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Employer is a person, for the benefit of whom and being subordinate to whom a natural person undertakes an obligation under an employment contract to perform a job function for remuneration. Working capacity of the employer – legal entity arises from the moment of its incorporation, unless a later moment of incorporation is established by legal acts regulating his activity.
The following subjects can be an employer:
- a natural person;
- a legal entity, also a unit (branch, representative office) of a legal entity or other organisation belonging to the jurisdiction of a foreign country and registered in the territory of the Republic of Lithuania, or a legal entity, other organisation, a unit of a legal entity or other organisation (branch, representative office) or a group of such persons belonging to the jurisdiction of a foreign country.
The following subjects can be employees:
- a natural person aged 16 and over, who undertakes an obligation to perform a job function for remuneration under an employment contract with the employer.
Useful links:
- Consultations are provided by the State Labour Inspectorate;
- Information for employers having employees (procedure to register for social security your employee);
- Information for employers;
- Information before starting work;
- Work place calculator.
Temporary Employment
A temporary employment contract shall be an employment contract concluded for a period not exceeding two months. Grounds for the conclusion of a temporary employment contract (circumstances under which a temporary employment contract may be concluded), the characteristics of the change and expiry of such a contract, as well as of the working and rest time of temporary workers shall be established by the Government.
For further information on this topic, please contact the State Labour Inspectorate. More detailed information is available on the official website.
Contact information for consultations:
State labour inspectorate of the Republic of Lithuania
Phone: +370 5 265 0193
E-mail: info@vdi.lt
Note: Certain professions in Lithuania are subject to a recognition procedure. Typically, in order to pursue such activities, it is necessary to obtain authorization from the competent authority responsible for regulating the profession (regulated professions).
As business operations expand, there may arise a need to develop or structurally organize a company’s activities by territory, functions, or specialization in order to establish the most optimal operational structure.
Where it is advantageous for the business that a company’s subdivision be granted rights to make decisions and enter into transactions with a certain degree of independence, a branch, a representative office, or another (subsidiary) legal entity may be established as a structurally separate unit from the parent company.
A branch or representative office of a company shall have only those rights granted to it by the founding entity, but not broader than those permitted under applicable laws and regulations.
What is the difference between a branch and a representative office?
- Branch: Legislation allows a company’s branch to be granted all the rights held by the company itself, but not more than those rights.
- Representative Office: Legal acts provide an exhaustive list of rights, including representing and defending the company’s interests, entering into transactions and performing other actions on behalf of the company, as well as, under certain conditions, carrying out import and export operations.
What should be considered when establishing branches and representative offices?
When establishing a branch or representative office in a foreign state, it is important to note that, in accordance with the prevailing principles of private international law, the establishment procedure and the scope of rights will most likely be governed by the law of the country in which the branch or representative office is established.
Thus, when establishing a branch or representative office of a foreign legal entity (organization) in Lithuania, the laws of the Republic of Lithuania shall apply. Conversely, if a Lithuanian legal entity decides to establish a branch or representative office abroad, it will be necessary to analyse the legal requirements of the respective foreign jurisdiction governing such structural units.
Procedure for establishing a branch or representative office of a legal entity:
- The company’s governing body (board or chief executive) adopts a decision to establish a branch or representative office;
- The regulations (by-laws) of the branch or representative office are prepared, including, inter alia, the definition of its scope of competence;
- The regulations, together with other supporting documents, are submitted to a notary for certification;
- The notarised documents are registered with the Register of Legal Entities.
Citizens of the European Union have the right to:
- start a business in any European Union country, Iceland, Norway, or Liechtenstein;
- establish a subsidiary or branch in another EU country for a company already registered.
Different requirements apply across countries; therefore, the European Union operates official National Point of Single Contact:
- Point of Single Contact (Services Contact Point) – responsible for providing guidance on permits and business licensing requirements;
- Product Contact Point – responsible for providing information on national legislation applicable to products;
- Construction Product Contact Point – responsible for providing information on conditions for placing construction products on the market.