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Business images of Lithuania

Economy of Lithuania

The economy of Lithuania is the largest economy among the three Baltic states. Lithuania is a member of the European Union and belongs to the group of very high human development countries and is a member of the WTO and OECD.<br>Lithuania is ranked 11th in the world in the Ease of Doing Business Index prepared by the World Bank Group, 16th out of 178 countries in the Index of Economic Freedom, measured by The Heritage Foundation and 8th out of 165 countries in the Economic Freedom of the World 2021 by Fraser Institute. On average, more than 95% of all foreign direct investment in Lithuania comes from European Union countries. Sweden is historically the largest investor with 20% - 30% of all FDI in Lithuania. FDI into Lithuania spiked in 2017, reaching its highest ever recorded number of greenfield investment projects. In 2017, Lithuania was the third country, after the Republic of Ireland and Singapore by the average job value of investment projects.<br>Based on OECD data, Lithuania is among the top 5 countries in the world by postsecondary (tertiary) education attainment. This educated workforce attracted investments, especially in the ICT sector during the past years. The Lithuanian government and the Bank of Lithuania simplified procedures for obtaining licences for the activities of e-money and payment institutions, positioning the country as one of the most attractive for the financial technology initiatives in the EU.

Top Sectors in Lithuania

Information and communication technologies in Lithuania

Lithuania hosts 13 of the 20 largest IT companies in the Baltic States. Lithuania exported EUR 128 million worth ICT services in II quarter of 2018. Around 37,000 employees work for more than 2,000 ICT companies. ICT received 9.5% of total FDI. Development of shared services and business process outsourcing are some of the most promising fields.

Financial services in Lithuania

The financial sector concentrates mostly on the domestic market. There are thirteen commercial banks that hold a license from the Bank of Lithuania and eight foreign bank branches. Most of the banks belong to international corporations, mainly Scandinavian. The financial sector has demonstrated incredible growth in the pre-crisis period. Bank assets were only €3.2 billion or 25.5% from GDP in 2000, half of which consisted of loan portfolio.

FinTech in Lithuania

The country has increasingly sought to position itself as the EU's main fintech hub, hoping to attract international firms by promising to provide European operational licences within three months, compared to a waiting period of up to a year in countries like Germany or the UK. In 2017 only, 35 FinTech companies came to Lithuania - a result of Lithuanian government and Bank of Lithuania simplified procedures for obtaining licences for the activities of e-money and payment institutions. Europe's first international Blockchain Centre launched in Vilnius in 2018. The government of Lithuania also aims to attract financial institutions looking for a new location after Brexit. Lithuania has granted a total of 39 e-money licenses, second in the EU only to the U.K. with 128 licenses. In 2018, Google set up a payment company in Lithuania, Vilnius was ranked a seventh FinTech city by foreign direct investment performance in 2019.<br>Bank of Lithuania, the Central Bank of Lithuania established a Regulatory sandbox to test financial innovations in a live environment under the guidance and supervision of the Bank of Lithuania. Bank of Lithuania has also developed LBChain which is the world's first blockchain-based sandbox developed by a financial market regulator, combining technological and regulatory infrastructures.

Furniture in Lithuania

Furniture production employs more than 50,000 people and has seen double-digit growth over the last three years. The biggest companies in this field work in cooperation with IKEA, which owns one of the biggest wood processing companies in Lithuania. Lithuania is the fourth biggest supplier of furniture for IKEA after Poland, Italy and Germany.

Automotive industry in Lithuania

Continental AG in 2018 started to build a factory for high precision car electronics - the biggest greenfield investment project in Lithuania so far. Another German manufacturer of lighting technology Hella opened a plant in 2018 in Kaunas FEZ, which will produce sensors, actuators and control modules for the automotive industry. Lithuania's automotive cluster experienced significant growth during the past 5 years.<br>Companies in the automotive and engineering sector are relatively small but offer flexible services for small and non-standard orders at competitive prices. The sector employs about 3% of the working population and receives 5.6% of FDI. Vilnius Gediminas Technical University prepares experts for the sector.

Tourism in Lithuania

Tourism in Lithuania becoming increasingly important for local economy, constituting around 5.3% of GDP in 2016 Lithuania has 22,000 rivers and rivulets, 3,000 lakes, a well-developed rural tourism network, a unique coastal area of almost 100 km and four UNESCO World Heritage Sites. Lithuania receives more than 1.4 million foreign tourists a year. Germany, Poland, Russia, Latvia, and Belarus supply the most tourists, and a significant number arrive from the UK, Finland, and Italy as well.

Agriculture in Lithuania

Despite a decreased share in GDP, the agricultural sector is still important for Lithuania as it employs almost 8% of the work force and supplies materials for the food processing sector. 44.8% of the land is arable. Total crop area was 1.8 million hectares in 2008. Cereals, wheat, and triticale are the most popular production of farms. The number of livestock and poultry has decreased twofold compared to the 1990s. Lithuanian food consumption has evolved; between 1992 and 2008, consumption of vegetables increased by 30% to 86 kg per capita, and consumption of meat and its products increased by 23% during the same period to 81 kg per capita. On the other hand, consumption of milk and dairy products has decreased to 268 kg per capita by 21%, and the consumption of bread and grain products decreased to 114 kg per capita by 19% as well.


Lithuania - Key Economic Indicators

Exports and Imports

Lithuania's economy relies heavily on exports, particularly manufactured goods like chemicals, plastics, and furniture. In 2022, exports reached $70.8 billion, while imports were slightly higher. This resulted in a small negative trade balance. Germany, Poland, and Latvia are Lithuania's main trading partners.

Infrastructure

Lithuania boasts a well-developed road network exceeding 179,000 kilometers. The government is also investing in upgrading railways and expanding its port facilities to improve regional connectivity and trade.

Balance of Trade

Lithuania has a history of a small negative trade balance, meaning imports often exceed exports. This is partially offset by income from service exports like IT and logistics.

Fiscal Policy

Lithuanian fiscal policy prioritizes balanced budgets with moderate spending on social programs and infrastructure. The government aims to maintain a low national debt and relies on a moderate tax system.

Monetary Policy

Lithuania adopted the Euro in 2015, giving up control over its own monetary policy. The European Central Bank (ECB) sets interest rates for the Eurozone, impacting borrowing costs and inflation in Lithuania.

Trade Agreements

Lithuania benefits from being part of the European Union's free trade agreements with numerous countries. This access to a wider market facilitates exports and strengthens the Lithuanian economy.

Environmental Regulations

Lithuania aligns with EU environmental regulations. These regulations aim to reduce air and water pollution, promote renewable energy, and encourage sustainable practices across industries.

Tax System in Lithuania

Capital Gains Tax: Rates depend on the source of income. Dividends are taxed at a flat 15%, while other capital gains may be subject to the progressive income tax rates (20% or 32%).
Corporate Tax Rate: Lithuania boasts a flat corporate tax rate of 15%, making it attractive for businesses. However, a reduced rate of 5% applies to smaller companies with specific criteria.
Sales Tax: Lithuania applies a standard Value Added Tax (VAT) of 21% on most goods and services. Some essential items like food and medicine have a reduced rate.
Property Tax: Property tax rates in Lithuania vary depending on the type and location of the property. Residential properties typically have rates between 0.1% and 1%, while commercial properties may face higher rates.
Payroll Tax: Lithuania has a social security contribution system funded by a combination of employer and employee payroll taxes. The total contribution rate can range from 30% to 37.9%, depending on the specific social security programs covered.
Tax Deductions and Credits: Lithuania offers various tax deductions and credits to incentivize specific activities. These can include deductions for business expenses, investment in certain sectors, or childcare costs.
Tax Compliance: Lithuania has made strides in improving tax collection efficiency. However, some challenges remain regarding the complexity of the system and the shadow economy.
Tax Burden: The overall tax burden in Lithuania is considered moderate compared to other European countries. However, the burden can vary depending on income level, business size, and property ownership.

9018 Live Notices for Lithuania ....

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Technical Maintenance And Repair Services Of Computerized Workplaces, Active And Passive Equipment Of The Computer Network
country Lithuania
posting date14 Oct 2024
deadline19 Nov 2024
Medical Equipment Of The Intensive Care Unit
country Lithuania
posting date14 Oct 2024
deadline19 Nov 2024
Antivirus Licenses
country Lithuania
posting date14 Oct 2024
deadline18 Nov 2024
Interventional Radiology Measures 2
country Lithuania
posting date14 Oct 2024
deadline13 Nov 2024
Stock (Personal Protective Equipment) Storage, Storage And Related Services
country Lithuania
posting date14 Oct 2024
deadline08 Nov 2024
Dry Hydromassage Beds In Installments
country Lithuania
posting date14 Oct 2024
deadline13 Nov 2024
Updating Licenses Of The State Budget, Accounting And Payment System (For Work With The General Subsystem Of Public Sector Financial Accounting)
country Lithuania
posting date14 Oct 2024
deadline14 Nov 2024
Purchase Of Uninterruptible Power Supplies With Installation Work
country Lithuania
posting date14 Oct 2024
deadline26 Nov 2024
Ultrasound Machine (No. 9497)
country Lithuania
posting date14 Oct 2024
deadline15 Nov 2024
Mobile Phones
country Lithuania
posting date14 Oct 2024
deadline29 Oct 2024
Purchase Of Event Engineering Equipment (Artistic Stage Lighting) Of Hangover Universal Multipurpose Center
country Lithuania
posting date14 Oct 2024
deadline15 Nov 2024
Polygon Technology
country Lithuania
posting date14 Oct 2024
deadline07 Nov 2024
Services For Modernization Of Administrative Offenses Register Software And Integration With The Tax Accounting Information System (Ppr-738)
country Lithuania
posting date14 Oct 2024
deadline15 Nov 2024
Disinfectants, Hand Antiseptics And Sterilization Products
country Lithuania
posting date14 Oct 2024
deadline18 Nov 2024
Purchase Of Used Tire Removal And Repair Services
country Lithuania
posting date14 Oct 2024
deadline19 Nov 2024
Installation Of A Sorting Line With Pressing Equipment At The Transshipment Station
country Lithuania
posting date14 Oct 2024
deadline15 Nov 2024
Services Of Removal And Final Disposal Of Large-Sized Waste
country Lithuania
posting date14 Oct 2024
deadline12 Nov 2024
Construction Of 10.127 Km Of Tunnel Passage Under The A2 Vilnius–Panevėžys Highway And A2 Road From Nesvyžius St. 9.276 Km Before Going To The Tunnel Viaduct 9.912 Km Reconstruction
country Lithuania
posting date14 Oct 2024
deadline18 Oct 2024
Service Station Infrastructure, Virtualization Platform Provisioning And Backup And Infrastructure Maintenance Services
country Lithuania
posting date14 Oct 2024
deadline18 Nov 2024
Buying A Self-Propelled Compost Tipper
country Lithuania
posting date14 Oct 2024
deadline12 Nov 2024

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