How to establish a transport company in Lithuania?

According to Article 7 Paragraph 2 of the Code of Road Transport of the Republic of Lithuania (hereinafter referred to as CRT) the carrier is a company registered under the procedure established by the law and has the right to transport cargo. Therefore, you must first choose the form of activities and to set up an undertaking, which aims to engage in the activities of cargo transportation with a commercial purpose. The forms of undertakings popular in Lithuania is an individual enterprise, a small partnership, a joint stock company. But the private limited liability company still remains as the most popular.

The private limited company is established in the following order:
• A contract establishing the undertaking is concluded. When the company is established by one founder, the company’s foundation act is concluded;
• The founders submit an application to the administrator of the Register of Legal Entities (VĮ Registrų centras (The State Enterprise Centre of Registers)) concerning inclusion of the name into the Register;
• A savingsaccount of the undertaking being established is opened in the bank;
• An initial contribution of at least 2.5 thousand euro is paid for the shares subscribed; each shareholder pays at least a quarter of the total of the shares subscribed and the total surplus amount of the nominal value of the subscribed shares; the amount of the initial contributions paid has to be not less than the statutory minimum share capital of the company laid down under the law, which is 2.5 thousand euros; the company is registered after all the initial contributions for the shares subscribed are paid; when forming the share capital, it is necessary to take the requirement posed for the proper financial condition of the company into account; the share capital of the company should amount to 9 – 14 thousand euros, so that there are no irregularities for the company as to the issue of a licence to engage in transport activities;
• The non-monetary contribution, which is supposed to cover partial payment of the company’s shares, is evaluated before the signing of the company establishment contract by an independent asset valuator;
• A constituent assembly is held, which elects the members of the corporate body (the sole governing body is the head of the company or the board of the company, if it is formed) and approves the statutes. The constituent assemblys not held if the establishing contract or the establishing act indicate the members of the corporate body of the private limited liability company elected by the general meeting of shareholders in accordance with the statutes.
• Before submitting an application to the administrator of the Registero register a private limited liability company, the notary must confirm the validity of the data recorded, the compliance of the statutes with regulatory requirements and the fact that the private limited liability company can be registered.
• The company is considered established from the date of its registry at the Register of Legal Entities.

The Requirements and Licensing of the Undertaking
The activity of cargo transportation by road vehicles with a maximum permissible weight, including a trailer (semi-trailer), of more than 3.5 tons and for a fee may be conducted only by carriers holding a licence issued in the manner prescribed (Article 8, Paragraph 1 of the Code of Road Transport).

Licence is not required to:
1) the universal postal service providers, transporting postal items;
2) when transporting damaged vehicles or vehicles involved in an accident;
3) when transporting drugs (medicines), appliances, equipment and other articles required to provide emergency care when conducting rescue operations, particularly in the case of natural disasters;
4) transportation of cargoes by motor vehicles;
5) for the transportation of cargoes, provided that the following conditions are met: a) the cargo being transported is the property of the company or has been sold, purchased, let out or rented, manufactured, extracted, processed or repaired by the company; b) the purpose of the journey is cargo transportation to or from the undertaking for their own use or its movement within the undertaking or outside it; c) the staff employed by the company under contractual obligation or granted to the company drive the motor vehicles transporting the cargo; d) the vehicles carrying the cargo are owned by the undertaking, have been leased or rented, in compliance with the conditions laid down under European Parliament and Council Directive 2006/1/EC of January 18, 2006; and e) such transportation is only an ancillary activity of the company.

Depending on the nature of the activities conducted by the transport company, the State Road Transport Inspectorate of Lithuania issues the following types of licences:
1) a licence to engage in the transportation of cargoes via international routes and within the territory of the Republic of Lithuania using goods road transport vehicles with a permissible maximum weight, including trailers (semi-trailers), of more than 3.5 tons;
2) a licence to engage in the transportation of cargoes by inland routes, which gives the right to transport cargoes within the territory of the Republic of Lithuania using good road transport vehicles with a permissible maximum weight, including trailers (semi-trailers), of more than 3.5 tons;
3) a licence to engage in passenger transport by buses on international routes and within the territory of the Republic of Lithuania;
4) a licence to engage in passenger transport by bus on inland routes, which gives the right to carry passengers within the territory of the Republic of Lithuania;
5) a licence to engage in passenger transport by bus on local public transport lines, which gives the right to carry passengers by bus on local public transport lines when the beginning or the end of the route is within the territory of the municipality that has issued the licence.

The carrier willing to obtain a licence must meet the following requirements:
a) to have an effective and stable establishment in Lithuania;
b) to be of impeccable repute;
c) to have an appropriate financial standing;
d) to have the requisite professional competence.

The effective and stable establishment of the carrier in Lithuania must meet the following requirements:
1) to hold office and premises in Lithuania for the storage of important company documents with which the State Road Transport Inspectorate can get acquainted with;
2) to have an office with an operator control centre or an office and an operator control centre by ownership or to hold one on other legal basis.

The requirement of a impeccable repute is posed for a carrier, the head of the carrier and the transport manager. The carrier, the head of the carrier and transport manager are not regarded as being of impeccable repute if they have been imposed an administrative penalty, and they have a criminal record for administrative violations, crimes and criminal offences. The following infringements are distinguished: 1) violations of commercial and insolvency law; 2) violations of the profession related to transport activities, conditions of pay and employment; 3) violations of road traffic regulations; 4) violations related to professional liability; 5) human and drug trafficking; 6) violations related to driving and rest time, working time and the installation and use of the control equipment; 7) violations of the maximum limit for the international transport commercial vehicle weight and measurement; 8) violations of the primary qualification of drivers and their continuing education; 9) violations related to the technical state of commercial vehicles on the road, including the compulsory annual motor vehicle roadworthiness tests; 10) violations relating to the access into the market of international cargo transportation by road transport, or, as the case may be, to the access into the market of passenger transport by road transport; 11) safety violations of the transport of dangerous cargoes by road transport; 12) violations related to installation and use of speed limiting equipment in certain categories of motor vehicles; 13) violations relating to driving licences, authorisation to pursue the professional activity and the transport of animals. Individuals convicted or penalised for analogous activities under foreign law are not regarded as being of good repute.

The transport manager can be the head of a legal entity or his another employee, or the carrier natural persons themselves, or the duties of the transport manager can be carried by a natural person contractually authorised by the carrier, who has the power to effectively and continuously manage the carrier’s transport business, i.e. to lead the road transport vehicle operation and maintenance, to approve transport contracts and documents, to manage general accounting, to distribute tasks to drivers and cargoes to vehicles, and to maintain safety procedures. The transport manager cannot manage transport activities of more than two different carriers conducted by using a total of not more than 30 vehicles with licence copies. In the case of management of one carrier transport activities, the number of vehicles with licence copies is unlimited.

It should be noted that the carrier can appoint the head of transport as the transport manager, because according to Article 4, Paragraph 1, Points a) and b) of the Regulation No. 1071/2009 the transport manager effectively and continuously manages the transport activities of the company and has to be factually related with the company, such as being its director.

The requirement of an appropriate financial standing is met if carriers natural persons and legal entities dispose over equity the value of which is at least EUR 9 000 when only one road vehicle is used, and EUR 5 000 for each additional road vehicle used. If the carrier does not yet possess any road vehicles that are in use, its financial condition is evaluated by the same procedure as in the case of use of one road vehicle.

The requirement of professional competence, which has to be met by the transport manager, implies a certain level of knowledge in the field of cargo transportation by road vehicles. The knowledge is monitored by taking a compulsory written examination which includes questions on civil, commercial, social and tax law, the corporate management and financial management, access into market, technical standards, and technical operation aspects, and road safety. After passing the exam, the State Road Transport Inspectorate shall issue a certificate of professional competence. The procedure of taking a professional competence exam is laid down by the Ministry of Transport and Communications (Ruling No. 3-124 by the Minister of Transport and Communications of the Republic of Lithuania of February 13, 2012, on the approval of professional competence examination procedures for the individuals leading the licenced activities of road transport.

Submission of Documents and Licensing
The carrier willing to obtain a licence or to extend its validity has to submit the following documents to the State Road Transport Inspectorate:
1) an application of a prescribed form;
2) a personal identity document or a copy of it (if a natural person is seeking to obtain a licence);
3) a professional competence certificate held by the carrier’s transport manager or a certified copy thereof;
4) documents proving an appropriate carrier’s financial condition. The legal entities shall submit an annual balance or the carrier’s certified copy thereof; the natural persons shall submit an equity statement;
5) if the head of the carrier and (or) transport manager used to previously reside in another Member State of the European Union, they shall submit document of a good repute, which usually is a certificate issued by competent authorities stating that the particular person has been (has not been) subject to administrative or criminal prosecution;
6) a profile of the person’s repute;
7) certificate of criminal record (absence of criminal record);
8) the transport manager’s employment contract or a contract with an individual authorised to have the duties as a transport manager, or the carrier’s certified copy thereof;
9) the documents supporting the right to the carrier’s control centre, if the carrier’s control centre does not match the registered office or place of residence of the carrier, if the carrier is a natural person (the Republic of Lithuania Government Resolution No. 1434 of December 7, 2011, on the approval of the road activities licensing rules (hereinafter referred to as the Rules), p. 16).

Licences are issued for a period of ten years (Article 8, Paragraph 8, p. 14 of the Rule of the CRT). Meanwhile, copies of licences shall be issued only before the licence expiration date (p. 15 of the Rules). When extending the validity of the licence, a new licence is issued (p. 17 of the Rules).

A licence is issued within 30 days from the date of receipt of the application and all the necessary documents in the licensing authority. At the same period the licence is extended or refused to be issued / extended (giving the reasons in writing) (p. 22 of the Rules).

For companies with licenced of road transport activity issued in accordance with the procedures laid down before December 4, 2011, are allowed to engage in activities before the date specified in the licence, but not longer than until December 3, 2016, if the company complies with the requirements set out under Article 3 of the Regulation (EC) Nr.1071/2009.

A Natural Person acting as the Carrier
A Natural Person can also be a carrier (Article 2, Paragraph 4 of the Regulation No. 1071/2009). When starting this activity, a natural person must submit an application to the State Tax Inspectorate to be recorded in the register of taxpayers. A natural person as the carrier operates on the basis of a business licence. A natural person engaged in cargo transportation activities must have a licence, and it is subject to the same requirements for the office, impeccable repute, financial standing and professional competence as those for the legal entity (Article 8 of the CRT).

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