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Lithuania – Go for
Business
2009
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: 542,000)
• State language: Lithuanian
• State Government: Democratic
Republic
• Religion: 80% of Roman
Catholics, 5% Orthodox
Business opportunity 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
• EU and Government support
• LDA assistance for businesses
International business presence
• Member of the EU, NATO and
Schengen area
• Crossroads of three huge
markets
Half of the Baltic States’ economy
27%
Lithuania
Latvia
Estonia
53%
19%
Lithuanian economy at a glance
2005
2006
2007
2008
2009
(forecast)
GDP, EUR bn
20.9
23.9
28.4
32.3
-
GDP growth (annual), %
7.8
7.8
8.9
3.1
-15
Annual inflation, %
2.7
3.8
5.8
11.1
3.4
FDI, EUR bn
6.9
8.4
10.3
9.1
9.9
Exports, EUR bn
9.5
11.3
12.5
16.1
–
Exports growth, %
27.1
18.7
11.1
28.4
-26.6
Imports, EUR bn
12.4
15.4
17.8
21
–
Imports growth, %
25.5
23.5
15.4
18
-38.2
Unemployment, %
8.3
5.6
4.3
5.8
13.7
* exports/imports including services
GDP by economic sectors, 2009
Services
61,9%
Industry
18,1%
Construction
5,8%
Agriculture
4,1%
0%
10%
20%
30%
40%
50%
60%
70%
FDI in Lithuania, EUR bn
10
9
8
7
6
5
4
3
2
1
0
10
8.4
9.1
9.9
6.9
2.7 3.1
3.8
4
4.7
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
IIIQ
Major countries investors, 2009 IIIQ
25.5%
Other
12.2%
10.6%
10.5%
Sweden
Germany
Denmark
6.7%
6.3%
5.8%
Estonia
Netherlands
Latvia
10.0%
Poland
5.6%
6.8%
Finland
Russia
0%
5%
10%
15%
20%
25%
30%
FDI in Lithuania by economic sector, 2009 IIIQ
Electricity, Gas & Water
Wholesale & Retail Trade
Transport & Warehousing
Financial Intermediation
Real Estate
Manufacturing
0.0%
8.0%
13.7%
14.6%
16.4%
16.5%
23.1%
5.0% 10.0% 15.0% 20.0% 25.0%
Multinationals feeling at home
Lithuania’s foreign trade, EUR bn
25000
21,1
20000
16,1
15000
13,1
11,7
Exports
Imports
10000
5000
0
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Lithuanian export dynamics
Y2004, EUR M
9,4
Y2009, EUR M
1561,7
693,6
21,9
353,2
EU
347,8
EU
CIS
CIS
USA
USA
1221,2
CHINA
CHINA
RUSSIA
RUSSIA
2774,8
5001,7
7581,6
Lithuania’s major exports destinations, 2009
5.1%
Netherlands
Estonia
7.2%
Poland
7.2%
9.7%
Germany
10.0%
Latvia
13.2%
Russia
23.5%
CIS
64.3%
EU
0%
10%
20%
30%
40%
50%
60%
70%
Major importers to Lithuania, 2009
3.0%
Belgium
Italy
3.8%
Netherlands
4.1%
6.4%
Latvia
10.0%
Poland
11.2%
Germany
30.1%
Russia
33.2%
CIS
58.8%
EU
0%
10%
20%
30%
40%
50%
60%
Lithuania’s exports by products, 2009, %
8.9%
Other
4.4%
Base metals and articles of base metal
5.6%
Live animals; animal products
Furniture, prefabricated buildings
6.4%
Textiles and textile articles
6.5%
Vegetable products
6.5%
6.7%
Plastics, rubber and articles thereof
7.1%
Prepared foodstuffs; beverages, tobacco
7.3%
Transport means
9.1%
Chemical products
10.0%
Machinery; electrical equipment
21.5%
Mineral products
0%
5%
10%
15%
20%
25%
Lithuania’s imports by products, 2009, %
10.6%
Other
3.6%
Live animals; animal products
Vegetable products
4.4%
Plastics, rubber and articles thereof
4.5%
Base metals and articles of base metal
5.0%
Textiles and textile articles
5.0%
5.9%
Prepared foodstuffs; beverages, tobacco
6.3%
Transport means
12.3%
Chemical products
13.1%
Machinery; electrical equipment
29.3%
Mineral products
0%
5%
10%
15%
20%
25%
30%
Main business taxes, 2009
Tax
%
Corporate profit tax
15
VAT
21
Dividends
Personal income tax
Social security tax for employer
0* to 15
15
(+ 6% health insurance
contribution)
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.
Wages, 2009 4Q
Wages
EUR
Minimal hourly wages
1.40
Minimal monthly wages
232
Average monthly wages
614
Competitive operation costs
Overall tax burden, % of GDP*
Denmark
Sweden
Belgium
France
EA15
EU27
Estonia
Latvia
LITHUANIA
Slovak Rep.
Romania
49.1
48.9
44.6
44.2
40.5
39.9
31.0
30.1
30
29.3
28.6
0
10
20
30
40
* total amount of taxes and compulsory actual
social security contributions as a percentage of GDP
50
60
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 21 m tonnes
of cargo every year, accepting large tonnage
vessels: dry-cargo vessels up to 70,000 DWT,
tankers up to 100,000 DWT and cruise ships up
to 315 meters length
Dense network of shipping lines
Convenient industrial network
• Klaipėda FEZ:
412 ha greenfield territory
• Kaunas FEZ:
534 ha greenfield territory
• 9 industrial parks:
greenfield territory from 15 to 219 ha
Diversified industry
• 30% of total FDI settles
down in industry
(EUR 3 bn in 2008)
• Industry+construction –
35% of country’s GDP
EU and Government support
• Non-refundable support through EU Structural Funds
until 2013 for such areas as trainings, R&D etc.
• Land or real estate tax relieves
• Incentives for R&D
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
Cohesion
39.1%
Operational Programme for the Development
of Human Resources
13.8%
Operational Programme of Technical
Assistance
1.4%
0%
5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
EU support for staff training
(Next call will be announced in 2009 3rd quarter)
Support intensity:
Large enterprises
SMEs
Basic training – training of skills, which are not directly
connected to the duties of employees, but can be easily
applied in any enterprise, and also may lead to increased
opportunities to become employed.
60%
80%
If employees undergoing the basic training come from socially
unfriendly environment, the intensity of the support is by 10%
bigger.
+10%
+10%
Special training - theoretical and practical training of skills,
which are directly connected to the duties and are special in
their nature of application.
35%
45%
If employees undergoing the special training come from socially
unfriendly environment, the intensity of the support is by 10%
bigger.
+10%
+10%
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; forthcoming Lithuanian
events of international importance
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)
•
container handling leader and the northernmost ice-free
seaport on the eastern cost of the Baltic sea – Klaipėda State
Seaport:
annual cargo turnover of 20 million; i.e. also more than all
ports of Ireland combined
•
the best road system in the region
•
3 international airports
•
3 international and regionally important public logistic centres
under construction
Major opportunities:
Transport and logistics (2)
•
10.4% of GDP
•
67% of services exported
•
2% of country’s FDI
•
approx. 3,600 companies
•
80,000 employees
•
33,000 trucks
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
Major opportunities:
Energy (2)
•
3.6% of GDP
•
2.7% of exports
•
7.5% of country’s FDI
•
over 23,000 employees
Major opportunities:
Shared services and business process
outsourcing (BPO) (1)
Well-educated multilingual labour pool
•
~40% of population with higher education – one of the best-educated
workforces in CEE
•
~90 % of Lithuanians speak at least one foreign language:
•
•
22 universities and 28 colleges:
•
•
every second speaks two foreign languages, every third speaks English
more than 30,000 university and college graduates every year
excellent telecommunications infrastructure:
•
1st in the world by the number of mobile telephone subscribers per 100
population
•
1st in Europe by mobile network penetration
•
broadest high-speed mobile broadband coverage in Europe
•
densest network of public Internet access points (875 in total) in Europe
Major opportunities:
Shared services and business process
outsourcing (BPO) (2)
•
40 – 50 contact centers with 2,400
employees
•
Forecast for 2009 – 75 contact
centres, 4,600 employees
Major opportunities:
ICT (1)
Modern knowledge economy
• development of knowledge society is a national priority funded by
the State and the EU
• the best telecommunications infrastructure in the region:
• EDGE technology
• 3G mobile communications infrastructure with data speeds of
3.6 Mbps
• WiMax 4G mobile internet network
• 3,700 wireless Internet access points, almost 5 million active SIM
cards
• with the mobile penetration of 149% Lithuania is the European
leader
• 7 universities prepare 4,500 IT specialists every year
• 11 out of 20 largest IT companies in the Baltic States are based in
Lithuania
Major opportunities:
ICT (2)
•
3.8% of GDP
•
4.4% of total exports
•
9.5% of total FDI in the country
•
more than 2,000 companies
•
37,000 employees
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
• 6 institutions (including 5 major universities) train biotech
specialists for science and business
Major opportunities:
biotech industry (2)
• Annual growth of ~22 %
• Total annual revenue over EUR 80M
• 80 % exported to 70 countries
• Over 1000 employees
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
Major opportunities:
Plastics (2)
•
1.4% of GDP
•
52% of production exported
•
1% of total FDI in the country
•
more than 300 companies
•
10,200 employees
Major opportunities:
laser technologies (1)
Globally acknowledged production and inventions
• Development of unique laser devices:
- 80 % of the world market for high-energy pico-second lasers
- Leadership in global production 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
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
• 86 % exported to nearly 100 countries
• ~450 employees
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
Major opportunities:
Metal processing, machinery and
electric equipment (2)
•
4.9% of GDP
•
64% of production exported
•
2% of country’s FDI
•
more than 1,600 companies
•
46,000 employees
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
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
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
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
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”
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
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
Major opportunities:
Real estate and construction (2)
•
21% of GDP (2007)
•
9.7% of country’s FDI
•
over 244,000 employees
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 are on the UNESCO World Heritage List
• 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
• large ships (315 m) of well-known cruise lines regularly visit
Klaipeda State Seaport
Major opportunities:
Tourism (2)
•
2.7% of GDP
•
value added growth of more than 20%
•
annual growth of approx. 10% of the
accommodation of foreign tourists in the
country
•
43,700 employees in the sector
Lithuanian market prospects
• From traditional to value-added
• From manufacturing to services and R&D
• From SME’s to global account
• From regional neighbours to Europe
Lithuania’s “gold and oil”
• One of the best-educated people in Central and Eastern Europe;
the percentage of Lithuanian population with higher education is
two times higher than the EU-15 average and is also the highest
in the Baltic States
• 22 universities and 28 colleges with a total enrolment of 205,000
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)
Most popular professions
Most popular higher education programmes, 2007-2008
Business and administration
Teacher training & education science
Law
Social sciences
Engineering
Humanities
Arts
Architecture and building
Computing
Other
0%
23%
18%
9%
8%
8%
5%
4%
4%
4%
17%
5%
10%
15%
20%
25%
High quality of life
• 22 universities and 28 colleges (in all 5 biggest cities),
more than 60,5 thous. education specialists
• More than 3,700 medical institutions, approx. 14 thous. doctors,
400 doctors for 100,000 inhabitants
• 3,700 wireless Internet zones, mobile communication penetration of
147% in 2008 IQ, almost 5 million active SIM cards
• 25,700 new cars registered in 2007, which is by 41% more than
in 2006, and the most among the Baltic States
Perfect place for vacation
• 4 UNESCO World Heritage sites
• Well-preserved nature, ecological tourism
• World-class entertainment and leisure services,
international cultural festivals