As international companies grow their footprint and tap into new markets, understanding local hiring laws and employment structures becomes vital to building sustainable operations. In this 17 – part series, we guide foreign businesses through the legal and strategic aspects of employment in key global jurisdictions.
This installment brings us to Lithuania – an EU member state with a rapidly developing economy, competitive labor costs, and a modern regulatory framework that supports both traditional and flexible work models. From direct employment and selfemployed contractors to temporary agency staffing, Lithuania offers a range of legally compliant options for foreign companies entering the market. Whether testing local talent or establishing longterm operations, selecting the right hiring model is key to minimizing risk and aligning with strategic business goals.
Authored by Audrius Bitinas
Aliant Lithuania
1. Are there alternatives to direct employment?
You can use person‘s work by employment contract, agency work or contract a self-employed person for some services (if the work does not classify as employment relations).
You can also use services of temporary work agency. Then you conclude contract with agency (the Labor Code regulates these relations. Also, the Convention of Employment agencies of International Labour Organization ratified by Lithuania and is valid since March 19, 2005. An employer who intends to carry out temporary employment activities must submit a written request to the State Labour Inspectorate to include it in the list of temporary employment agencies).
2. Is it necessary to set up a local entity to hire an employee?
In case of employment, it is possible to employ a person directly in a foreign entity (and specify Lithuania law as applicable law) and register as tax payer in Lithuania to pay social contributions for employee.
3. Direct employment vs. independent contractor: what about costs?
Direct employment may look cheaper from first sight, but later employee may enjoy social guarantees that may make employment model more expensive than agency work or services agreement. Minimal monthly wage is 1038 EUR. There are lot of limitations to terminate employment and additional guarantees for employee to enjoy (incl. maternity/paternity etc.) and then company may need another employee.
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The post Hiring Strategies Around the World: A 17-Country Series for Foreign Businesses – Lithuania first appeared on Aliant Law.