Yes, you may be able to retain an employee who moves to Lithuania, provided their permission to work, legal employment arrangement and payroll responsibilities fit the move. Approve those separately. Keeping the same manager, laptop and salary does not settle them.
Two Lithuanian details can change the decision. Lithuania provides a registration route for foreign social-insurance payers, so assess whether the existing employer can remain in place. Where an EOR arrangement involves temporary agency employment, the employing agency must meet Lithuanian requirements. Neither route establishes the employee's immigration eligibility.
Rules checked: October 20, 2026.
Can your employee move to Lithuania and stay with the company?
Give conditional approval first, identifying the evidence needed before it becomes unconditional.
EU nationals generally do not need a work permit to work in another EU country. Residence registration remains a separate requirement.
For third-country nationals, Lithuania tightened its rules from July 2024: visa-free entry, another country's residence permit or a Schengen visa generally does not establish permission for ordinary employment. There are specific exceptions, including certain nationalities and activities. Someone working in Canada is not necessarily a Canadian citizen. Verify the person's actual category.
Establish the facts before approving the move
Prepare a short internal intake:
- Origin country and current legal employer, including any existing EOR.
- Destination municipality and actual worksite in Lithuania.
- Citizenship and verified work/residence category, including employer restrictions and expiry.
- Role, regulated duties, customer contact and authority to negotiate or sign contracts.
- Temporary or permanent intention, return arrangements and proposed first workday.
- Salary currency, bonus, equity, original service date, leave balances and benefit commitments.
- Whether a collective agreement, employee representative or consultation obligation affects the change.
These facts select the route. A permanent home-office move differs from an employer-directed assignment to deliver services in Lithuania. An engineer's internal duties may produce different commercial-presence questions from a salesperson's local contract authority.
Record who verified permission and for which arrangement. A residence permit alone may leave the work-permission question unanswered.
The examples below assume an ordinary private-sector employee currently working in Ontario for an Ontario-based company. They illustrate origin decisions; employees arriving from elsewhere need their own origin analysis.
Choose the destination employment arrangement
Start with an existing Lithuanian entity if you have one. Without one, compare continued foreign employment against a local employing provider before deciding that the employee must change employers.
Direct registration can preserve the employer
Lithuania's tax authority, VMI, provides form FR0227 for foreign legal-person registration. Its registration framework includes foreign legal persons registering as social-insurance payers.
That makes continued foreign employment a route worth assessing, particularly for a worker already authorized for the arrangement. It still requires Lithuanian employment and payroll administration.
The Labour Inspectorate identifies job function, remuneration and place of employment as essential contract terms. Document the Lithuanian work arrangement, working hours and remote-work conditions. Where Lithuanian rules apply, changes to essential or separately agreed conditions require the employee's written consent. Check the legal basis for retaining or replacing the existing contract.
Income tax also needs its own decision. Under the 2026 PIT Act, salary from a foreign company without a Lithuanian permanent establishment can fall into employee-declared Class B treatment. A Lithuanian employer or foreign employer's Lithuanian permanent establishment changes that analysis. Have payroll document tax residence, income source, treaty position and who pays; do not assume every route uses employer withholding.
A temporary stay needs a real legal basis
The Labour Code's posting categories concern temporary service provision, work at the employer's branch/group or other workplace, and temporary agency assignments. A return date and an overseas payslip do not establish that classification.
For a qualifying posting, the Labour Inspectorate requires advance notification for work exceeding 30 days, or construction work regardless of that threshold. Other reporting and immigration requirements need separate checks.
For the Ontario example, Canada lists a coverage certificate under its social-security agreement with Lithuania. Assess eligibility if Canadian employment continues temporarily. Do not assume the certificate preserves every Canadian benefit or removes all Lithuanian contributions.
Check the EOR's actual structure
For a Lithuanian employing entity conducting temporary agency work, temporary employment rules require statutory criteria and inclusion on the Labour Inspectorate's list. If the proposed EOR uses this structure, verify the employing entity and its current listing, assignment terms and responsibilities.
Also require a worker-specific permission assessment. A provider's ability to run Lithuanian payroll does not prove that it can support this person's immigration route or regulated role.
Agree what happens to pay, benefits and existing rights
Use a written continuity schedule that separates statutory rights, contractual promises and balances actually paid.
Worked case, entirely hypothetical: An ordinary private-sector employee works in Ontario for an Ontario company and has valid independent permission for the proposed Lithuanian work. No nationality or actual permit approval is assumed. The company remains the legal employer before and after the move, using foreign-employer registration. For this example, assume no Lithuanian permanent establishment, Lithuanian tax residence for the November salary and Lithuanian social-insurance coverage. The employee handles Class B income-tax declaration/payment; the employer processes applicable insurance deductions and contributions. These are hypothetical tax/coverage findings, not consequences of registration alone.
The employee started on October 1, 2022. The agreed change takes effect November 1, 2026, with first work in Lithuania on November 3. These are scenario dates, not a processing-time promise.
The leave figures are separate hypothetical ledger inputs, not a calculation that eight days equal CAD 1,200. Paying the cash balance reduces that ledger to zero; it does not erase the eight paid days. Ontario permits vacation pay at an agreed time with an electronic or written agreement. This example gives the preserved days paid status in addition to the cash payment.
Lithuania's ordinary annual leave minimum is 20 working days for a five-day week, 24 for a six-day week, or four weeks for shorter or different schedules. Better contractual or applicable collective terms can apply. The example's 25-day rate is a company promise, not a statutory entitlement.
An unchanged employer avoids inventing a termination in this case. It does not establish that Ontario law automatically stops applying: territorial application depends on the work arrangements. Origin payroll must retain any Canadian deductions, filings or benefits obligations that still apply.
If a different route actually ends Ontario employment, unpaid vacation pay is due by the later of seven days after the end and the next regular payday. Notice, termination pay, severance and contractual/common-law rights require their own determination. Do not treat a destination credit or relocation request as a waiver.
Coordinate approval, documents and first payroll
Operational dates and funding cutoffs below are assumed targets; legal advance-notification duties are identified separately.
- October 23, Friday: conditional approval. The manager accepts the role, Lithuanian worksite and budget. Legal records the hypothetical independent-permission premise and confirms that foreign registration is the selected route. Any required consultation precedes implementation.
- October 28, Wednesday: documents and readiness. HR and the employee sign the continuation amendment and the rights schedule above. Finance completes the employer registrations and records social-insurance and income-tax responsibilities. HR obtains replacement-benefit acceptance effective November 1. Missing registration or benefit evidence stops the move.
- October 29, Thursday: advance filings and final approval. Payroll submits the applicable insurance-start and foreign-worker notifications for the November 1 effective date. For ordinary Lithuanian-insured employment, 1-SD advance notice is normally due at least one working day before work. LDU reporting is separate, generally one working day before foreign-national employment; relevant hosting parties report qualifying postings. Independent work permission does not replace these filings. The example assumes a foreign national for whom the filings apply.
- October 30, Friday: last Ontario-period payment. Ontario payroll pays CAD 6,000 gross October salary plus CAD 1,200 earned vacation pay: CAD 7,200 gross before applicable deductions. This is the last payment processed for the Ontario period, not termination pay. The eight-day leave bank remains.
- November 1, Sunday: amended terms and benefits begin. The company remains employer; Lithuanian location, euro salary and the assumed insurance arrangements take effect. First scheduled work is Tuesday, November 3. November 1 and 2 are Lithuanian public holidays. The October 29 filing target leaves October 30 as a working-day buffer before the effective date.
- November 25 and 30: fund, pay and reconcile. Treasury's assumed November 25 funding cutoff supports the agreed November 30 first destination-period payment: EUR 4,000 gross for November. The separately earned CAD 2,000 bonus is paid and reported separately that day; currencies are not added together. Payroll reconciles deductions, employee income-tax responsibilities, benefits and both leave ledgers.
For Lithuanian-insured employment, the monthly SAM reporting/contribution cycle normally runs to the following month's 15th, separately from income-tax duties. The payroll owner schedules the actual returns and due dates, including applicable holiday rules.
The November example also crosses a legal commencement date. Enacted Labour Code amendments take effect principally on November 1, 2026, including remote-work changes. Specified existing procedures and probation periods retain earlier rules. Legal must select the applicable provisions rather than assume the October signing date settles everything. See our Lithuanian employment guide for adjacent duties.
Two relocation cases and the costs that change
Case 1: the independently authorized employee completes the move. The dated schedule preserves employment and leave, settles the earned cash balance, and starts the agreed euro pay and replacement benefits. First destination-period salary is EUR 4,000 gross on November 30.
If registration is still missing on October 29, final approval fails. HR defers the Lithuanian location and compensation effective date and the employee continues from the approved Ontario location under existing terms. The company keeps the existing benefits in force and resets the replacement start date with the insurers. Payroll recalculates the first Lithuanian period and refiles affected notices. It does not let the employee start in Lithuania and fix registration later.
Case 2: permission or an employer-change decision is needed. Use the same Ontario origin, but remove the independent-permission premise. Registration or an EOR contract alone cannot release the move. Immigration must establish the person's actual category and any employer-change requirement.
The May 2026 changes allow qualifying existing permit holders with specified pending residence applications to remain and continue with the same employer. This does not give every new arrival, or a worker changing to a new legal employer, permission to start work. Category-specific exceptions matter.
If no lawful route supports the proposed work by the intended date, defer or decline the move. Keep existing employment arrangements operative while the employee remains at an authorized work location. Do not promise an EOR workaround.
Compare the whole package before acceptance. Identical gross salary does not promise identical net pay, pension accrual or insurance, and an administration fee should not become an informal wage deduction.
What stays with your company after the move?
The employee can retain the same manager, team, performance cycle and promotion path where your policies and systems support them. Keep email and ordinary collaboration access working, while updating HRIS employer, work-location and payroll records accurately.
Your company must still supply accurate information about duties, worksite, working time and proposed changes. Assess client contact, contract authority and business-presence exposure. In the Ontario example, the Canada-Lithuania tax treaty addresses permanent establishments separately from employment income. A payroll arrangement does not itself answer that corporate-tax question.
Assign owners for workplace safety, IP terms, data access and regulated activities. Route future promotions, salary changes and cross-border travel through HR and the legal employer before implementation.
Questions about keeping an employee in Lithuania
Can we keep paying through our Canadian payroll?
Payment from Canada does not settle Lithuanian obligations. Continued foreign employment may work with the appropriate registrations, employment terms and tax/social-insurance treatment. Confirm Canadian obligations separately.
Is a stay below 183 days automatically safe?
No. In the Ontario example, the treaty's employment-income exemption combines a day-count test with employer-residence and permanent-establishment conditions. It does not grant immigration permission or waive employment and social-insurance duties.
Does an EOR preserve all previous service automatically?
Do not assume it does. Assess any statutory continuity rule and document additional contractual recognition entitlement by entitlement, alongside origin obligations.
Can we approve the move while a permit is pending?
Keep approval conditional until lawful work under the actual arrangement is established. Some existing workers can continue with the same employer under the May 2026 rules; that is not general permission for a new arrival or employer change.
Can the employee become a contractor to keep things simple?
An ongoing employee role should not be relabeled to avoid relocation obligations. Assess a lawful employment route, revise the plan or defer the move.
Borderless AI's EOR service covers employment contracts, payroll and benefits administration. Ask us to assess the proposed Lithuanian employment arrangement, worker eligibility and continuity requirements before committing to a move date. Confirm the employing entity and scope for your case; this assessment does not promise immigration approval.
