Expanding an Australian business into Europe: why start in the Baltics

For most Australian companies, Europe is a long way away and a large, crowded market. The question is not only whether to go, but where to start. This guide explains why a small Baltic country such as Lithuania can be a practical first base inside the EU, what the new Australia-EU trade agreement changes, and how to approach the move in sensible steps.

The Australia-EU trade agreement, at the time of writing

Australia and the EU concluded negotiations on a free trade agreement on 24 March 2026, after almost eight years of talks. According to Austrade, once the agreement is fully implemented, 98% of the current value of Australia’s goods exports will enter the EU duty-free. All tariffs on Australian energy and resource products, including critical minerals, will go, and tariffs on advanced manufacturing and other industrial goods (except steel) will also be eliminated.

New Zealand’s Ministry of Foreign Affairs and Trade summarises the timing: the EU will remove tariffs on 97.8% of goods from Australia at entry into force, rising to 98% over seven years. Some sensitive farm products, such as beef, sheep meat, butter and sugar, will come under quotas instead. Signature is expected in late 2026 or early 2027, and entry into force possibly around the end of 2027.

So, at the time of writing (October 2026), the agreement is concluded but not yet in force. Price your European plans on today’s tariffs, and check Austrade or DFAT for the current status before you rely on the new rates.

Why a small country can be a smart first base

The EU works as one single market, with shared rules on goods, competition and much of trade. A company set up in one member state can sell across the others. That means your first base does not need to be your biggest market. It needs to be a place where you can set up properly, run costs sensibly and reach the customers you actually want.

Lithuania has a population of about 2.8 million, according to Invest Lithuania. You would not go there for the home market alone. You would go there for:

• an EU company and an EU address for contracts, invoicing and banking
• a lower cost base than many Western European countries
• access to the rest of the EU and to the markets east of it, including Central Asia

It is fair to say that a Baltic base is not right for everyone. If almost all of your buyers are in Germany or France, a local presence there may make more sense. A Baltic base suits companies that want a lean EU footprint first and a wider network later.

What Lithuania offers in practice

According to Invest Lithuania, company registration is straightforward and often completed in a matter of days. The private limited liability company (UAB) is the most common form for small and medium-sized businesses. You register for VAT once turnover exceeds €45,000.

On tax, Invest Lithuania gives these figures for 2026:

• corporate income tax at a standard rate of 17%, with a reduced 7% rate for small companies that meet certain conditions
• VAT at a standard rate of 21%, with reduced rates for some goods
• employer social security contributions of 1.77% of gross salaries, with employees paying 19.5%

Tax rules change, and the right structure depends on your group. Take advice from a qualified accountant in both countries before you set up.

The startup scene is also worth knowing about. Invest Lithuania reports over 1,100 active startups and five unicorns, including Vinted and Nord Security. For an Australian tech company, that means a local pool of people who have scaled businesses before.

Costs: what the official data shows

Eurostat’s price level index compares what households pay for the same goods and services across countries, with the EU average set at 100. For 2025, Eurostat puts Lithuania at 82.8, Latvia at 83.2, Estonia at 101.2, Germany at 108.3 and Ireland at 136.2.

This is not a measure of salaries or office rents, and it does not adjust for income levels. It is a useful signal, though: day-to-day costs in Lithuania sit well below those in Ireland or Germany.

Getting people there

Australians can visit the Schengen area without a visa for up to 90 days in any 180-day period, as set out in the EU’s visa rules. A short visit is enough for meetings, scouting and setting up. It is not a basis for living in Europe or working there long term.

For longer stays, each country has its own residence routes. In Lithuania, founders of innovative companies can apply through the Startup Visa programme run by Startup Lithuania. A successful applicant receives a confirmation letter that supports a visa and temporary residence permit application. The permit is valid for two years, with a possibility to extend it to five. The final decision always rests with the Migration Department, and no one can guarantee a residence permit.

Which route fits a particular person depends on their circumstances. A regulated immigration lawyer or adviser can confirm the options.

A sensible sequence

Most companies do not need to do everything at once. A common path looks like this:

1. Test demand first. Talk to buyers and distributors, attend a trade event, and check that your product or service sells in Europe.
2. Choose a first base. Compare costs, talent, tax and where your customers are. Lithuania is one option among several.
3. Set up the company. Register, open a bank account and sort out VAT and accounting.
4. Move or hire people. Decide who relocates and who you hire locally, and check the permits each person needs.
5. Grow from there. Add distributors, partners and markets as the base proves itself.

Keep an eye on the trade agreement as it moves towards entry into force. Its tariff cuts could change your pricing in Europe.

How Mavericks Go helps

Mavericks Go takes companies into new markets: a market briefing and entry plan, introductions to local distributors, buyers and counterparts, trade missions, a presence at the Mavericks editions, and support after you land. Mavericks Connect makes the introductions, every Go deal is screened against EU sanctions, and legal work is handled by regulated partner law firms.