Lithuania? The registration process usually takes about 2 to 3 weeks if all documents are prepared correctly.
6. Does an AB need to be audited every year? Yes. All public AB companies in Lithuania are required to have an annual financial audit. This is part of the transparency rules that protect shareholders and the public.
7. What tax rate does an AB pay in Lithuania? The standard corporate income tax rate in Lithuania is 15%. Some small companies may qualify for a lower rate of 5% or even 0%.
8. Can an AB be listed on the stock exchange? Yes. One of the key features of an AB is that it can list its shares on the stock exchange and raise money from public investors.
9. How many board members does an AB need? A public AB must have a Board of Directors with at least 3 members and a Supervisory Board with between 3 and 15 members.
10. Can one person start an Akcinė Bendrovė? Yes. A single person can be the sole founder and shareholder of an AB in Lithuania. There is no minimum number of shareholders required.
Click for more amazing info. News Cora
