Why move from Lithuania to Cyprus when LT has a 6%/7% small-co rate?

Lithuania's small-co rate (6%, rising to 7% from 2026) is competitive for sub-€300k revenue. As you scale past €300k, the standard 16% LT CIT applies — and Cyprus 15% + IP Box (~3% effective) becomes structurally cleaner. Plus Lithuania's 32% top PIT bracket + 19.5% SS hits founder salaries hard; Cyprus non-dom 0% SDC delivers materially lighter founder economics.

Should I keep my Lithuanian UAB while relocating?

Common pattern: keep UAB for Lithuanian-customer-facing operations + form Cyprus structure for international revenue. BEWARE: Lithuanian CFC + place-of-effective-management tests can re-attribute UAB profits if board, banking, and decisions remain Lithuania-centric while you operate from Cyprus. Substance migration must be operational, not just formal.

Does Lithuania have an exit tax on individuals?

Lithuania applies an ATAD-based corporate exit tax. For individuals, Lithuania does not impose a broad exit tax on unrealised gains — taxation on actual realisation. Limited published commentary on individual cases; verify with adviser for HNW positions. Personal-side relocation is structurally simpler than e.g. Italy or Spain.

What's the Lithuania-Cyprus DTT position?

LT-CY DTT (2013, in force 17 April 2014). Headline rates: 0% dividends (Cyprus side), 0% interest (residence-state taxation only), royalties 5% max. EU Parent-Subsidiary Directive supplements on qualifying corporate-to-corporate dividends (≥10% / ≥24 months). One of the cleaner EU treaty corridors for cross-border structuring.

How does the Lithuanian 6%/7% small-co rate compare to Cyprus IP Box?

LT 6%/7% applies to qualifying small companies (<10 employees, <€300k revenue, rising to 7% from 2026). Cyprus IP Box (~3% effective) applies to qualifying-IP profit regardless of revenue size, subject to modified-nexus. For sub-€300k revenue without significant IP, Lithuania is competitive. For IP-heavy or above-threshold revenue, Cyprus is structurally lighter.

Lithuania has participation exemption — does it stack with Cyprus?

Lithuania has its own participation exemption (gains on EEA/treaty-country company shares held >2 years and >10% are exempt). Cyprus also has participation exemption (3-test diagnostic for foreign-subsidiary dividends). Cross-border structures can use both — Lithuanian rules on Lithuanian-side gains; Cyprus rules on Cyprus-side dividend receipts. Specialist coordination across both regimes.

For Lithuanianfounders & HNWIs

Cyprus structures for Lithuanian founders — at-scale successor

Q: Lithuania has participation exemption — does it stack with Cyprus?

Lithuania has its own participation exemption (gains on EEA/treaty-country company shares held >2 years and >10% are exempt). Cyprus also has participation exemption (3-test diagnostic for foreign-subsidiary dividends). Cross-border structures can use both — Lithuanian rules on Lithuanian-side gains; Cyprus rules on Cyprus-side dividend receipts. Specialist coordination across both regimes.

From LT 16% CIT (or 6%/7% small-co at sub-€300k) + 32% top PIT + 19.5% SS to Cyprus 15% + IP Box ~3% + 35% top + 50% high-earner exemption + non-dom 0% SDC. LT-CY DTT 0/0/5 — clean EU corridor.

0/0/5

LT-CY DTT

CY non-dom div

CY CGT shares

Book a free 30-min call See fixed-fee pricing

— The structural argument

Why Lithuanian founders pick Cyprus

Cyprus 15% + IP Box ~3% as the at-scale successor

Lithuanian 6%/7% small-co rate caps out at €300k revenue. As you scale past, standard 16% LT CIT applies. Cyprus 15% + IP Box (~3% on qualifying IP) becomes structurally lighter, especially for IP-heavy and software businesses.

Cyprus 0% SDC + 50% exemption vs LT 32% top + 19.5% SS

Lithuanian top PIT 32% + 19.5% SS = ~52% combined wedge on active income. Cyprus 35% top + 50% high-earner exemption + non-dom 0% SDC delivers materially lighter founder personal-tax position.

LT-CY DTT 0/0/5 + EU directive plumbing

Lithuanian-Cyprus DTT (2014): 0% dividends, 0% interest, 5% royalties. EU Parent-Subsidiary Directive supplements: 0% on qualifying corporate-to-corporate dividends. Among the cleaner EU treaty corridors.

Cyprus 0% inheritance vs LT 5-10%

Lithuanian inheritance: 5% (≤€150k) / 10% (above), with spouse + lineal descendants exempt. Cyprus inheritance: 0% (abolished). For founders building generational wealth, the inheritance differential is material.

— Day 0 → Day 90

Your Cyprus transition, end-to-end

Lithuanian-specific workstream from first call to operational Cyprus structure.

Day 0–7: Tri-jurisdictional scope
Free 30-min call. Sketch Cyprus structure; flag UAB retention vs migration; identify substance separation; Lithuanian CFC + PoEM analysis. Lithuanian counsel engaged.
Day 7–25: Cyprus company formation + LT-side substance plan
Cyprus Ltd formation. Lithuanian-side: maintain UAB substance (board, banking, management) if retaining for LT-customer operations; or plan dissolution / migration.
Day 25–55: Cyprus banking + Lithuanian deregistration
Cyprus bank account opening. Personal Lithuanian SS / NHIF deregistration. Address update with VMI.
Day 30–70: Yellow Slip + Non-Dom + TIN
Cyprus residence permit (Yellow Slip — EU citizen). Form T.D. 38 non-dom registration. Cyprus TIN.
Day 45–100: UAB retention or migration finalised
If retaining: UAB substance documented + intercompany pricing locked in. If dissolving: liquidator + VMI cessation.
Day 60–120: Operational structure + first compliance
First Cyprus dividend (0% SDC under non-dom). Cyprus IR4 cycle. Annual compliance plan locked in.

— Side-by-side

Compared to staying in Lithuania

Dimension	Staying in Lithuania	Cyprus structure
Headline corporate tax	16% standard / 6% (rising to 7% in 2026) small-co (≤€300k)	15% / ~3% via IP Box on qualifying
Top personal income tax	32% above ~€114k	35% top + 50% high-earner exemption
Capital gains on shares	15-20%; participation exemption for >10% / >2yr EEA holdings	0% (only Cyprus-property)
Dividend WHT outbound (treaty)	0% (LT-CY DTT)	0%
Inheritance tax (close family)	Spouse + lineal exempt; otherwise 5% / 10%	0%
Combined social contributions	~21% combined (19.5% emp + 1.77% employer)	GHS 2.65% capped + SI on insurable up to €70,148
Effective rate on qualifying IP	16% (no comparable IP Box)	~3% via IP Box

Indicative side-by-side. Your specific position depends on income mix, holdings, and Lithuania-side exit-tax mechanics. Engagement-letter analysis required.

— Treaty & legal essentials

Lithuania–Cyprus regulatory map

Lithuania–Cyprus DTT (2013, in force 2014)

Dividends 0%, interest 0% (residence-state), royalties 5% max. EU directive supplementation.

Lithuanian small-company regime

6% (rising to 7% from 2026) for qualifying small companies (<10 employees, <€300k revenue). New small companies: 0% in first year. Caps out at scale.

Lithuanian participation exemption

Gains on EEA/treaty-country company shares held >2 years and >10% are exempt. Layered structures with LT participation exemption + Cyprus participation exemption can be efficient cross-border.

Lithuanian CFC + place-of-effective-management tests

If UAB management runs from Cyprus, Lithuanian CFC + PoEM tests can re-attribute UAB profits to Cyprus-tax-resident control. Substance separation matters operationally, not just formally.

— What we handle end-to-end

The full Cyprus transition stack

— Fixed-fee, transparent

Tax Resident from €1,899 · Relocate & Launch from €4,899 · 60-Day Nomad from €5,899. All + VAT. No "contact us for a quote".

See full relocation pricing

— Common questions

Lithuanian founders ask

Reviewed by

Nexora Editorial Standards Board

ICPAC-coordinated · Cyprus Bar partner-firm

Updated May 2026

Engagements coordinated with ICPAC-registered Cyprus tax advisers and Cyprus Bar Association member-firm lawyers. MOKAS-aligned under Cyprus AML Law 188(I)/2007. See our editorial standards and disclaimer.

“Walked into the call confused, walked out with a 4-step plan, fixed-fee quote, and a Cyprus company set up two weeks later. No surprises on the bill.”

M. Kowalski

SaaS founder · Poland

Published with permission. Initials shown to preserve commercial-privacy preference.

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Dimension

Staying in Lithuania

Cyprus structure

Headline corporate tax

16% standard / 6% (rising to 7% in 2026) small-co (≤€300k)

15% / ~3% via IP Box on qualifying

Top personal income tax

32% above ~€114k

35% top + 50% high-earner exemption

Capital gains on shares

15-20%; participation exemption for >10% / >2yr EEA holdings

0% (only Cyprus-property)

Dividend WHT outbound (treaty)

0% (LT-CY DTT)

Inheritance tax (close family)

Spouse + lineal exempt; otherwise 5% / 10%

Combined social contributions

~21% combined (19.5% emp + 1.77% employer)

GHS 2.65% capped + SI on insurable up to €70,148

Effective rate on qualifying IP

16% (no comparable IP Box)

~3% via IP Box

Cyprus structures for Lithuanian founders — at-scale successor

Why Lithuanian founders pick Cyprus

Cyprus 15% + IP Box ~3% as the at-scale successor

Cyprus 0% SDC + 50% exemption vs LT 32% top + 19.5% SS

LT-CY DTT 0/0/5 + EU directive plumbing

Cyprus 0% inheritance vs LT 5-10%

Your Cyprus transition, end-to-end

Compared to staying in Lithuania

Lithuania–Cyprus regulatory map

Lithuania–Cyprus DTT (2013, in force 2014)

Lithuanian small-company regime

Lithuanian participation exemption

Lithuanian CFC + place-of-effective-management tests

The full Cyprus transition stack

Lithuanian founders ask

01Should I dissolve the UAB or keep it?

02Cyprus IP Box on Lithuanian-developed software?

03What about Lithuanian fintech / EMI licensing path?

04Is the Cyprus 60-day rule available to a Lithuanian founder?

05What about Lithuanian VAT (PVM)?

06Cyprus vs Estonia for Lithuanian founders?

07What about Lithuanian 'free zone' / FEZ regimes?

08Does Cyprus have a Lithuanian-speaking practitioner network?

Related Cyprus services, tools & guides.

Cyprus structures for Lithuanian founders — at-scale successor

Why Lithuanian founders pick Cyprus

Cyprus 15% + IP Box ~3% as the at-scale successor

Cyprus 0% SDC + 50% exemption vs LT 32% top + 19.5% SS

LT-CY DTT 0/0/5 + EU directive plumbing

Cyprus 0% inheritance vs LT 5-10%

Your Cyprus transition, end-to-end

Compared to staying in Lithuania

Lithuania–Cyprus regulatory map

Lithuania–Cyprus DTT (2013, in force 2014)

Lithuanian small-company regime

Lithuanian participation exemption

Lithuanian CFC + place-of-effective-management tests

The full Cyprus transition stack

Lithuanian founders ask

01Should I dissolve the UAB or keep it?

02Cyprus IP Box on Lithuanian-developed software?

03What about Lithuanian fintech / EMI licensing path?

04Is the Cyprus 60-day rule available to a Lithuanian founder?

05What about Lithuanian VAT (PVM)?

06Cyprus vs Estonia for Lithuanian founders?

07What about Lithuanian 'free zone' / FEZ regimes?

08Does Cyprus have a Lithuanian-speaking practitioner network?

Related Cyprus services, tools & guides.