The Baltic States are rapidly becoming some of the most attractive destinations in Europe for young entrepreneurs. With fast online business registration, startup-friendly policies, and modern digital infrastructure, the Baltics offer a clear path for launching your first business. For entrepreneurs from Ukraine, for example, these countries offer consistent support to overcome wartime challenges, which almost non-other state can provide.
This AIN guide explains how to start a business in the Baltic States, with step-by-step instructions, legal insights, tax information, and practical tips tailored to first-time founders.
Why the Baltics are great for young founders?
The Baltic States are known for their digital-first governments, making it easy for young entrepreneurs to start a business entirely online - no in-person visits required. Their membership in the EU provides seamless access to the European market, with minimal bureaucracy and clear legal processes that support rapid business growth.
In addition, the region boasts vibrant startup ecosystems, active tech communities, and strong government support for innovation. Entrepreneurs benefit from favorable tax regimes, access to financing, and a highly international business environment. Widespread English proficiency makes it easy for newcomers to connect, collaborate, and scale their ideas across borders.
How can young founders start a business in the Baltics?
Lithuania, Latvia and Estonia are open to foreign entrepreneurs. Non-residents can establish their own business with 100% ownership or join an existing business. To open a business in the Baltic States, you must first choose your company structure. The options are as follows:
- Sole proprietorship – simple structure for freelancers;
- Limited Liability Company (LLC) – most common structure, with capital from €1,000 – €3,000;
- Open Joint Stock Company (OJSC) – public joint-stock company;
- Branch or representative office of a foreign company.
The registration process includes:
- Choose a unique company name;
- Prepare legal documents in the local language;
- Register with the Commercial Register;
- Open a business bank account;
- Deposit authorized capital.
Business registration in the Baltic States is quick, and you can often complete everything online. In Lithuania and Estonia, for example, the process takes about a week. You will need to provide standard documents:
- A valid passport or national ID;
- Proof of business address;
- Articles of association;
- Optional: e-Residency (for Estonia).
Other necessary details on starting a business in the Baltic countries can be found on the respective pages of your countries' Embassies in the Republic of Latvia, the Republic of Lithuania, and the Republic of Estonia.
Read more: How to open an international bank account — explainer.
Key features of doing business in the Baltics
Each of the Baltic states offers unique business conditions that make them attractive to young entrepreneurs:
| Country | What makes it ideal for startups |
| Lithuania | Quick registration, low corporate tax, tech accelerators |
| Latvia | Business-friendly tax rules, no currency controls |
| Estonia | Global leader in e-governance and support for foreign entrepreneurs, reinvested profits are untaxed |
The Baltics are known for transparent regulations and digital services, making them ideal for young founders who value speed, autonomy, and flexibility. Despite the high level of English, it is recommended to learn how to communicate in Lithuanian, Latvian or Estonian to penetrate the market more deeply.
Business taxation in the Baltic States
Latvia:
- Flat income tax rate is 25.5% (previously 20-31%) for income up to €105,300 per year;
- Income over that is taxed at 33%;
- Capital gains tax is 25.5%;
- An additional 3% tax is payable on income exceeding €200,000 per year (including capital gains).
Estonia:
- Corporate tax is not taxed on reinvested profits;
- As of 2025, the tax rate on dividends is 22%.
Lithuania:
- As of 2025, the corporate tax rate is 16% (previously 15%);
- 5% rate for small businesses (under 10 employees, under €1 million turnover);
- VAT applies if revenue exceeds €29,000 a year;
- 0% tax for 20 years for large investment projects (until end of 2025);
- Only agricultural businesses are exempt from the taxation.
Financial reporting and compliance for entrepreneurs in the Baltics
Reporting in the Baltic States is clear and transparent, but requires attention to detail. Therefore, it is better to entrust reporting services to a local accountant who understands all the nuances of working in the country.
For example, Estonia does not tax profits that are reinvested in the company. However, if your planned annual turnover exceeds €40,000, you should register with the tax and customs authority as a turnover tax payer.
Lithuania also offers a 0% tax rate for the first 20 years for companies implementing a project under a valid large investment project agreement until December 31, 2025.
But even with zero fees, entrepreneurs still must submit regular financial reports.
How to start your business in the Baltics: tips for young entrepreneurs
- Research your target market and local competition;
- Localize your branding and marketing;
- Hire local specialists to boost trust and connections;
- Use e-Residency in Estonia for 100% remote business control;
- Attend startup events and accelerators to grow your network.
The Baltics are an ideal launchpad for young entrepreneurs due to their low cost of entry and streamlined bureaucracy, making it easy to start a business. The region boasts fast-growing ecosystems in sectors like tech, design, and sustainability, offering ample opportunities for innovation.
With easy integration into international payment systems and a range of digital tools, entrepreneurs can scale their businesses efficiently. Additionally, being part of the EU and having a global business reputation provides access to broader markets and enhanced credibility, making the Baltics a smart choice for young founders.
Read more: Starting a business abroad: how to set up your startup in Europe.
