Lithuania for export, import, subcontracting and investments
Lithuania with its 2.8 million people is the largest market in the Baltic States. Its economy is expanding, and the GDP is expected to grow by 5 per cent in 2021. Lithuania is situated close to Finland with excellent connections.
Lithuania has been rated on the attractiveness for global manufacturing among the top 10 locations in the world and among the top 5 in Europe by the Global Manufacturing Risk Index (2020), Cushman & Wakefield survey. In 2020, the top 5 export directions for this sector were Germany, Sweden, Poland, the Netherlands, and Finland.
Manufacturing companies in Lithuania are becoming increasingly integrated into the EU value chains. Western Shipyard in Lithuania will become the largest ship repair hub and, together with the shipyards in Tallinn and Turku, will enable the Group to compete with the greatest ship repair companies of Western and Northern Europe.
Finnish and Lithuanian companies had a great possibility to get to know each other at the Subcontracting Trade Fair in Tampere this fall. According to Mr. Karolis Skebas, Export Development Manager, LINPRA, Finnish enterprises showed more interest in Lithuanian manufacturing companies, their products, and skills than before.
Manufacturing and logistic hub and skilled people
Lithuania is seen as manufacturing and logistics hub for the Northern and Western EU as well for the CIS countries. In Lithuania there are 4 international airports. Klaipeda, the ice-free seaport is the largest port in the Baltic States. Lithuania is also a leader in road and rail logistics in the EU. 56 per cent of the population has a higher education degree and 52 per cent speak at least two foreign languages.
Free trade zones with incentives
In Lithuania, there are 7 free trade zones (FEZ): Kaunas, Klaipėda, Marijampolė, Panevėžys, Kėdainiai, Šiauliai and Akmenė. These zones are situated in perfect location to serve different markets with functioning infrastructure. It is also easy to set up a business in a FEZ. These zones also offer incentives for enterprises. Companies will have no corporate tax in the first 10 years and ½ of the corporate tax over the next 6 years. There is no real estate tax and no tax on dividends for foreign investors. Lithuania also offers a “Green corridor” or the large-scale investment projects with 0 per cent corporate tax up to 20 years if the enterprise invests more than 20 million euros, creates at least 150 new jobs, and employs employers at least for 5 years, states Mr. Giedrius Valuckas, President, Association of Lithuanian Free Economic zones.
Advise for companies starting their business in Lithuania
Enterprises should pay attention to the corporate structure which depends on the size and the activities of the company. Private limited company (UAB) is the most common business structure in Lithuania. The CEO has much power, but it can be limited by the Board of Directors. In Lithuania, companies can base their business on trust, but they should not forget the legal side of their activities. Enterprises should remember that a written agreement is the best evidence to show what the parties have agreed on. Local bureaucracy and formalities need a lot of attention too. Some transactions should be notarised and sometimes licenses, and permits are needed. Lithuania has very advanced e-services which help companies tackle bureaucracy. Every company should study employment regulations to avoid difficulties and observe formalities carefully. Opening a bank account can be challenging for a foreign company and that’s why companies should make preparation in advance. Lithuania is, however, a perfect place to do business if you do your homework well and in advance, explains Mr. Laimonas Markauskas, Chairman Finnish Lithuanian Chamber of Commerce in Lithuania.
Disruptions in global supply chains – an opportunity for the Nordic-Baltic region and Lithuania to gain new market shares? – the webinar was arranged on the 16th November 2021 by the Finland-Lithuania Business Association in cooperation with the Lithuanian Embassy in Helsinki and Finnish Lithuanian Chamber of Commerce in Vilnius.
Starting Business in Lithuania: Five most important insights (pdf)
Linpra engineering industries sector in Lithuania (pdf)
Written by Ms. Anne Hatanpää, General Secretary of the Finland-Lithuania Business Association.