Doing Business in Lithuania - Lithuania
Lithuania is one of the three Baltic countries. The country joined the EU and NATO in 2004, and has been rapidly developing ever since. Lithuania’s fast developing sectors like renewable energy, biotech, and IT offer many opportunities for Dutch companies interested in the largest country of the Baltic region.
Between 2010 and 2020, Lithuania was one of the fastest growing economies among the OECD countries . This growth levelled out slightly during the Covid-19 crisis, but was especially impacted by the war in Ukraine since February 2022. However, Lithuania’s ambition on energy independence from Russia has opened up opportunities for outside investment into the (renewable) energy sector. EU-funded investment is projected to stay high, especially sectors regarding military and energy-related construction.
Furthermore, market entry and business climate are favourable for foreign businesses, especially for small and innovative start-ups. This is illustrated by the outspoken way the Ministry of Economy and Innovation addresses its future support to foreign businesses in order to attract more foreign direct investment to Lithuania.
Furthermore, market entry and business climate are favourable for foreign businesses, especially for small and innovative start-ups. This is illustrated by the outspoken way the Ministry of Economy and Innovation addresses its future support to foreign businesses in order to attract more foreign direct investment to Lithuania.
For Dutch companies there are a multitude of interesting sectors to be found in Lithuania. Priority sectors are among others renewable energy and offshore wind, life science and biotech, ICT, laser and FinTech. Other sectors that can also be of interest to Dutch companies are the agrifood sector, defence and security, and transport and logistics.
The country has three business hubs. The active transportation sector and sea port connects all hubs, making the choice of location for new businesses a minor obstacle.
Main business hubs – Vilnius (ICT), Kaunas (Industry), Klaipeda (Energy).
Main Free Economic Zones – Kaunas, Kėdainiai, and Klaipėda Free Economic Zones.
Priority sectors
Renewable energy / Offshore Wind Energy
Lithuania aims at reducing carbon emissions by 30% by 2030 from its 2005 level, and reaching net-zero emissions by 2050 according to their national climate management agenda adopted in 2021. Funds are being invested into the Lithuanian ‘green transformation’, with a focus on renovation and rehabilitation of multi-apartment buildings and the support of public and private solar and wind energy production and electricity storage. These funds planned for the installation of renewable energy resources has been tripled since 2020.
The most notable investment in recent years by the Lithuanian Ministry of Energy is the offshore wind sector. The goal by 2030 is to rely on renewable energy for 100% of generated electricity. As European frontrunners in this sector, there are opportunities to be found for Dutch companies, especially in the first (feasibility, design and development), and second (design and manufacturing) project phases, as well as K2K (knowledge to knowledge) activities. The recent initiative of the Baltic region ‘Partners in Business Offshore Wind Energy’ public-private partnership programme (PIB OWE), which main objective is to position the Dutch Offshore Wind Energy sector in the Baltic States through collaboration with local stakeholders, is a great starting point for any Dutch company looking for opportunities in the sector.
Other Lithuanian renewable energy goals are set in ‘future fuels’ like hydrogen and biomethane. After building the (offshore) wind parks, there are plans to develop cheap green hydrogen and use it in the production of hydrogen derivatives (synthetic fuels and feedstock). Furthermore, 14.35 million EUR has been allocated to biomethane production projects. The plan is to build 5 biomethane production facilities that can produce about 200 GWh of biomethane per year. The selected projects will have to be implemented by the end 2025. According to the National Energy and Climate Action Plan, the target by 2030 is to produce at least 950 GWh of biomethane in Lithuania.
Life Science & Biotech
The biotech industry has emerged as a powerhouse, contributing 3% to LIT's GDP, with plans to reach a 5% share. In recent OECD Biotechnology RnD Intensity Rankings, Lithuania was in 3rd place. Furthermore, Europe's largest biotech facility in Vilnius, housing cutting-edge GMP manufacturing plants and research centres, offers a prospect of success. Lithuania's biotech industry undeniably is a rapidly growing sector with strong economic contributions and ambitious growth plans.
The Sunrise Valley Science and Technology Park unites Vilnius University and Vilnius Gediminas Technical University, and houses 20,000 students, 5,000 researchers, and numerous businesses. The park offers opportunities for those studying and working in research, and young (small and medium) businesses in the life science and biotech field. This young work force could create interesting cooperation opportunities for Dutch companies.
ICT
Lithuania is the second cyber-safest country in the world, the country is surpassed only by Belgium in this area. Given the fact that Lithuania does not have many natural resources, the ICT sector is seen as the main driving force that enables the country to maintain productivity growth and competitiveness. The country offers both EU-leading connectivity and internet speeds, and a strong pipeline of dedicated ICT specialists to the cyber security sector. In addition, the ICT sector is the most active in terms of attracting private investments from venture capital funds.
Lithuania is ranked in the TOP10 of the Global Fintech Index and has been growing exponentially since 2016. The Ministry of Finance and the Central Bank of Lithuania have worked together in order to support new FinTech businesses since the start of the boom in 2016. Lithuania is a popular among Fintech companies looking to expand into the European Union with its 500M+ customer market. The arrival of international Fintech companies has also diversified and internationalized the talent pool of the country. The sector still lacks over 7.6 thousand employees. Research points out that Back-End programmers will be in high demand and ~1400 new programmers will be hired by 2025. Companies are also in search for ~1000 new Front-End developers.
Until 2030 about 260 million EUR of investments is planned, which will be available exclusively to the ICT sector, even more funding is planned for the general promotion of innovations. For example, in 2025 a new tech park, valued at 100 million EUR, will be opened in Vilnius - the biggest tech park in Europe. Another tech park, valued at 3.7 billion EUR is planned to open in 2033.
Other sectors with considerable potential
The agri-food sector generates 7.1% of Lithuanian GDP. The sector’s importance is growing in Lithuania and the EU, especially with the necessity to digitalize and innovate in the entire food value chain. Lithuania, due to its big ICT talent pool could have the possibility in Europe to be a leader in the sector. An exemplary NGO working in the field is AgriFood Lithuania. They link stakeholders with international and cross-sector initiatives throughout the EU.
The Lithuanian transport & logistics sector enjoys a well-developed logistics infrastructure and a great geographical location. Most companies focus on road transport – Europe’s largest asset-based road freight company Girteka has its headquarters in Vilnius. Investment in railway infrastructure project Rail Baltica by the government is expected to incentivize the railway sector by 2030. Additionally, inland waterway transport is being revived by the Lithuania Inland Waterways Authority with an electric cargo fleet to cut carbon emissions for the transport of heavy and oversized cargo. This planned project is being supported by the EU investment bank.
Lithuania's defence and security sector companies are growing at twice the national average, at around 14% between 2018 and 2023. The Ministry of the Economy and Innovation has initiated amendments to the laws relevant to Lithuania's defence and security industry, which will remove excessive requirements for the development of this sector and create a more favourable environment for Lithuania to produce its own products for European defence. The arrival of Rheinmetall, a German military industry giant, to Lithuania under the Green Corridor Initiative illustrates the rapid commencement of defence and security industry activities in Lithuania.
Doing Business in Lithuania
Agencies
- Invest Lithuania – https://investlithuania.com/ (green field projects)
- Innovation Agency Lithuania – https://innovationagency.lt/
- B2 Lithuania – https://b2lithuania.com/
Challenges
- Companies have had difficulties connecting NL and LT banks with each other. With the help of the embassy and its contacts, these problems can be solved.
Green Corridor for large-scale projects
The ‘Green Corridor’ regulations provide fast and simple establishment for large-scale investors, as well as incentives for investor-hosting municipalities.
Large-scale investment projects that meet the requirements of investing at least €20 million CAPEX (€30 million when investing in Vilnius) and creating at least 150 new full-time jobs (200 when investing in Vilnius) in manufacturing, data processing, and/or internet server hosting services will enjoy 0% corporate income tax for up to 20 years.
To qualify for the regulations, the project developer has to sign a contract with the LT government, which grants the project the status of national significance, ensuring fast decision-making, simplified procedures and all-round reduction of bureaucracy.
Under the new package of laws, the investors will be invited to invest in more remote municipalities of Lithuania with lower thresholds than in Vilnius. The municipalities will be incentivised to prepare territories in advance with government grants up to 5% of the investment projects CAPEX value.
The Netherlands is already represented in the Green Corridor Initiative by Pon.Bike, the world’s leading bicycle company. They will open a new manufacturing facility in Kėdainiai in 2024. The new production center could scale up to an annual production capacity of 600,000 bikes and hire around 300 people over the first three years of operations.
Embassy & RVO
General Information
The Netherlands embassy is the official representation of the Kingdom in the Netherlands abroad. As embassy, we are pleased to assist Dutch companies in their businesses in Lithuania. The Netherlands embassy is there to provide information, answer questions, look for opportunities, and local diplomatic support.
Our Dutch Honorary Consul in Lithuania, Jurgita Šilinskaitė-Venslovienė, operates in the Klaipėda region and supports the Embassy’s goals in strengthening Dutch-Lithuanian cooperation in climate and energy sectors.
Netherlands Enterprise Agency (RVO.nl) encourages entrepreneurs in sustainable, agrarian, innovative and international business. It helps with grants, finding business partners, know-how and compliance with laws and regulations.
Market Exploration
Regional experts at RVO will help you define your questions. They may even answer them straight away and advise you on how they can be of further assistance. Would a country comparison be useful to you? Will you benefit from a business partner scan? You will find the answers to these and the many other questions you may have within a couple of weeks.
For more information see: Market Exploration (rvo.nl)
Relevant Contacts in NL
- Netherlands and You –https://www.netherlandsandyou.nl/web/lithuania/home
- The Embassy of the Netherlands in Lithuania - https://www.netherlandsworldwide.nl/contact/embassies-consulates-general/lithuania/embassy-vilnius
- Honorary consul in Klaipeda – https://www.netherlandsandyou.nl/web/lithuania/about-us/honorary-consul
- Netherlands Enterprise Agency (RVO) – https://www.rvo.nl/onderwerpen/landen-en-gebieden/litouwen
- Lithuanian Embassy in The Hague – https://nl.mfa.lt/nl/en/
Factsheet Lithuania
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Official Name
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Republic of Lithuania
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Government type
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Semi-presidential republic
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Population
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2.88 million (est. 2023)
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Area
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65,300 km2
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Time difference
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GMT +2
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Currency
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Euro
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GDP growth rate
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2.4% (2022)
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GDP per capita
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$25,064.8 (2022)
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Trade Volume
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Exp. 39.5 bln. EUR
Imp. 44.8 bln. EUR
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Inflation
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6.5% (2021)
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Income level
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High income
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Ease of doing business
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11 (out of 190)
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| Global Corruption Index | 21 (out of 196) |
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Main trading partners
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Exp. LVA, POL, DEU, NLD
Imp. DEU, POL, LVA, USA
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| Major exports | Refined Petroleum |
| Major imports | Crude petroleum |
| Netherlands FDI in Lithuania | (2023 Q1-Q3) 494.5 mil. EUR |
| Netherlands - Lituania trade balance | (2023 Q1-Q3) 494.5 mil. EUR |