Akcinė Bendrovė (AB): Lithuania’s Premier Business Structure Explained

What Is an Akcinė Bendrovė?

The term “Akcinė Bendrovė” (AB) refers to a public limited liability company in Lithuania. Legally defined by Lithuanian civil and commercial law, this structure is ideal for medium to large-scale businesses seeking external investment or planning a public offering.

According to the Law on Companies of the Republic of Lithuania, an Akcinė Bendrovė is a legal entity with limited liability, meaning shareholders are liable only up to the value of their shares.

Historical and Legal Context

The concept of a public limited company originated from European commercial law reforms in the 19th century. Lithuania adopted this model in the early 1990s after regaining independence, during its transition to a market economy.

• Governing Law: Akcinių bendrovių įstatymas (Law on Companies)
  
• Enacted: 1994 (with regular updates)
  
• Available in English: Seimas of the Republic of Lithuania
  

Key Features of Akcinė Bendrovė (AB)

• Legal Entity: Separate from shareholders
  
• Minimum Capital Requirement: €40,000
  
• Shareholders: One or more (individuals or legal entities)
  
• Share Types: Ordinary and preference shares
  
• Liability: Limited to share value
  
• Governance Structure: General meeting, optional supervisory board, and board of directors
  
• Public Offering Eligibility: Can be listed on stock exchanges like Nasdaq Vilnius
  

Formation Process of Akcinė Bendrovė

1. Name Reservation
   Submit your company name to the Centre of Registers (Registrų Centras). Approved names are reserved for 6 months.
   
2. Share Capital Deposit
   Open a temporary bank account and deposit €40,000. A bank certificate will confirm the deposit.
   
3. Prepare Founding Documents
   
   • Articles of Association
     
   • Incorporation Act or Founding Agreement
     
   • List of Shareholders
     
4. Company Registration
   Submit all documents to the Centre of Registers, including shareholder identities, board members, and financial forecasts.
   
5. Register for VAT and Social Security
   
   • VAT: Required if turnover exceeds €45,000
     
   • Sodra (State Social Insurance): Required if you employ staff
     

Corporate Governance of AB

Lithuanian law mandates structured governance in public companies to protect both investors and the public.

• General Meeting: Supreme authority approving reports, dividends, and electing the board
  
• Board of Directors: Handles daily operations and decision-making
  
• Supervisory Board: Optional unless legally required (especially for listed ABs)
  
• CEO / General Manager: Implements decisions of the board
  

Accounting and Auditing Rules

Akcinė Bendrovė must use either Lithuanian Business Accounting Standards (BAS) or International Financial Reporting Standards (IFRS), depending on listing status.

Audit is mandatory if any of the following are true:

• Revenue exceeds €3.5 million
  
• Assets exceed €1.8 million
  
• Staff exceeds 50 employees
  

Annual financial reports must be submitted to the Centre of Registers.

Taxation of Akcinė Bendrovė

Lithuania has double taxation agreements with over 57 countries, including Germany, UK, USA, and UAE — making it highly attractive for foreign investors.

Akcinė Bendrovė vs. Uždaroji Akcinė Bendrovė (UAB)

Famous Akcinė Bendrovė Companies in Lithuania

• AB Lietuvos Energija – Energy sector leader
  
• AB Vilniaus Baldai – Major furniture exporter
  
• AB Invalda INVL – Investment and asset management
  
• AB Klaipėdos Nafta – Oil and LNG terminal operator
  
• AB Apranga – Fashion retail leader across the Baltics
  

All these companies are publicly listed on Nasdaq Vilnius and follow strict EU transparency standards.

Pros and Cons of Choosing an Akcinė Bendrovė

Advantages:

• Access to large-scale investment
  
• Professional and transparent governance
  
• Enhanced credibility
  
• Public IPO eligibility
  
• Attractive to foreign investors
  

Disadvantages:

• High initial capital requirement (€40,000)
  
• Mandatory annual audit costs
  
• More regulatory and reporting obligations
  
• Less flexible for small/family-owned businesses
  

Who Should Start an AB in Lithuania?

You should consider registering an AB if you are:

• Planning to attract external funding or go public
  
• Launching a joint venture
  
• Establishing a headquarters for international operations
  
• Operating in energy, finance, retail, or technology sectors
  

If you’re a startup or SME, start as a UAB, and convert to AB later as you grow.

Foreign Ownership of ABs

Lithuania allows 100% foreign ownership of Akcinė Bendrovė. There are:

• No nationality restrictions
  
• No requirement for a local partner
  
• Remote setup is possible through a legal representative
  

Foreigners choose ABs for:

• EU expansion
  
• Investment vehicle via Lithuania’s double tax treaties
  
• Tech, SaaS, and financial operations

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Conclusion: Is Akcinė Bendrovė the Right Choice for You?

If your business vision includes international trade, raising external funds, or public listing, Akcinė Bendrovė is the ideal model.

Though more regulated and expensive than a UAB, it provides:

• A powerful legal and financial foundation
  
• High credibility
  
• Opportunities for capital growth and global trust
  

Whether you’re a Lithuanian entrepreneur or a foreign investor, an AB offers everything you need to scale professionally in the EU business landscape.

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