START WITH US YOUR BUSINESS IN LITHUANIA

Indian-Baltic Chamber of Commerce invites foreign businesses to use the opportunity to expand their activities into the Lithuanian market, a gateway to the European Union and the markets in the East!

About business in Lithuania

Trade Conditions

After joining the EU on May 1st, 2004, Lithuania became a part of the internal market of the EU and there are no restrictions applied for the movement of goods and capital. Temporary restrictions of some old-EU countries are applied for Lithuania for the movement of services and labour, however they are going to be lifted in the near future. Foreign trade with the non-EU countries is regulated by EU agreements.

For more information please see www.ukmin.lt and www.cust.lt

Investment and bilateral trade drivers:

• Crossroads of Central and Western Europe, Scandinavian and Baltic as well as CIS markets
• Political stability and economic freedom
• Well-developed EU prime transport centre (two international corridors, ice-free seaport, international airports and railways)
• Diverse energy capacities
• Strong knowledge economy platform, innovative businesses
• One of the EU’s most educated and multilingual people
• Competitive business set-up and operation costs
• EU Structural Funds’ and State’s support
• Largest and most diversified industry in North-eastern Europe

Attractive business sectors:

Shared services and business process outsourcing (BPO) – well-educated multilingual labour pool

ICT – modern knowledge economy; companies leading among the Baltic States

Lasers – globally acknowledged production and inventions

Biotech – production does not have equivalents in Central and Eastern Europe

Plastics – with three huge plants leading in the region

Metal processing, machinery and electric equipment – widely-acknowledged high-tech products

Furniture & wood processing – among the most important suppliers for IKEA

Textile & clothing – one of the most specialised EU countries in the textile and clothing sector

Food – internationally acknowledged and in-demand production

Real estate – the largest market among the Baltic States with great development potential

Tourism – untouched ecological countryside, well developed rural tourism network, high demand for entertainment services; forthcoming Lithuanian events of international importance

Taxes:

• Corporate profit tax – 20%
• Personal income tax – 15% (+ 6% health insurance contribution)
• Value added tax – 21%
• Property tax – 1%
• Social security tax for employer - 31% (+ employee's contribution of 3%)

Human resources:

• ~ 40% of the labour force with higher education
• Every third Lithuanian speaks English, and eight Lithuanians out of 10 speak Russian
• Average monthly gross salary – EUR 672

Property rental rates, EUR / m2 per month:

• New warehouses – EUR 4 to 6
•  A-class office space – EUR 10 to 17
• B-class office space – EUR 6 to13
• High-street retail space – EUR 20 to 55
• Retail space in shopping centres – EUR 10 to 30
  
  

Business set up costs and time:

• up to EUR 600
• up to 26 days 

Statistics

In 2009, exports amounted to EUR 11.7 billion, imports – EUR 13.1 billion. Foreign trade deficit amounted to EUR 1.3 billion, which is by 74.8 per cent less than in 2008. Exports and imports decreased by 26.6 and 38.2 per cent respectively; mineral products excluded, exports decreased by 23.3, while imports – by 38 per cent. Exports of goods of Lithuanian origin decreased by 27.2 per cent, mineral products excluded – by 21.9 per cent.

Lithuania’s key trading partners were the EU-27, accounting for 64.3% of Lithuania’s total exports and 58.8% of total imports.

Lithuania’s key export partners were Russia (13.2%), Latvia (10%), Germany (9.7%), Poland (7.2%) and Estonia (7.2%). Main export commodities include: mineral products (21.5%), electrical machinery and mechanical equipment (10%), chemical products (9.1%) and transport vehicles and associated transport equipment (7.3%).

Lithuania’s key import partners were Russia (30.1%), Germany (11.2%), Poland (10%) and Latvia (6.42%). Main import commodities include: mineral products (29.3%), electrical machinery and mechanical equipment (13.1%), chemical products (12.3%) and transport vehicles and associated transport equipment (6.3%).

Lithuania's trade profile

Major business partners:

• Neighbouring countries: Russia (5.3% of FDI, 16.1% of exports and 30.1% of imports), Poland (5.9% of total FDI in 2008,  5.8% of exports and 10% of imports), Estonia (7.6% of FDI, 5.7% of exports), Latvia (6.2% of total FDI , 11.6% of exports and 5.2% of imports)
• Scandinavian countries: Sweden (16.8% of FDI), Denmark (8.7% of FDI), Finland (5.6% of FDI)
• EU-27 countries represent about 60.3% of Lithuanian foreign trade flows and more than 81.2% of FDI in Lithuania

Information sources: www.lda.lt, www.ukmin.lt, www.cust.lt