comparing estonian and lithuanian e-⁠Residency

InCorpora • Sep 16, 2021 • 7 min read

What are the main differences between Estonia's seven-year old e-⁠Residency programme and the new kid on the block from Lithuania?

As of 21 June 2021 foreigners have been able to apply for e-⁠resident status in Lithuania, receive an e-⁠resident card and e-ID certificate. This allows them to make use of the electronic administrative, public or commercial services provided in Lithuania.

The Lithuanian e-⁠residency program is just the latest in a growing marketplace. Estonia launched its highly popular e-⁠Residency program, the first of its kind, back in 2014 and it has since grown to be the program to beat.

What does the Lithuanian program have to offer? Is it better than Estonian e-⁠Residency? Which should you choose? These are all questions we aim to answer in this article. Read on to find out!

This article was written by InCorpora, a full-service firm providing tailor-made corporate, accounting, back-office, and banking support services to e-resident company owner. Contact InCorpora via their website:

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What is e-⁠Residency?

In December 2014, Estonia was the first country in the world to introduce e-⁠Residency. The program allows non-Estonians to have remote, digital access to a range of e-services such as company formation, banking, payment processing, and taxation. E-⁠residents receive a digital ID card, which they can use to securely authenticate themselves online and digitally sign, encrypt and send documents.

Thanks to e-⁠Residency, it’s possible for a Chinese entrepreneur to establish an Estonian company that can be run from Shanghai and serve their clients based in France, for example. Everything is handled online, remotely, and totally hassle-free.

Why Estonia?

Estonia has become a hub for industrial and logistics activities and is a world leader in IT. The country is uniquely positioned as a scalable location of choice for knowledge and digital business.

Some highlights:

A member of the EU, eurozone and NATO, Estonia is politically and economically stable and secure.
Estonia is the world’s most digitally enabled nation, offering experienced talent, a stable environment, and innovation at its core.
Estonia is a near cashless society with over 99% of financial transactions happening digitally.
With a highly-qualified workforce, specialising in engineering, electronics and IT, Estonia is at the cutting edge of R&D.
Estonia developed the X-Road, its proprietary decentralised, distributed system in 2001 and has utilised Blockchain since 2008.

Benefits of Estonian e-⁠Residency

The Estonian e-⁠Residency program allows you to:

Apply online and pick up your digital ID card from one of 45 collection points around the world
Establish an EU-based company, 100% online from anywhere in the world and manage it remotely
Expand or keep your business in the EU
Declare taxes or open an Estonian business banking or fintech account
Be granted e-⁠resident status for a period of 5 years
Pay and receive payments using convenient online banking tools
Go paperless with secure digital solutions
Automate or delegate business administration with the help of members of the e-⁠Residency Marketplace
Network with over 120,000 like-minded e-⁠resident entrepreneurs

Learn more about the benefits of Estonian e-Residency on their website:

e-Residency Benefits | Digital Nomad, Freelancer, Startup Company

Learn how to apply for e-Residency in Estonia. Find out the benefits, requirements & costs for freelancers, digital entrepreneurs & startups.

Why Lithuania?

Lithuania is a country with a rich history. It has long been a great place to do business, ever popular due the low costs of accounting and administration, low taxes and good geographical position.

Some highlights:

It’s also a member of NATO, the EU and the Eurozone.
Lithuanian, Russian, English, and Polish languages are widely spoken, making it easier to converse.
The country is ranked 11th globally for Ease of Doing Business and has become a major hub for the fintech sector.
The New York Times ranks Vilnius alongside Copenhagen, Barcelona and Capetown as a trendy and well-managed place to live.

Lithuanian e-⁠residency

The Lithuanian e-⁠residency program allows you to be granted e-⁠resident status in the Register of Foreigners for a period of 3 years.

Lithuanian e-⁠Residency is still in its very early stages and foreigners can only do very basic things right now. For example, the only thing a foreigner can do with a Lithuanian e-⁠Residency card is to log into the government e-services and give digital signatures. They cannot register companies, nor can they open a business bank account or take advantage of the tax system.

Plus, in order to apply for the e-⁠residency status in Lithuania, you currently need to travel there to do so. Then, when your card is ready to be picked up, you will need to travel there again. For many people at the moment, this is made all the more difficult with covid travel restrictions in place.

Estonia vs. Lithuania — which program is better?

Here are the main differences between the Estonian and Lithuanian programs and business environments.

e-Residency - Estonia vs. Lithuania

Online application

Cost of application

Community size

Application time

Dedicated e-Residency team + infrastructure

Ecosystem of service providers for e-residents

Supported languages

Ease of Doing business rating (2020)

Ease of Paying Taxes (2020)

Cost of starting a business

Minimum share capital down payment

Annual company running costs

Corporate tax rate

Double tax treaties

Estonia

Yes

€150

120,000+ e-residents (as at January 2025)

Up to 30 mins

Yes

Estonian, English, Russian

18th

4th

€265

Legal address + contact person from €200

22%

Lithuania

Yes

€90

None

10-15min

Lithuanian, English, Russian

11th

6th

€73

25%

Legal address €45-€500

5% / 15%**

Online application

Estonia

Yes

Lithuania

Yes

Cost of application

Estonia

€150

Lithuania

€90

Community size

Estonia

120,000+ e-residents (as at January 2025)

Lithuania

None

Application time

Estonia

Up to 30 mins

Lithuania

10-15min

Dedicated e-Residency team + infrastructure

Estonia

Yes

Lithuania

Ecosystem of service providers for e-residents

Estonia

Yes

Lithuania

Supported languages

Estonia

Estonian, English, Russian

Lithuania

Lithuanian, English, Russian

Ease of Doing business rating (2020)

Estonia

18th

Lithuania

11th

Ease of Paying Taxes (2020)

Estonia

4th

Lithuania

6th

Cost of starting a business

Estonia

€265

Lithuania

€73

Minimum share capital down payment

Estonia

Lithuania

25%

Annual company running costs

Estonia

Legal address + contact person from €200

Lithuania

Legal address €45-€500

Corporate tax rate

Estonia

22%

Lithuania

5% / 15%**

Double tax treaties

Estonia

Lithuania

Notes to table:

** Corporate tax rate in Lithuania is 5% if annual income less than €300k & up to 10 employees.

*** There might be circumstances when a Tax Authority in another country may consider your Estonian or Lithuanian company liable to pay corporate taxes there too – meaning it has dual tax residency. For example, if you spend a lot of time in one country or conduct most of your activities for the company there (e.g. do client work, hire staff or maintain an office), a Tax Authority may consider that your company has formed a Permanent Establishment (PE). Neither e-Residency program will exempt your company from creating PEs in other countries.

As you can see, there are a number of differences between the programs and it can come down to the scale of your business and how location independent you need to be. Estonian e-⁠Residency can be applied for totally online and the card picked up from one of 45 collection points around the world. In contrast, in order to apply for e-⁠residency status in Lithuania, you need to travel there to do so, and again to pick up the card. For many people at the moment, this is made all the more difficult with the myriad of covid travel restrictions in place.

Generally speaking, Lithuania’s fee is slightly cheaper than Estonia’s, but the Estonian program offers significantly more services to its e-⁠residents, e.g. online company registration, remote business management, submitting online tax declarations, and being able to use Smart-ID to sign documents in state portals.

Applying for Lithuania’s e-⁠residency program is four times faster than Estonia’s, but — crucially — this is largely because the Lithuanian program is significantly less comprehensive. The Lithuanian program is very much in its infancy and offers considerably fewer advantages and benefits to participants than its Estonian contemporary.

For example, a Lithuanian e-⁠residency card simply grants a foreigner the ability to log into the government’s e-services portal and use digital signatures. Individuals cannot yet register companies, nor can they open a business bank account or take advantage of the local tax system.

With a dedicated team and infrastructure, a maturing ecosystem of expert service providers, a growing community of over 90,000 e-residents who have started 20,000+ businesses, and the fact that almost all of Estonia’s online infrastructure is available in English and Russian, Estonian e-Residency is still the one to beat.

Take your first step with Incorpora

If you’re looking to establish a company in Estonia, InCorpora is ready and waiting to help.

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Form a fully-running Estonian company with a bank account in just one week!

Take the first step and get in touch with us today to book your free 15-minute consultation about e-Residency.

Setting up an Estonian entity couldn’t be more straightforward, thanks to our dedicated team. Our tailored package covers all aspects of company establishment in Estonia, including:

Setting up an IBAN for borderless banking;
Boosting substance with payroll, leased office, etc.;
Giving you limited liability;
VAT registration, if required;
Producing a tax residence certificate within 2 days;
Setting up payment gateways.

Company registration takes as little as one week.

This guest post was written by InCorpora, a full-service firm providing tailor-made corporate, accounting, back-office, and banking support services to e-resident company owners, and a trusted e-⁠Residency Marketplace member.