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In this page: FDI in Figures | Why You Should Choose to Invest in Lithuania | Procedures Relative to Foreign Investment | Investment Opportunities

 

FDI in Figures

In a context where global foreign investment increased by 10.9% in 2013, in particular in Europe (+25.2%) and in Latin America (+17.5%), FDI flows to developing economies reached a new high of US$759 billion. However macroeconomic fragility and policy uncertainties are driving investors to caution.

According to the Lithuanian Statistics Department, foreign direct investment dropped slightly in 2009 - due to the effect of the crisis - but FDI flows subsequently accelerated. Thanks to the improvement in the economic situation, FDI flows began to grow again the following year (+10% in 2010), reaching EUR 558 million. FDI stock remains mostly held by Scandinavian companies, shareholders of the major banking institutions in Lithuania, as well as by Germany and Poland. Sweden remains the country's main investor, particularly in the energy sector. FDI level in 2013 reached only USD 900 million. FDI stocks have remained stable since 2009 and experts seem optimistic regarding the future. Over the last year, the largest investments were made in manufacturing, financial and insurance and wholesale and retail trade.

Information on the 2013 FDI influx in this region can be accessed in the Global Investment Trade Monitor published in January 2014 by the United Nations Conference on Trade and Development (UNCTAD).

 

Country Comparison For the Protection of Investors

  Lithuania Eastern Europe & Central Asia United States Germany
Index of Transaction Transparency* 7.0 7.0 7.0 5.0
Index of Manager’s Responsibility** 4.0 5.0 9.0 5.0
Index of Shareholders’ Power*** 6.0 9.0 5.0
Index of Investor Protection**** 5.7 5.9 8.3 5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

 
Foreign Direct Investment 201120122013
FDI Inward Flow (million USD) 1,448700531
FDI Stock (million USD) 14,26616,03317,049
Performance Index*, Ranking on 181 Economies 137--
Potential Index**, Ranking on 177 Economies 65--
Number of Greenfield Investments*** 404343
FDI Inwards (in % of GFCF****) 18.59.96.7
FDI Stock (in % of GDP) 33.137.935.8

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

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Why You Should Choose to Invest in Lithuania

Strong Points
Lithuania is ranked among the fastest growing economies in the European Union. It offers investors a diversified economy, a skilled workforce, low corporate taxation, the best developed road network in the region and a stable and democratic political system. The country is a member of the European Union and at the same time it is close to the eastern European countries. Lithuanian legislation offers equal protection for both foreign and domestic investments.
Lithuania is going to benefit from significant European Union assistance over the period of 2007-2013, which means the country is going to be able to invest in infrastructures and business opportunities will be available to local and foreign investors.
Weak Points
The country has a number of weak points:
- Lithuania's income level is still below the European countries' average. This involves re-adjusting the selling prices of products;
- There is a high rate of Lithuanians emigrating to other European countries;
- High wage inflation; and
- Relatively inefficient bureaucracy. Corruption and a lack of transparency in certain areas of the economy slow down the country's development and could discourage potential investors.
Government Measures to Motivate or Restrict FDI
Lithuania's laws ensure equal treatment between foreigners and domestic investors. No special permit from government authorities is necessary in order to invest foreign capital in Lithuania. Apart from a few exceptions, nearly all sectors of the economy are freely accessible. To encourage investment, the government has also created free economic zones with tax benefits and one-stop-shop services.

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Procedures Relative to Foreign Investment

Freedom of Establishment
Freedom of establishment is guaranteed. Foreign entities are allowed to establish branches or representatives offices ; there are no limits on foreign ownership or control.
Acquisition of Holdings
A majority holding interest in the capital of a local company is legal in Lithuania.
Obligation to Declare
There are no particular regulations or obligations to declare for foreign investment. However, there are some areas of the economy where investment is limited (investment in sectors related to the security and defense of the State, licensing is necessary for activities related to human life, health and which are potentially risky, non-Lithuanians are generally not able to buy agricultural or forestry land).
Competent Organization For the Declaration
Lithuanian Development agency
Requests For Specific Authorizations
Licensing is necessary for activities related to human life and health.

Learn more about Foreign Investment in Lithuania on Globaltrade.net, the Directory for International Trade Service Providers.

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Investment Opportunities

Investment Aid Agency
Business Lithuania
Tenders, Projects and Public Procurement
Tenders Info, Tenders in Lithuania
Globaltenders, Tenders & Projects from Lithuania
Ted - Tenders Electronic daily, Business opportunities in EU 27
DgMarket, Tenders Worldwide
Other Useful Resources
Ministry of Economy
 
 

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Learn more about Investing in Lithuania on Globaltrade.net, the Directory for International Trade Service Providers.

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Last Updates: January 2015