Lithuania.

Sound
in Resources for
Businesses’ 2010
 Lithuania in the world
• Territory: 65,300 km2
• Common borders with:
Latvia
Belarus
Poland
Russia (Kaliningrad Region)
• Population: 3.4 million (84% of
Lithuanians, 7% Poles, 6.5%
Russians )
• Capital and biggest city: Vilnius
(population: 549,000)
• State language: Lithuanian
• State Government: Democratic
Republic
• Religion: 80% of Roman
Catholics, 5% Orthodox
Business opportunities
on the Lithuanian market

• International business presence in the EU,

Scandinavian and Eastern markets

• Excellent infrastructure and communications network

• High operational quality at a competitive cost

• Financial support and fiscal incentives for businesses

• Non-financial support
 International business presence

• Member of the EU, NATO and BSR -

Schengen area 110 million

• Crossroads of three huge

markets

EU - 340 CIS -
million 250 million
Half of the Baltic States’ economy

Source: Lithuanian Department of Statistics, www.stat.gov.lt

 Lithuanian economy at a glance
2005 2006 2007 2008 2009 2010F 2011F

GDP, EUR bn 20.9 23.9 28.6 32.2 26.7 27.7 28.6

GDP growth (annual),
7.8 7.8 9.8 2.8 -14.8 1.6 2.8
%
Annual inflation, % 2.7 3.8 5.8 11.1 4.2 1.1 1.8
FDI, EUR bn 4.7 6.9 8.4 10.3 9.2 - -
Exports, EUR bn 9.5 11.3 12.5 16.1 11.7 16.8 -
Imports, EUR bn 12.4 15.4 17.8 21.1 13.1 16.2 -
Unemployment, % 8.3 5.6 4.3 5.8 13.7 17.9 16.2

Sources: Lithuanian Department of Statistics, www.stat.gov.lt, Ministry of Finance, www.finmin.lt

GDP by economic sectors, 2009

Source: Lithuanian Department of Statistics, www.stat.gov.lt

 FDI in Lithuania, EUR bn

12
10,3
10 9,2 9,6
8,4
8 6,9
6 4,7
3,9 3,9
4 2,7 3,1
2,4
2
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Lithuanian Department of Statistics, www.stat.gov.lt

Major countries investors, 2009

Source: Lithuanian Department of Statistics, www.stat.gov.lt

FDI in Lithuania by economic sector, 2009

Electricity, Gas & Water 8%

Wholesale & Retail Trade 11,3%
Financial Intermediation 13,5%
Transport & Warehousing 13,6%
Real Estate 15,4%
Manufacturing 26,7%

0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0%

Source: Lithuanian Department of Statistics, www.stat.gov.lt

Multinationals feeling at home
Lithuania’s foreign trade, EUR bn

Source: Lithuanian Department of Statistics, www.stat.gov.lt

 Lithuanian export dynamics
Y2004, EUR M Y2009, EUR M

9,4 693,6 1562,3

21,9
353,2
EU 347,8
CIS EU
CIS
USA
USA
CHINA CHINA
1221,2
RUSSIA
RUSSIA

2765,9
5001,7 7583,6
Lithuania’s major exports
destinations, 2009

Source: Lithuanian Department of Statistics, www.stat.gov.lt

Major importers to Lithuania, 2009

Source: Lithuanian Department of Statistics, www.stat.gov.lt

Lithuania’s exports by
products, 2009, %

Source: Lithuanian Department of Statistics, www,stat,gov,lt

Lithuania’s imports by
products, 2009, %

Source: Lithuanian Department of Statistics, www,stat,gov,lt

 Lithuania’s “gold and oil”
• One of the best-educated people in Central and Eastern Europe;

• 23 universities and 23 colleges with a total enrolment of 201,000

students; 35 science institutes

• Kaunas University of Technology – largest technical university in the

Baltic States

• One of the most multilingual peoples in the EU – among five EU

countries with the highest percentage of people speaking at least one
foreign language (mostly English, Russian and Polish)

Sources: www.eurostat.com
 Wages, 2010 1Q
Wages EUR

Minimal hourly wages 1.40

Minimal monthly wages 232

Average monthly wages 588

Source: Lithuanian Statistics Department, www.stat.gov.lt

Main business taxes, 2009
Tax %

Corporate profit tax 15

VAT 21

Dividends 0* to 15

Personal income tax 15

(+ 6% health insurance
contribution)
Social security tax for employer 31
(+employee’s contribution of
3%)

* 0% tax on dividends applies when an investor controls at least 10%

of voting shares in the enterprise for the period of at least 12 months.
 Business set-up costs

• Opening a company:

up to EUR 600 (documentation preparation,

notary public services, registration)
and up to 15 days

• Minimum authorized capital for:

private companies – EUR 2.900

public companies – EUR 43.450
Excellent infrastructure
and communications network
• The European Union has recognized
Lithuania as the prime transport centre
in the region linking the EU with the East

• Crossroads of international transport

routes – two EU- priority transport
corridors

• International airports (located in

Central, Eastern and Western Lithuania)
with direct routes to most European
cities

• Northernmost and only ice-free seaport

on the eastern shore of the Baltic Sea –
Klaipėda State Seaport
Klaipėda State Seaport –
major transport hub
• Transport hub, connecting sea, land and
railway routes from East and West; main
shipping lines to the ports of Western Europe,
South-East Asia and the continent of America
pass through the port

• Handling more goods than all the ports of

Ireland combined; container handling capacity
the greatest among the Baltic ports

• Handling roughly 7,000 ships and 30 m tonnes

of cargo every year, accepting large tonnage
vessels: dry-cargo vessels up to 80,000 DWT,
tankers up to 150,000 DWT and cruise ships up
to 270 meters length
Dense network of shipping lines
Financial support & fiscal incentives
• Financial packages offered by the Government to cover wage and
personnel training costs, purchase of equipment etc.

• Tax incentives for investments into new technologies and R&D

• Land and real estate tax relieves

• 0% taxation on dividends when an investor controls at least 10%

of voting shares in the enterprise for the period of at least 12
months

• Tax “holidays” in 2 free economic zones

Ready-for-investment locations
• 2 free economic zones (FEZ):

- 0% corporate tax during the first

6 years and only 50% of
corporate tax over the next 10
years
- 0% tax on dividends
- 0% real estate tax

• 4 industrial parks (IP):

- Greenfield territory from 15 to

219 ha (corresponding to the
investor requirements)
- All necessary physical
infrastructure
- Tax incentives
 Valleys for fusion
of science and
business
• 5 valleys:

- Network of R&D centres in 3 largest cities

- Specialization in different scientific reasearch areas
- Great concentration of talent
- Sufficient supply of new office space
- Government’s support (EUR 400 M grants in 2010-2012)
 Incentives for new
technologies and R&D
• Scientific research and experimental development (R&D) costs
deducted 3 times from income for the tax period during which
they were incurred, if the performed R&D works are related to the
usual or intended activities of the entity that generate or will
generate income or economic benefit

• Super-accelerated depreciation - acquisition price of fixed assets

used in the R&D activities can be written-off within two years

• Investments into substantial technological improvements will

entitle the companies to reduce the taxable profit down by 50%
EU support for Lithuania
in 2007-2013
• approx. EUR 7 billion (approx. EUR 3 billion in 2004-2006)

Operational Programme for Economic Growth 45.7%

Operational Programme for the Promotion of 39.1%

Cohesion

Operational Programme for the Development 13.8%

of Human Resources

Operational Programme of Technical

1.4%
Assistance

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Source: Ministry of Finance, www.finmin.lt

 Non-financial support
• Agreements with the Government and Ministry of economy,
when FDI exceeds EUR 6 M or EUR 1.5 M, respectively

• Government’s assistance for VIP FDI projects

• Tailor-made information packages, guidance through all the

investment process (contact building, arranging visits and
meetings, dealing with authorities, investment site selection
etc.) as well as investment aftercare by Invest Lithuania
 Diversified industry

• 25,9% of total FDI settles

down in industry
(EUR 2,5 bn as of Q1 2010)

• Industry+construction –
29% of of total FDI
(25% country’s GDP)

Source: Lithuanian Department of Statistics, www.stat.gov.lt

 Attractive economy sectors (1)
• Transport & logistics – excellent geographical location and infrastructure;
prime transport centre in the region linking the EU with the East

• Energy – well developed infrastructure and international projects

• Shared services and business process outsourcing (BPO) – well-educated

multilingual labour pool

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

States

• Biotech – World-class progress; production does not have equivalents in

Central and Eastern Europe

• Plastics – with three huge plants leading in the region

• Lasers – globally acknowledged production and inventions

 Attractive economy sectors (2)
• Metal processing, machinery & electric equipment – widely-acknowledged
high-tech products

• Furniture & wood processing – one of the largest factories in Eastern Europe;
among most important suppliers for IKEA

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

• Food – internationally acknowledged production; widely demanded

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

• Tourism – untouched ecological nature, well developed countryside tourism

network, high demand for entertainment services
 Major opportunities:
Transport and logistics (1)
Lithuania is the prime transport centre in the region linking
the EU with the East (EU Transportation Commission)
• two transport corridors (I and IX B) and their branches (IA and
IXD) (80 % of European freight is transported via international
transport corridors crossing Lithuania)
• the northernmost ice-free seaport on the eastern cost of the
Baltic sea – Klaipėda State Seaport: annual cargo turnover of
30 million
• the best road system in the region
• 3 international airports
• 3 international and regionally important public logistic centres
under construction

Sources: www.stat.gov.lt; www.transp.lt; www.portofklaipeda.lt

 Major opportunities:
Transport and logistics (2)
• 13.5% of GDP
• 67% of services exported
• 3% of country’s FDI
• approx. 5.900 companies
• 64,000 employees
• 20.246 trucks

Sources: www.stat.gov.lt; www.transp.lt; www.portofklaipeda.lt

 Major opportunities:
Energy (1)
Well developed infrastructure and international projects
• the only oil refinery in the Baltic States, oil export and
import terminal, oil products import-export terminal,
natural gas supply system and central heating system
• nuclear, large combustion plants, co-generation plants,
hydro and pump storage power plants
• planned electricity links with Western and Nordic
markets, construction of a new nuclear power plant and
construction of liquefied natural gas import terminal

Source: www.stat.gov.lt
Major opportunities:
Energy (2)
• 3.86% of GDP
• 0.7% of exports
• 8.4% of country’s FDI
• 18.500 employees

Source: www.stat.gov.lt
 Major opportunities:
Shared services and business
process outsourcing (BPO) (1)
Well-educated multilingual labour pool and leading ICT resources
• ~30% of population with higher education – one of the best-educated
workforces in CEE
• ~90% of Lithuanians speak at least one foreign language:
• every second speaks two foreign languages, every third speaks English
• 23 universities and 23 colleges:
• more than 40,000 university and college graduates every year
• excellent ICT infrastructure:

- Highest fiber penetration (18%) in Europe (5th in the world)

- World’s fastest upload Internet and 4th by broadband quality score
- Densest network of public Internet access points (875) in Europe
- EU’s highest GSM penetration (147%)
- Global leadership in the number of mobile telephone subscribers per 100
population
Sources: www.stat.gov.lt; www.datamonitor.com; www.smm.lt; www.rrt.lt; World Economic Forum Global Competitiveness Report
2008-2009; GSM European Coverage 2007
 Major opportunities:
Shared services and business
process outsourcing (BPO) (2)
• 11 contact centres
• Approx. 2.500 employees

Sources: www.stat.gov.lt; www.datamonitor.com; www.smm.lt; www.rrt.lt; World Economic Forum Global

Competitiveness Report 2008-2009; GSM European Coverage 2007
 Major opportunities:
ICT (1)
Modern knowledge economy
• development of knowledge society is a national priority funded by
the State and the EU
• 13 out of 20 largest IT companies in the Baltic States are based in
Lithuania
• 7 universities and 8 colleges with IT curriculums
• excellent ICT infrastructure:

- Highest fiber penetration (18%) in Europe (5th in the world)

- World’s fastest upload Internet and 4th by broadband quality score
- Densest network of public Internet access points (875) in Europe
- EU’s highest GSM penetration (147%)
- Global leadership in the number of mobile telephone subscribers per 100
population

Sources: www.stat.gov.lt; www.primeinvestment.lt; www.rrt.lt; World Economic Forum Global Competitiveness

Report 2008-2009; GSM European Coverage 2007
 Major opportunities:
ICT (2)
• 2.1% of GDP
• 3.5% of total exports
• 13.7% of total FDI in the country
• ~ 2.000 companies
• 24.000 employees

Sources: www.stat.gov.lt; www.primeinvestment.lt; www.rrt.lt; World Economic Forum Global Competitiveness Report 2008-
2009; GSM European Coverage 2007
 Major opportunities:
Biotech industry (1)
World-class exemplary performance

• Lithuania – the biotech hub of CEE; products don’t have

equivalents in CEE

• World-class research and inventions, e.g TevaGrastim® cancer

treatment medicine, 30 % cheaper but as effective as existing
medicine

• 15 biotech research centres

• 1st Baltic medical and pharmaceutical valley in the Baltic

countries

• 16 institutions (including 5 major universities) train biotech

specialists for science and business

Source: www.stat.gov.lt
Major opportunities:
Biotech industry (2)

• Annual growth of ~22 %

• 0.1% of GDP
• 99% exported to 86 countries
• Over 1.000 employees

Source: www.stat.gov.lt
 Major opportunities:
Plastics (1)
3 regional leaders are based Lithuania
• worlds' best PET technologies 
• flexibility and adaptability to market changes –pre-forms of
various colours, weight and shape
• Lithuanian trademark NEOPET® is recognised as a premium-
quality brand among European customers
• strict procedures of quality control and manufacturers’
orientation to international ISO standards
• highly educated specialists – 2 universities prepare specialists
for plastics industry

Source: www.stat.gov.lt
Major opportunities:
Plastics (2)

• 0.8% of GDP
• 58% of production exported
• 0.9% of total FDI in the country
• more than 360 companies
• ~10.000 employees

Source: www.stat.gov.lt
 Major opportunities:
Laser technologies (1)
Globally acknowledged production and inventions

• Development of unique laser devices:

- 50 % of the world market for high-energy pico-second lasers

- Leadership in global production (80 %) of ultra-fast parametric

light generators

• Global leadership in applying fundamental research into

manufacture: 11 science centres and laser technology research
centres carry out fundamental research

Source: www.stat.gov.lt
Major opportunities:
Laser technologies (2)
• Annual growth of ~20 %

• Largest share in value added created on the national market

• Sales of almost EUR 30M; increase of 2.4 times in last 5 years

• ~80 % exported to nearly 60 countries

• ~450 employees

Source: www.stat.gov.lt
 Major opportunities:
Metal processing, machinery and
electric equipment (1)
Widely-acknowledged high-tech products
• flexibility to satisfy small and non-standard orders
• subcontracting for famous brands
• quality management system ISO 9001:2000
• high potential for research and development (R&D)
• biggest technical university in the Baltic countries -
17,000 students
• Baltic leaders in the sector operate in Lithuania

Sources: www.stat.gov.lt; www.ktu.lt

 Major opportunities:
Metal processing, machinery
and electric equipment (2)
• 4.9% of GDP
• 64% of production exported
• 1.4% of country’s FDI
• ~1.000 companies
• 46,000 employees

Sources: www.stat.gov.lt; www.ktu.lt

 Major opportunities:
Furniture and wood processing (1)
Lithuania’s largest factories are among the most important
suppliers for IKEA
• highly forested country, deep traditions in the wood processing
industry
• production meets the highest quality requirements and design
standards
• competitive prices
• good geographical location – short delivery terms
• flexibility to fulfil non- standard orders
• biggest office furniture factory (30,000 sq.m.) in the Baltic
States

Source: www.stat.gov.lt
 Major opportunities:
Furniture and wood processing (2)
• 1.8% of GDP
• 55 of production exported
• 1.5% of country’s FDI
• more than 1,570 companies
• over 50,000 employees

Source: www.stat.gov.lt
 Major opportunities:
Textile and clothing (1)
One of the most specialised EU countries in the textile
and clothing sector
• long-term traditions
• 2,500 new specialists are prepared annually
• flexibility and short delivery terms
• high quality and attractive design production meets
European standards

Source: www.stat.gov.lt; www.latia.lt

 Major opportunities:
Textile and clothing (2)
• 1.8% of GDP
• 76% of production exported; 84% exported to EU
• 1.3 % of country’s FDI
• more than 1,000 companies
• 40,000 employees

Source: www.stat.gov.lt; www.latia.lt

 Major opportunities:
Food industry (1)
Internationaly acknowledged production
• deep manufacturing traditions
• favourable climate for agriculture
• well developed transport infrastructure
• favourable geographic location
• modern technologies
• Lithuanian beer was awarded at “European Beer Star
Awards”, “World Beer Cup” and “World Beer Championship”

Sources: www.stat.gov.lt; www.litfood.lt

 Major opportunities:
Food industry (2)
• 3.6% of GDP
• 36% of production exported
• 4.2% of total FDI in the country
• dairy production makes 15% of food exports, 58% of dairy
production exported to the EU
• over 57,000 employees
• sector accounts for a major share of the added value (20.9
%) created by the Lithuanian manufacturing industry

Sources: www.stat.gov.lt; www.litfood.lt

 Major opportunities:
Real estate and construction (1)
Great development potential
• Lithuania - one of the EU leaders in the retail market
growth (12.6%)
• among the most developed European countries in
terms of shopping centres per capita (165 q.m.)
• modern A and B class offices across the country
• new retail projects across the country
• high potential for the development of economy
accommodation and recreation (SPA) hotels as well
as conference tourism facilities across all the country

Sources: www.stat.gov.lt; www.eurostat.com; www.colliers.lt; www.resolution.lt

 Major opportunities:
Real estate and construction (2)

• 21% of GDP (2007)

• 9.7% of country’s FDI
• over 244,000 employees

Sources: www.stat.gov.lt; www.eurostat.com; www.colliers.lt; www.resolution.lt

 Major opportunities:
Tourism (1)
Untouched ecological nature, well developed countryside tourism
network, high demand for entertainment services
• unique costal area of almost 100 km
• rich natural resources (22,000 rivers and rivulets, about 3,000
lakes)
• 4 Lithuanian sights and 2 cultural traditions are on the UNESCO
World Heritage Lists
• modern up-to date SPA resorts in an ecological environment
(Druskininkai, Birstonas, Neringa ir Palanga)
• developed recreational infrastructure: 2 world-standard water
amusement parks, 5 ice rinks, a number of theatre and cinema
halls, multifunctional amusement centres
• well-known cruise lines regularly visit Klaipeda State Seaport

Sources: www.stat.gov.lt; www.tourism.lt, www.portofklaipeda.lt

Major opportunities:
Tourism (2)
• 2.7% of GDP
• value added growth of 10%
• annual growth of approx. 8% of the
accommodation of foreign tourists in the
country
• 46.800 employees in the sector

Sources: www.stat.gov.lt; www.tourism.lt, www.portofklaipeda.lt

 Lithuanian market prospects
• Northern Europe Service Hub 2015:

- B2B services
- Logistics centre
- Medical services centre

• Centre of Excellence and Innovation for Traditional Industries 2015

• Northern Europe Innovation Centre 2020

 High quality of life

• Quality of life: one of the highest in the EU; higher than Sweden,
Great Britain and Greece

• Among TOP 10 least expensive countries in Europe

• Almost 3.800 medical institutions, more than 13 thous. doctors,

400 doctors for 100,000 inhabitants

• 3.893 wireless Internet zones

Sources: International Living 2010 Quality of Life Index, Eurostat; Communications Regulatory Authority
Perfect place for vacation

• 4 UNESCO World Heritage sites

• Well-preserved nature, ecological tourism
• World-class entertainment and leisure services,
international cultural festivals