Lithuania attempts to encourage investments from foreign residents. The following are among the reasons that foreign investors are attracted to Lithuania:
A political regime with excellent foreign relations and stability in all that concerns the ethnic minority in Lithuania.
A strategic location that links the countries of the EU to the countries of the former Soviet Union, including convenient land links and a seaport.
Attractive to foreign investors, Lithuania was considered as one of the countries with the fastest rate of foreign investment in Central and Eastern Europe. As of 1.1.2005 FDI in Lithuania was 4.7 EUR billions.
The transport infrastructure with 4 lane freeways. The EU also intends to build two main transport routes in Lithuania, of the 10 planned, for speedy passage within Europe.
An educated and proficient labor force at very low cost. The monthly wage is very much lower than the EU standard and even lower than the countries of Eastern Europe.
Among other investors in Lithuania are companies such as Siemens, Motorola, Philips, Philip Morris, Carlsberg and others.
Restrictions on Foreign Ownership
In general, there is no discrimination in Lithuania between foreign and local investors. Nevertheless, any investment is prohibited in businesses connected with the national security of Lithuania. Similarly, investments by foreign investors in holding companies of lotteries is prohibited. In some activities, such as pharmacy, the import and export of tobacco, oil and more, a special license is required.
Free Economic Zones (FEZ)
Foreign and Lithuanian companies can invest in a FEZ. At present there are 2 such zones in Lithuania, in Klaipeda and Kaunas
The benefits to investors include, among others:
The tax benefits.
- A company that invests more than 1 million EUR in Lithuania, when at least 75% of the company activity is in the FEZ, is exempt from corporation tax for 5 years with a further reduction of 50% on corporation tax for the next ten years.
- Companies investing even less than 1 million EUR in FEZ are exempt from VAT and real estate tax.
Other benefits
Companies who have at least 40% employees belonging to weak groups can get exemption from profit tax.
You can find detailed info on Lithuania investment incentives in www.lda.lt
