Public body

A public institution (VšĮ) is a non-profit public legal entity with limited liability, the purpose of which is to serve the public interest by carrying out activities that benefit society.

A public institution may be established by one or more natural and/or legal persons; there is no limit on the number of founders.

Advantages:

1. Limited civil liability – a member risks only the assets they have contributed to the public benefit organisation, thereby protecting their personal assets;
2. No need to contribute funds to the authorised capital (by way of comparison, the minimum authorised capital for a private limited company is 1,000 euros);
3. Non-profit organisations may reduce their taxable profit by the amount of funds directly allocated, i.e. actually incurred, the current tax period or which are intended to be directly allocated over the next two consecutive tax periods to finance activities serving the public interest.
4. A public institution may carry out commercial activities;
5. A public institution may receive support from legal entities and 1.2 per cent support from residents;
6. The option to withdraw from the organisation by transferring shareholder rights to other persons;
7. The possibility of raising additional funds by admitting new members to the public institution.

Disadvantages:

1. Profits from a public institution cannot be distributed to shareholders; therefore, shareholders can only receive money from the organisation in the form of wages;
2. A public institution cannot be converted into a private limited company;
3. A public institution may only engage in the activities specified in its articles of association.

Main taxes:

Income tax (IT) – 17 per cent of profit. The company’s calculated taxable profit is taxed at the standard 17 per cent income tax rate (16 per cent for the 2025 tax year). A preferential income tax rate may apply to the company’s taxable profit:

• a 0 per cent income tax rate. Further details can be found at here.
• 7 per cent (6 per cent for the 2025 tax year) corporation tax rate. Further details can be found here.

Personal income tax (GPM).

Social insurance contributions:

• Unemployment social insurance;
• Social insurance against accidents at work and occupational diseases;
• Contribution to the Guarantee Fund;
• Contributions to the Long-Term Employment Benefits Fund;
• Employee social insurance contributions.

Value Added Tax (VAT).

Property tax (NTM).

Information updated on 28 March 2026.