LITHUANIA: The largest country in the 15th century.

The Greatest Business Oportunity in the 21st Century?

Lithuania

… extended from the Baltic Sea to the Black Sea and was the largest country in Europe  in the
15th century. By the end of the 14th century, the Grand Duchy of Lithuania occupied the territories
of present-day Belarus, Ukraine, and parts of Poland and Russia. This was not because of conquest,
but because of diplomacy.
… today is a Northeastern European country which combines what is regarded as a blend of Scandinavian - clean, orderly, progressive, natural and attractive, as well as what is regarded as Eastern European – new, rapidly developing, on the rise, and as yet undiscovered. Sometimes called a Northern, and sometimes an Eastern European country, Lithuania is an authentic combination of Northern and Eastern features.

Crossroads of 3 markets

Lithuania is located on the very crossroads of three huge markets. It is a springboard to the EU markets, and Eastern markets (Russia and the CIS countries) which are close to Lithuania.

Strategically Located Between Huge Markets

Geographical Proximity to all European Countries

Lithuania has much to offer the foreign investor seeking to set up in the Baltic Region as a springboard to the East as well as to the wider European market.

David Earp, UK Trade & Investment, Cambridgeshire

We found that the travel, infrastructure, communications and people with whom we came into
contact were excellent and easy to deal with.

Paul Stienlet, General Electric

One of the advantages of this country is being located on the border between East and West and having transit routes. In our business we are focusing more on the transit routes, and Lithuania’s excellent geographical location has made Lithuania a trinsit country.

Henrik Muller, Hydro Texaco

EU Prime Transport Centre

Trans-European Network Corridors

The EU’s Transportation Commission designated the two routes running through Lithuania, the North-South highway and the rail route connecting Scandinavia with Central Europe as well as the East-West route linking the huge Eastern markets with the rest of Europe, as being among the ten most important in Europe.

Two Trans European Network (TEN) corridors crossing Lithuania:

• North-South direction: I corridor ( the VIA BALTICA highway and the RAIL BALTICA railway), connecting Tallinn - Riga - Salociai - Panevezys - Kaunas - Kalvarija - Warsaw, and I A corridor (Tallinn – Riga - Siauliai - Taurage - Kaliningrad)

• East - West corridor: IX corridor, IX B corridor branch (Kiev - Minsk - Vilnius -Klaipeda) and IX D corridor (Kaunas - Kaliningrad)

International Airports

The country has three international airports located in the East (in the capital city Vilnius), Central (in the 2nd largest city Kaunas) and Western (in the seaside resort Palanga) Lithuania. All of them offer rapidly increasing numberof  flights to a number of destinations worldwide operated by major European airlines.

Highest-capacity Ice-free Seaport

The northernmost and only ice-free seaport on the eastern shore of the Baltic Sea is located in the western part of Lithuania. The Klaipeda State Seaport is a regional transport hub connecting sea, land and railway routes from the East to the West.
Compared to neighbouring Eastern Baltic seaports, the port of Klaipeda has the widest shipping line network with other seaports.

Network of Shipping Lines

Railway Network

Railway transport in Lithuania provides efficient long distance passenger and cargo services. Railways carry approximately 50 million tons of cargo and 7 million passengers per annum. Direct rail routes link Lithuania with Russia, Belarus, Latvia, Poland, and Germany. Also, the main transit route between Russia and Russia’s Kaliningrad Region passes through Lithuania.

Knowledge Economy and Innovation Potential

Lithuania is a perfect place to generate and implement new ideas- a peaceful and tension-free environment conducive to business, with engineering potential and vast possibilities for business and science collaboration, plus a good choice of skilled labour and managerial staff.

Wally Olins, Saffron Brand Consultants

Innovations and Achievements of World Significance

The Lithuanian invention, the anti-cancer medication TevaGrastim® is 25-35 % less expensive than a similar treatment already on the market, and is just as effective. The European Medicines Agency granted the marketing authorization for the Lithuanian invention to be marketed in Europe from 2009.

So far, our scientists are the only ones in Central and Eastern Europe to have pulled off such a high-level project.

Algirdas Bumelis,
Head of Sicor Biotech, inventor of TevaGrastim®

Lithuania deserves to be named the home for the next NOKIA because significant European and world-wide ICT records belong to the country:

• World’s fastest upload Internet

• Leadership (No. 4 in the world) with its broadband quality score

• G lobal leadership in the number of mobile telephone subscribers per 100 residents - 3.4 million Lithuanians with almost 5 million active SIM cards

• The EU’s second greatest mobile penetration of 149 %

• 3G mobile communications infrastructure with data speeds of 3.6 Mb/s

• Mobile WiMAX 4G Internet, EDG E technology

• One of the lowest mobile connection rates in the EU

Environment for Fusion of Science, Industry and Business

Lithuanian business enterprises create new products in conjunction with Lithuanian and foreign scientific institutions. Lithuania’s nine science and technology parks (STP) offer favourable infrastructure for the establishment of new innovative businesses in Lithuania and serve as a convenient space for business enterprises, scientists and students to combine their knowledge, experience and ideas into innovations.
All nine STPs are located in the country’s most developed economic centres with a great concentration of qualified human resources available. They are also established next to higher education instututions and scientific research centers, and form the axes of the rapidly developing integrated science, studies and business centres known as valleys.
Five integrated science, and business centres (valleys) will be developed and launched in Lithuania in the next three to four years by investing almost € 300 billion of the EU Structural Funds support appropriated to Lithuania for the years 2007-2013.
The five valleys, which will specialize in different scientific research fields (laser and light technologies, nanotechnologies, semiconductor physics, electronics and organic electronics, civil engineering, biotechnology, bio pharmacy, molecular medicine, ecosystems and safe environment, sustainable chemistry and bio pharmacy, mechatronics and biomedical engineering, energy, information and communication technologies, agriculture, forestry, food science, marine business, nature resources, and environmental protection), will be developed in the capital city Vilnius, in Kaunas, the second largest city and industrial centre, and the seaport Klaipeda.

Talent Pool

When we established our service production facility in Vilnius, the most positive experience we had was the high quality of the staff which made it possible for us to reach the critical production level much faster than expected. They came highly educated and motivated and quickly adopted the company values. Which again made it possible for us to quickly build company loyalty and company pride.

Per Andreas Vogt, General Manager Lindorff Support Services UAB, Vilnius

I am the only foreigner in the facility, all management is staffed by Lithuanians, and they really do a good job.

Herald Emberger, former CEO of Mars Lithuania

Among the Most Multilingual and Most Educated in the EU

Lithuania has one of the best-educated workforces in Central and Eastern Europe. The percentage of the Lithuanian population with higher education is two times higher than the EU-15 average.
The public opinion analysis “Europeans and Languages” conducted by the European Commission
shows that every third Lithuanian speaks English, and eight Lithuanians out of ten speak Russian. Polish is much more widespread in Lithuania than in all the other EU countries. Half of the population speaks two foreign languages.

Employment in 2009 3Q

Languages studied by Lithuanians in 2009

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

There are 22 universities and 28 colleges in Lithuania with a total enrollment of 205,000 students.

Vilnius University, founded in 1579, is the oldest institution of  higher education in Eastern and Central Europe. Kaunas University of Technology is the largest technical university in Northeastern Europe.

EU Structural Funds and State Support

Non-refundable Support through EU Structural Funds until 2013

In comparison with the EU financial support for the years 2004 -2006, when Lithuania received € 895 million, the EU support for Lithuania for the period of 2007 - 2013 is more than eight times larger - approximately € 7 billion.

EU Support for Business Development

Micro, small and medium enterprises as well as larger companies established in Lithuania, may apply for the non-refundable EU support for the following innovation-oriented activities:

• Technical feasibility studies

• Business development and optimisation strategies

• Scientific research projects

• Technology development and modernization

• D evelopment of infrastructure and assets

• Project to increase energy consumption efficiency

Enterprises may apply for between € 43,000 and € 5.8 million for support in developing their business projects. The aid ranges from 40 % to 70 % of the eligible costs.

For more information please visit Lithuanian Business Support Agency’s website www.lvpa.lt and Lithuanian Development Agency’s website www.lda.lt

EU Support for Staff Training

Micro, small, and medium enterprises established in Lithuania may apply for the non-refundable EU support for general training (involving tuition which is not applicable only or principally to the undertaking of the employee’s present or future position) and specific training (involving tuition directly and principally applicable to the undertaking of the employee’s present or future position). The aid can reach nearly 60 % of the eligible costs for general training, and up to 25 % of the eligible costs for specific training. The support may be increased, up to a maximum aid intensity of 80 % of the eligible costs by 10 % if the training is given to disabled or disadvantaged workers or if the aid is awarded to medium sized enterprises, and by 20 % if the aid is awarded to small enterprises.

For more information please visit the Support Foundation European Social Fund Agency’s website www.esf.lt

State Support for Businesses

Support for R&D projects

The following incentives are applied to companies investing into R&D:

• Triple deduction - expenses incurred by companies while carrying out R&D as well as by acquiring R&D carried out in EEA countries or countries with DTA can be deducted from taxable income three times.

• Super-accelerated depreciation – the acquisition price of fixed assets used in the R&D activities can be written off within two years.

• Eligibility - all investments into R&D qualify, irrespective of the type of company or the investment sum .

Profit Tax Reduction for Investments into New Technologies

From the beginning of the 2009 tax year, enterprises investing in long-term assets aimed at providing new or additional products or services, increasing the capacity for new products or services, introducing new products or services, or changing all or part of the existing process, or introducing technology protected by international patents, can find their profit tax calculated for the same period reduced by up to 50 %.
Expenses exceeding these sums can be postponed until one of the four later, consecutive tax periods. The profit tax incentives will only apply to expenses incurred during the period from 2009-2013. However, the profit tax calculations for each tax period cannot be reduced by more than 50 %.

Tax “Holidays” in the 2 Free Economic Zones

Tax relief is available for business enterprises in Lithuania’s two free economic zones.

* 0% tax on dividends applies when an investor controls at least 10% of the voting shares in the enterprise for the period of at least 12 months

For more information on tax incentives in Lithuanian free economic zones please visit www.fez.lt and www.ftz.lt

Subsidies for Employment Projects

State financial support for employment projects is available through the Lithuanian Labour Exchange active labour market policy and employment increasing measures:

• Training and retraining of the unemployed according to the needs of the labour market

• Subsidizing the employment of the unemployed

• Subsidizing the creation of new job positions  in order to recruit the disabled for permanent jobs

• Support for the employer who recruits the disabled and other socially vulnerable people

For more information please visit the Lithuanian Labour Exchange at the Ministry of Social Security and Labour website www.ldb.lt

Land or real estate tax relief by local municipalities

Tax relief is available for land (1.5 %) or real estate (1 %) through local municipalities where the company is operating.

Attractive Economy 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 – three huge plants leading in the region

• M etal 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, a well-developed rural tourism network, and upcoming internationally significant Lithuanian events.

Lithuania represents the best of modern Eastern Europe: lively, determined, inventive and energetic and it’s also what you’d expect a Northern European nation to be: peaceful, healthy, modest and trustworthy – or, put another way, small but sound.

Wally Olins, Saffron Brand Consultants