Lithuania among the first ones in the world to legalise virtual office

Date

2018 09 04

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The Ministry of Economy will make a proposal to legalise the virtual office, which means enabling the establishment of companies that do not have a physical address of their premises so that they could be able to do communication with public authorities and other entities in virtual space. Following the adoption of this decision, Lithuania would become among the first ones in the world to legalise the virtual office.

‘Businesses which do not have offices operate in Lithuania and the entire world for many years; employees of such businesses sometimes work in different cities and even in different countries. Such businesses are however required to have a physical address of their premises, which means that they are often registered in apartments and so the founder’s residence is publicly revealed or sometimes mediators help with the premises address. With the virtual office legalised Lithuania would be among the first countries in the world enabling both setting up a business electronically anywhere in the world and communicating with public authorities and other entities by electronic means. This decision would be helpful even for those businesses who have offices’, said Minister of Economy Virginijus Sinkevičius who is the initiator of this proposal.

Now, in the process of establishing a business the office is identified based on the address of the premises. For this reason business founders who possess no immovable property  and who wish to set up a business need to contact persons who have premises and obtain their consent to register a business (for a fee or free of charge). In some cases, such a requirement handicaps the process of setting up a business. In the case of a virtual office only the given address of an online delivery box is required to be indicated in the National Electronic Delivery Information System.

The choice of a virtual location would also facilitate communication with public authorities and other bodies. Communication is often ineffective now because corporate governance bodies are often unavailable at their registered office. In addition, the administrative and financial burden resulting from the use of brokering services or from the sending of documents by registered post to the company’s home address would be reduced. The legalisation of a virtual office could help address these problems by enabling the communication of public authorities, businesses and individuals by electronic means.

The current provisions of the Civil Code which regulate the office of legal persons were established almost two decades ago and provide for no alternatives, including a virtual location. Eight years ago, the Civil Code waived the obligation to indicate the company’s registered office address in the articles of association since the registered office address was among the most frequently changing information; this helped facilitate the change of the company’s registered office address when needed.