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LITHUANIA: Sound in resources for businesses 2011

LITHUANIA: Sound in resources for businesses 2011. Lithuania in the world. Territory: 65,300 km 2 Common borders with: Latvia Belarus Poland Russia (Kaliningrad Region) Population: 3 million 84% of Lithuanians 7% Poles 6.5% Russians

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LITHUANIA: Sound in resources for businesses 2011

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  1. LITHUANIA:Sound in resources for businesses 2011

  2. Lithuania in the world • Territory: 65,300 km2 • Common borders with: Latvia Belarus Poland Russia (Kaliningrad Region) • Population: 3 million 84% of Lithuanians 7% Poles 6.5% Russians • Capital and biggest city: Vilnius - population: 549,000 • State language: Lithuanian • State Government: Democratic Republic • Religion: 80% of RomanCatholics,5%Orthodox

  3. Business opportunitieson the Lithuanian market • International business presence in the EU, • Scandinavian and Easternmarkets • Excellent infrastructure and communicationsnetwork • Highoperationalquality at a competitivecost • Financial supportandfiscalincentivesforbusinesses • Non-financial support

  4. International businesspresence BSR - 110 million • Member of the EU, NATO and Schengen area • Crossroads of three huge markets EU - 340 million CIS - 250 million

  5. Half of the Baltic States’ economy Source: Lithuanian Department of Statistics, www.stat.gov.lt

  6. Lithuanian economyat a glance Sources: Lithuanian Department of Statistics, www.stat.gov.lt,Ministry of Finance, www.finmin.lt

  7. Major countries investors,2011, II Q Source: Lithuanian Department of Statistics, www.stat.gov.lt

  8. Multinationals feeling at home

  9. Lithuania’s“gold and oil” • One of the best-educated people in Central and Eastern Europe; • 23 universities and 23 colleges with a total enrolment of 201,000 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) Sources: www.eurostat.com

  10. Wages, 2011 Source: Lithuanian Statistics Department, www.stat.gov.lt

  11. Main business taxes * 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.

  12. Business set-upcosts • Opening a company: • up to EUR 600 (documentation preparation, • notary public services, registration) • and up to 15 days • Minimum authorized capital for: • private companies – EUR 2.900 • public companies – EUR 43.450

  13. Excellent infrastructureand communications network • The European Union has recognized Lithuania as the prime transport centre in theregion 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) withdirect routes to most European cities • Northernmost and only ice-free seaport on the eastern shore of the Baltic Sea – Klaipėda State Seaport

  14. Klaipėda StateSeaport – majortransporthub • 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 30 m tonnes of cargo every year, accepting large tonnage vessels: dry-cargo vessels up to 80,000 DWT, tankers up to 150,000 DWT and cruise ships up to 270 meters length

  15. Dense networkof shipping lines

  16. Financialsupport& fiscal incentives • Financial packages offered by the Government to cover wage and • personnel training costs, purchase of equipment etc. • Tax incentives for investments into new technologiesandR&D • Land and real estate tax relieves • 0% taxation on dividends when an investor controls at least 10% of voting shares in the enterprise for the period of at least 12 months • Tax “holidays” in 2 free economic zones

  17. Ready-for-investmentlocations • 2 free economic zones (FEZ): • 0% corporate tax during the first6years and only 50% ofcorporate tax over the next 10 years • 0% tax on dividends • 0% real estate tax • 4 industrial parks (IP): • Greenfield territory from 15 to 219 ha (corresponding to the investor requirements) • All necessary physicalinfrastructure • Tax incentives

  18. Valleys for fusion of science and business • 5 valleys: • Network of R&D centres in 3 largestcities • Specialization in different scientific reasearch areas • Greatconcentrationoftalent • Sufficient supply of new office space • Government’s support(EUR 400 M grants in 2010-2012)

  19. Incentives for new technologies and R&D • Scientific research and experimental development (R&D)costsdeducted 3 times from income for the tax period during whichtheywere incurred, if the performed R&D works are related to theusual orintended activities of the entity that generate or willgenerate income oreconomic benefit • Super-accelerated depreciation - acquisition price of fixed assetsused in the R&D activities can be written-off within two years • Investments into substantial technological improvements willentitlethe companies to reduce the taxable profit down by 50%

  20. INVEST LT+ program grants to cover expenses of your project in Lithuania Financial support available per FDI project in the field of services, R&D or manufacturing Construction, Infrastructure, Salary costs Personnel training costs up to EUR1,5 million up to EUR2 million MAX POSSIBLE SUPPORT up to EUR 3,5 million

  21. INVEST LT+ average support per project

  22. Non-financial support • Agreements with the Government and Ministry of economy, when FDI exceeds EUR 6 M or EUR 1.5 M, respectively • Government’s assistance for VIP FDI projects • Tailor-made information packages, guidance through all the investment process (contact building, arranging visits and meetings, dealing with authorities, investment site selection etc.) as well as investment aftercare by Invest Lithuania

  23. Attractiveeconomysectors (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-educatedmultilingual 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

  24. 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

  25. 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 theirbranches (IA and IXD) (80 % of European freight is transported via international transport corridors crossing Lithuania) • the northernmost ice-free seaport on the eastern cost of the Baltic sea – Klaipėda State Seaport: annual cargo turnover of 30 million • the best road system in the region • 4 international airports • 3 international and regionally importantpublic logistic centres under construction Sources: www.stat.gov.lt; www.transp.lt; www.portofklaipeda.lt

  26. Major opportunities: Transport and logistics (2) • 67% of services exported • 3% of country’s FDI • approx. 5.900 companies • 64,000 employees • 20.246 trucks Sources: www.stat.gov.lt; www.transp.lt; www.portofklaipeda.lt

  27. 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 Source: www.stat.gov.lt

  28. Major opportunities: Energy (2) • 0.7%of exports • 8.4%of country’s FDI • 18.500employees Source: www.stat.gov.lt

  29. Major opportunities: Shared services and business process outsourcing (BPO) (1) • Well-educated multilingual labour pool and leading ICT resources • ~30% of population with higher education – one of the best-educated workforces in CEE • ~90% of Lithuanians speak at least one foreign language: • every second speaks two foreign languages, every third speaks English • 23 universities and 23 colleges: • more than 40,000 university and college graduates every year • excellent ICT infrastructure: • Highest fiber penetration(23%)in Europe (6thin the world) • World’s 2nd fastest upload Internet • Densest network of public Internet access points(875) inEurope • EU’s highest GSM penetration (147%) • Global leadership in the number of mobile telephonesubscribers per 100population Sources: www.stat.gov.lt; www.datamonitor.com; www.smm.lt; www.rrt.lt;

  30. Major opportunities: Shared services and business process outsourcing (BPO) (2) • 11 contact centres • Approx. 2.500 employees Sources: www.stat.gov.lt; www.datamonitor.com; www.smm.lt; www.rrt.lt;World Economic Forum Global Competitiveness Report 2008-2009; GSM European Coverage 2007

  31. Major opportunities: ICT (1) • Modern knowledge economy • development of knowledge society is a national priority funded by the State and the EU • 13 out of 20 largestIT companies in the Baltic States are based in Lithuania • 7 universities and 8 colleges with IT curriculums • excellent ICT infrastructure: • Highest fiber penetration (23%)in Europe (6th in the world) • World’s 2nd fastest upload Internet • Densest network of public Internet access points(875) inEurope • EU’s highest GSM penetration (147%) • Global leadership in the number of mobile telephonesubscribers per 100population Sources: www.stat.gov.lt; www.primeinvestment.lt;www.rrt.lt; World Economic Forum Global Competitiveness Report 2008-2009; GSM European Coverage 2007

  32. Major opportunities: ICT (2) • 3.5% of total exports • 13.7% of totalFDI inthecountry • ~ 2.000 companies • 24.000 employees Sources: www.stat.gov.lt; www.primeinvestment.lt;www.rrt.lt; World Economic Forum Global Competitiveness Report 2008-2009; GSM European Coverage 2007

  33. Major opportunities: Biotech industry (1) • World-class exemplary performance • Lithuania – the biotech hub of CEE; products don’t haveequivalents in CEE • World-class research and inventions, e.gTevaGrastim®cancertreatment medicine, 30 % cheaper but as effective as existingmedicine • 15 biotechresearch centres • 1stBaltic medical and pharmaceutical valley in the Balticcountries • 16 institutions (including 5 major universities) train biotechspecialists for science and business Source: www.stat.gov.lt

  34. Major opportunities: Biotech industry (2) • Annual growth of ~22 % • 0.1% of GDP • 99% exported to 86 countries • Over 1.000 employees Source: www.stat.gov.lt

  35. Major opportunities: Plastics (1) • 3 regional leaders are based in Lithuania • worlds' best PET technologies  • flexibility and adaptability to market changes –pre-formsofvariouscolours, weightandshape • 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 Source: www.stat.gov.lt

  36. Major opportunities: Plastics (2) • 58% of production exported • 0.9%of totalFDI inthecountry • more than 360 companies • ~10.000 employees Source: www.stat.gov.lt

  37. Major opportunities: Laser technologies (1) • Globally acknowledged production and inventions • Development of uniquelaser devices:- 50 % of the world market for high-energy pico-second lasers- Leadership in global production (80 %) of ultra-fast parametriclight generators • Global leadership in applying fundamental research intomanufacture: 11 science centres and laser technology research centres carry out fundamental research Source: www.stat.gov.lt

  38. 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 • ~80% exported to nearly 60 countries • ~450 employees Source: www.stat.gov.lt

  39. Major opportunities: Metal processing, machinery and electric equipment (1) • Widely-acknowledged high-tech products • flexibility tosatisfysmall 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 leadersinthesectoroperate in Lithuania Sources: www.stat.gov.lt; www.ktu.lt

  40. Major opportunities: Metal processing, machinery and electric equipment (2) • 64% of production exported • 1.4%of country’s FDI • ~1.000 companies • 46,000 employees Sources: www.stat.gov.lt; www.ktu.lt

  41. Major opportunities: Furniture andwood 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 Source: www.stat.gov.lt

  42. Major opportunities: Furniture andwood processing (2) • 55 of production exported • 1.5%of country’s FDI • more than 1,570 companies • over 50,000 employees Source: www.stat.gov.lt

  43. 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 Source: www.stat.gov.lt; www.latia.lt

  44. Major opportunities: Textile and clothing (2) • 76% of production exported; 84% exported to EU • 1.3 % of country’s FDI • more than 1,000 companies • 40,000 employees Source: www.stat.gov.lt; www.latia.lt

  45. 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 beerwas awarded at “European Beer Star Awards”, “World Beer Cup” and “World Beer Championship” Sources: www.stat.gov.lt; www.litfood.lt

  46. Major opportunities: Food industry (2) • 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 Sources: www.stat.gov.lt; www.litfood.lt

  47. Major opportunities: Real estateandconstruction (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 classoffices 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 Sources: www.stat.gov.lt; www.eurostat.com; www.colliers.lt; www.resolution.lt

  48. Major opportunities: Real estate and construction (2) • 9.7% of country’s FDI • over 244,000 employees Sources: www.stat.gov.lt; www.eurostat.com; www.colliers.lt; www.resolution.lt

  49. 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 and 2 cultural traditions are on the UNESCO World Heritage Lists • modern up-to date SPA resorts in an ecological environment (Druskininkai, Birstonas, NeringairPalanga) • developed recreational infrastructure: 2 world-standard water amusement parks, 5 ice rinks, a number of theatre and cinema halls, multifunctional amusement centres • well-known cruise lines regularly visit Klaipeda State Seaport Sources: www.stat.gov.lt; www.tourism.lt, www.portofklaipeda.lt

  50. Major opportunities: Tourism (2) • value added growth of 10% • annual growth of approx. 8% of the accommodation of foreign tourists in the country • 46.800 employees in the sector Sources: www.stat.gov.lt; www.tourism.lt, www.portofklaipeda.lt

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