Best Venture Capital Lawyers in Marijampolė

About Venture Capital Law in Marijampolė, Republic of Lithuania

Venture capital in Marijampolė operates within the legal and regulatory framework of the Republic of Lithuania and the European Union. While investment activity and regulatory supervision are national, Marijampolė-based founders and investors benefit from the same rules that apply in Vilnius or Kaunas. Startups typically form private limited liability companies, known locally as UAB, and raise capital through equity, convertible notes, or similar instruments documented under Lithuanian civil and company law. Funds investing in Lithuanian startups are often structured as alternative investment funds supervised by the Bank of Lithuania. The ecosystem is supported by national co-investment programs and innovation agencies, and transactions are commonly documented in English with Lithuanian law governed corporate documents where required.

Why You May Need a Lawyer

Common situations that call for legal help include forming the right company type and drafting articles of association tailored for future investment; negotiating and documenting term sheets, cap tables, and shareholder agreements; designing founder vesting, employee stock options, and incentive plans that comply with tax rules; structuring seed and early-stage rounds using equity, convertible notes, or simple agreements for future equity while ensuring compliance with securities and corporate law; protecting intellectual property through proper assignment and licensing; navigating regulatory approvals for funds and managers and determining whether an investment vehicle must register with or be licensed by the Bank of Lithuania; performing legal due diligence and preparing disclosure schedules; handling cross-border investment issues, currency contributions, and foreign investor approvals where applicable; complying with anti-money laundering and know-your-customer requirements; addressing data protection, consumer, and competition law in scaling operations; and resolving disputes through Lithuanian courts or arbitration by drafting enforceable dispute resolution clauses.

Local Laws Overview

Company forms and governance: The most common vehicle for startups is a UAB private limited liability company; a UAB has a relatively low minimum capital and flexible governance that works well for venture investment. Public companies are AB and are less common at the startup stage due to stricter requirements. Lithuanian law permits preference shares, reserved matters, drag-along and tag-along, liquidation preferences, anti-dilution protections, and other standard venture rights if properly reflected in the articles of association and shareholder agreements. Pre-emptive rights for existing shareholders on new share issues apply by default and must be lawfully waived or disapplied to close financing rounds.

Share issuance and transfers: New share issues require shareholder resolutions, updates to articles of association, and filings with the Register of Legal Entities maintained by the State Enterprise Centre of Registers. Private company share transfers are typically effected by written agreement and registered in the shareholders register; notarization is not generally required for UAB share transfers, although certain security interests may require notarization or registration in a designated registry. Public company shares are dematerialized and recorded through the central securities depository system.

Investment instruments: Equity rounds are common; convertible notes and similar instruments are used in practice under the Civil Code. Simple agreements for future equity are also used as contractual instruments; their terms should be aligned with Lithuanian corporate and securities law and carefully drafted to avoid unintended regulatory characterizations. Interest, conversion mechanics, valuation caps, and maturity should be tailored to local law and tax outcomes.

Fund regulation: Venture and private equity funds usually qualify as alternative investment funds and are subject to EU AIFM rules as implemented in Lithuania. Managers may operate under a full license or a small manager registration depending on assets under management and leverage thresholds. The Bank of Lithuania supervises fund managers, marketing, and certain offering activities. Fund documentation must address investor eligibility and disclosures; sustainability finance disclosure rules may apply to EU managers.

Securities and offering rules: The EU Prospectus Regulation and the Lithuanian Law on Markets in Financial Instruments govern public offers. Private placements rely on exemptions such as offers to qualified investors or offers to fewer than a specified number of non-qualified investors in Lithuania; marketing and communications must be structured to stay within exemptions. Public solicitation without a prospectus is restricted.

Foreign investment screening: Lithuania screens certain investments in sectors important to national security. Transactions involving sensitive activities or critical infrastructure may require notification or approval by the competent commission. Early screening analysis helps avoid closing delays.

Tax considerations: The standard corporate income tax rate is 15 percent; small company relief may apply if statutory conditions are met. Dividends are generally subject to withholding tax for non-residents unless reduced by treaty or EU directives. Employee stock options can benefit from a personal income tax exemption if qualifying conditions are met, including a minimum holding period between grant and exercise; current practice commonly relies on a three-year period. Lithuania offers R and D super deduction and may provide IP related regimes subject to conditions. Personal and social tax consequences differ for salaries, options, and carried interest; specialist tax advice is recommended.

Employment and ESOPs: The Labor Code and tax law govern option plans. ESOPs are widely used in Lithuanian startups. Proper board and shareholder approvals, plan documents, grant agreements, and cap table tracking are essential. Vesting, leaver provisions, and exercise mechanics should be clearly defined and synchronized with tax timelines.

Intellectual property: Ensure founders and contractors assign IP to the company in writing. Patents, trademarks, and designs are registered through the State Patent Bureau. Software copyright arises on creation but should be assigned or licensed to the company. Investors usually require IP due diligence and chain of title confirmation.

Data protection and AML: The General Data Protection Regulation applies to startups handling personal data. Funds and companies must satisfy anti-money laundering obligations when onboarding investors or receiving funds, including beneficial owner disclosure to the Register of Legal Entities where required.

Disputes and enforcement: Shareholder agreements and investment contracts often include Lithuanian law and Vilnius-seated arbitration clauses or national courts jurisdiction. Arbitration awards and court judgments are enforceable across the EU under harmonized rules.

Frequently Asked Questions

What corporate form do investors prefer for Lithuanian startups?

Investors typically prefer a UAB private limited liability company because it offers limited liability, workable governance for venture terms, and a straightforward process for increasing share capital during funding rounds.

Can a Marijampolė startup raise money from foreign investors?

Yes. Foreign investment into Lithuanian companies is common. You must comply with Lithuanian corporate formalities, private offering rules, anti-money laundering checks, and where relevant any foreign investment screening for sensitive sectors.

Do UAB share transfers require notarization?

In most cases UAB share transfers can be completed by written agreement and registration in the company shareholders register without notarization. Certain transactions such as pledges or specific security arrangements may require notarization or registry filings; verify the current formalities before signing.

Are SAFEs and convertible notes enforceable in Lithuania?

Convertible notes are widely used and can be structured under the Civil Code. SAFEs function as contractual promises for future equity and are used in practice. Terms must be adapted to Lithuanian law, corporate mechanics, and tax treatment; careful drafting avoids unintended securities or lending implications.

What investor protections are standard in Lithuanian venture deals?

Term sheets commonly include liquidation preference, anti-dilution adjustments, information rights, pro rata rights on future rounds, board representation or observer rights, reserved matters, drag-along and tag-along rights, and founder vesting with good leaver and bad leaver provisions.

How are employee stock options taxed?

Lithuanian law provides a personal income tax exemption on gains from qualifying options if statutory conditions are met, including a minimum period between grant and exercise that is commonly three years. Social security treatment depends on the specifics. Obtain up-to-date tax advice before implementing an ESOP.

When does a fund or manager need authorization in Lithuania?

Managers of alternative investment funds operating in or from Lithuania must be licensed or registered depending on assets under management and leverage, in line with EU AIFM rules. The Bank of Lithuania oversees authorization and ongoing compliance, including marketing to Lithuanian investors.

Do private placements require a prospectus?

No, provided the offering meets an exemption under the EU Prospectus Regulation, such as offers only to qualified investors or to a limited number of non-qualified investors. Public solicitation to the general public without a prospectus is restricted.

Are there state co-investment programs available?

Yes. Lithuania operates national co-investment and accelerator programs that support venture funds and early-stage companies. These programs typically work alongside private investors under market terms and are administered by designated state financial institutions.

Which courts or tribunals handle venture disputes?

Parties often choose arbitration seated in Vilnius for complex shareholder disputes, but Lithuanian courts also hear corporate cases. Your contracts should specify governing law, jurisdiction or arbitration, and language to avoid uncertainty.

Additional Resources

Bank of Lithuania for supervision of funds, investment firms, and financial market participants; State Enterprise Centre of Registers for company incorporation, filings, and beneficial ownership registration; National development institution administering co-investment and guarantee programs for startups and funds; Startup promotion agency providing Startup Visa, acceleration information, and founder resources; State Tax Inspectorate for corporate, personal, and withholding tax guidance; State Patent Bureau for patents, trademarks, and designs; State Data Protection Inspectorate for GDPR supervision and guidance; Lithuanian Competition Council for merger control thresholds and competition law; Regional business support and incubation services in the Marijampolė municipality for local mentoring and networking.

Next Steps

Clarify your goal, such as forming a company, raising a seed round, or establishing a fund. Prepare a short summary of your business or fund thesis, a draft cap table, and any existing agreements. Engage a lawyer with venture capital experience in Lithuania and request a scoped engagement that covers term sheet, corporate documents, and regulatory checks. Ask for a timeline and a closing checklist covering board and shareholder approvals, filings with the Register of Legal Entities, bank onboarding, and updates to the shareholders register. Coordinate tax and employment advice for ESOP design and founder vesting. If foreign investors are involved, complete KYC and consider whether foreign investment screening applies early in the process. Use qualified electronic signatures that comply with eIDAS to streamline execution where acceptable. Keep a clean data room with financials, IP assignments, material contracts, and privacy documentation to accelerate due diligence and closing.