Great talent is everywhere, and if you’re looking to hire remote, global talent in Europe, Lithuania may be your next stop — thanks to a booming economy and growing tech sector. Despite the Lithuanian economy being severely hit by the global financial crisis in 2008-2009, it has since rebounded. Currently, it’s one of the fastest growing economies in the European Union.
For employers looking to tap into Lithuanian talent, hiring employees may seem like a complex process — however, it doesn’t have to be. An Employer Of Record (EOR) can be ideal for companies looking to hire and pay talent around the world without the legal and administrative hassle. For example, you may not know that in Lithuania, the typical working week is eight hours a day, five days a week. In some cases, it may be extended to six days or 48 hours.
To overcome the nuances in Lithuanian working culture and to ensure a seamless process, work with an EOR. This article will walk you through the reasons, processes, and advantages of hiring employees in Lithuania through an EOR.
Why Hire Talent in Lithuania?
Lithuania boasts a young and highly educated workforce, friendly business regulations and a booming financial and tech sectors. Forbes even ranked Lithuania 27th out of 161 countries for Best Countries for Business.
Lithuania also operates in an Eastern European time zone and shares this with many countries in Eastern Europe and northwestern Asia. In Europe it runs through Finland, Greece, Latvia, Romania, Turkey and more and in Asia, it runs through Lebanon, Syria, Cyprus, and more meaning remote employees from Lithuania can integrate seamlessly into meetings and processes with colleagues across the globe.
Lastly, despite being an economy driven largely by agriculture and manufacturing sectors, Lithuania boasts a thriving technology sector with over 700+ startups. That means much of the workforce boatsts high computer literacy and an entrepreneurial spirit. Vilnius, Lithuania’s capital city, has an increasingly visible startup sector thanks to its startup-friendly regulatory environment, a beautiful medieval town center, over 20 business hubs and accelerators and strong rankings in intellectual property production.
How Can I Legally Hire an Employee in Lithuania?
To hire new employees in Lithuania, your business must have a local legal entity. The process to establish a local entity can be complex, time-consuming, and expensive. Doing so is only worth it if you are planning to set up long-term operations in the country.
This is where EORs come in handy. An EOR acts as a broker for hiring talent outside of the country you legally operate within. It will already have an entity set up and the legal framework in place to do the hiring for you. This gives you more time to focus on managing relationships with your employees and growing your business. Going through an EOR is a simple way to hire talent in Lithuania without all the legal hassle.
What Does an EOR Do?
Simply put, EORs take care of the legal procedures while you manage your employees. The legal frameworks for hiring in Lithuania can be quite different from those in the US and Canada. EORs handle worker visas and work permits, employment contracts, payroll, local compliance, termination, and any other HR services.
To learn more, check out our article on everything there is to know about EORs.
Contracts and Documentation
An EOR will handle the tedious administration involved in preparing contracts. Lithuania has different requirements for employment contracts, as well as limitations for fixed-term contracts. Working with an EOR will guarantee that employment contracts are compliant with Lithuanian regulations. EORs will also help collect the correct documentation, such as employment offers, signed contracts, banking information, and more. This way, you can focus on growing your business and connecting with your employees.
Employee Insurance and Benefits
When the world is your competition, it pays to incentivize new and existing hires with attractive benefits like medical, dental, vision and life insurance, and retirement savings plans. A comprehensive EOR will have those kinds of benefits built into its service offering.
Vacation and Public Holidays
In Lithuania, employees are entitled to 20 days of annual paid vacation for those working five days per week and 24 for those working six days per week.
Public holidays in Lithuania consist of religious and national holidays observed by Lithuanians across the country. There are 15 public holidays and as of 2023 they include:
- January 1: New Year’s Day
- February 16: Restoration of the State Day
- March 11: Restoration of Independence Day
- April 9: Easter Sunday
- April 10: Easter Monday
- May 1: Labor Day
- May 7: Mother’s Day
- June 4: Father’s Day
- June 24: St. John’s Day
- July 6: Anniversary of the Coronation of King Mindaugas
- August 15: Assumption Day
- November 1: All Saints’ Day
- December 24: Christmas Eve
- December 25: Christmas Day
- December 26: Second Day of Christmas
An EOR will help companies navigate the public holidays in Lithuania and keep track of paid time off and different types of leave.
Taxes
Employers in Lithuania pay 33.8% of the employee’s salary in taxes which includes 20% into a mandatory pension and around 13% in health insurance.
Understanding the tax laws in Lithuania can be a long and complicated process, but it is necessary to ensure you are paying employees compliantly and abiding by local Lithuanian laws. Thankfully, an EOR can handle the logistics and ensure that payroll is processed properly and per the regulations in whichever country you are operating.
What Are Your Responsibilities?
While the EOR handles everything related to legal and HR processes, everything else will fall to you as the employer. You take care of your global staff in the same way you would your local hires. That means search and recruitment, company onboarding, training, management, day-to-day communications, progress tracking and so on. With an EOR taking care of the legal complexities, you’re able to focus on building connections with your remote staff.
While the relationship with the employee won’t be all that different through an EOR, you need to be clear with your staff on the legalities of their contracts. Of course, retention is also up to you. You will need to consider how you help your staff grow and succeed in their new roles at your organization.
What Are the Advantages of Going Through an EOR in Lithuania?
Using an EOR to hire talent in Lithuania will save you time, reduce costs, and mitigate risks.
Setting up an entity for hiring in Lithuania is time-consuming and frankly, can be a huge headache. Since the EOR is already set up to hire employees in the country, it will be faster and easier to start hiring right away. In fact, the process won’t be that much different from hiring locally.
The set-up and HR costs can also be quite high, so going through an EOR can save you money. You will also be paying lower salaries than you would be in the US and Canada, so you’re bound to see some positive impact on your bottom line.
Most importantly though, you’ll be mitigating the risks associated with non-compliance. Because EORs have extensive experience in navigating complex local HR policies, you won’t have to worry about any issues arising from improper hiring practices.
How Do I Choose the Right EOR for Me?
Before selecting a vendor, consider these 4 things:
- Local Experience: Does the EOR have experience hiring in Lithuania? As discussed earlier, one of the biggest advantages of hiring an EOR is the assurance of compliance. Often, this requires a lot of past experience, so check the EOR’s track record in the country.
- Service Scale: Do you need someone who offers a full suite of services? If you want happy employees that you can retain in the long run, then you may need to offer them benefits like insurance and other welfare. Some EORs have systems in place for this but others may not. Also, certain EORs will offer consulting services to optimize your global hiring practices.
- Data and Systems Security: Lithuania has to adhere to the European Union’s General Data Protection Regulation (GDPR), meaning it has vastly different data regulations than other countries, especially Canada and the United States. Working with an EOR guarantees compliance with the GDPR and emphasizes the importance of protecting intellectual property. It’s critical to keep systems secure in a remote work environment, so look for a vendor that outlines ways they plan to keep information sensitive and secure.
- Collaboration: Ensure your vendor’s approach to communication and collaboration with its clients is aligned with your organization’s approach. Love having a point of contact person? Perhaps all you need is access to a Slack channel so you can quickly reach your vendor. Whatever your communication style, ensure your vendor can meet your needs.
Borderless: The Employer of Record Your Company Needs
Need an EOR? Look no further than Borderless. We can help you establish a business entity in Lithuania – giving you access to a massive talent pool without all the headache of traditional global expansion.
Book a demo today and see how we can help you quickly and easily hire, onboard, pay and retain the talent your organization needs.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
