Do you need a company to start dropshipping?

Do you need a company to start dropshipping?

ArtemPostavnyi
Visitor
1 0 1

Hello, I am from Lithuania. I want to start dropshiping. Do i need to create a company or make myself an individual entrepreneur in local tax office for such type of business?

Reply 1 (1)

DaisyVo
Shopify Partner
3735 403 489

Hi @ArtemPostavnyi 

Great to see you're getting into dropshipping—it's an exciting business model with a lot of potential. I totally get your concern about whether you need to register as a business before starting. Let me break it down for you.

Do You Need a Company for Dropshipping in Lithuania?

The short answer is no, you don’t need to start with a registered company—at least not right away. You can start as an individual entrepreneur (sole proprietor) and register with your local tax office when you begin making consistent revenue. However, it’s always a good idea to check with a local accountant or tax advisor since tax laws can change.

Why You Might Want to Register a Business

Even though it’s not required at the start, here are a few reasons why many dropshippers eventually register their businesses:

  • Taxes & Legal Compliance – If you make consistent income, the Lithuanian tax office will expect you to declare and pay taxes. Registering as an individual entrepreneur (or company) makes this process smoother.
  • Supplier Requirements – Some suppliers (especially wholesalers) may require a business license or VAT number before working with you.
  • Payment Processing – If you plan to use Shopify Payments or PayPal, they may ask for business verification at some point.
  • Scaling & Growth – If you want to scale, hire employees, or protect your personal assets, having a formal business entity (like a UAB or MB in Lithuania) can be beneficial.

What’s the Best Approach?

  1. Start as an individual – You can begin testing products and setting up your Shopify store without immediately registering a company.
  2. Track Your Income – If you start making steady sales, then register as an individual entrepreneur or consider forming a business (like an MB).
  3. Stay Compliant – Once you're making consistent money, check with a local tax professional to ensure you're paying the correct taxes and following regulations.

Final Thoughts

Many dropshippers start informally to test the waters and only register when they start seeing profits. Just make sure to report your income once it becomes regular to avoid any legal issues. If you’re unsure, consulting a local tax advisor will always be your best bet.

If you need extra help, just let me know asap. Thanks
Daisy.

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