A private limited company (UAB) is a private legal entity with limited liability; its shareholders are not liable with their personal assets for the company’s outstanding obligations. The authorised capital of a UAB must be at least EUR 1,000. A UAB may be established by one or more natural and/or legal persons, and there is no limit on the number of shareholders. A shareholder may sell or otherwise transfer (e.g. by way of gift, exchange, etc.) their shares in the UAB.
Shareholders take the most important decisions by voting. Each share carries one vote; therefore, when voting at a general meeting of shareholders, the person who has acquired the largest number of shares has the greatest influence. A UAB must have a sole management body – a director – though a collegial management body – a board of directors – may also be established. Registration instructions here.
Advantages:
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- If the business fails, a shareholder risks only the assets they have contributed to the UAB, thereby protecting their personal assets;
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- In order to raise additional funds, a UAB may issue new shares, for which shareholders pay a specified sum of money upon purchase;
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- The option to exit the business by transferring UAB shares to other persons or by selling the business;
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- Tax relief for UABs here.
Disadvantages:
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- When establishing a limited liability company (UAB), it is mandatory to contribute at least 1,000 euros to the authorised capital;
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- Shareholders may only withdraw the profits earned by the UAB in the form of dividends (if the UAB is profitable) or as salary; however, in the latter case, substantial tax will be payable.
Main taxes
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- Income tax (IT).
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- Value Added Tax (VAT).
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- Property tax (if the limited liability company has registered property).
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- Dividends paid by the company to a resident – personal income tax.
You can find out more about taxes here.
Compare with other legal entities here
Information updated on 6 June 2026.
