Lituània: Invertir a Lituània
FDI flows to Lithuania have been fluctuating over the last decade, firstly due to the global financial crisis then to the regional crisis involving Russia and Ukraine, following a trend that is observed in other Baltic countries. According to UNCTAD's 2021 World Investment Report, FDI flows decreased from USD 1.2 billion to USD 479 million between 2019 and 2020, as a result of the global economic crisis triggered by the Covid-19 pandemic. The total stock of FDI stood at USD 23.7 billion at the end of 2020. Foreign direct investment stocks are concentrated in the financial and insurance services, manufacturing, real estate, wholesale, retail sectors and IT services. Sweden remains the country's main investor (concentrated in the energy sector), followed by the Netherlands, Estonia, Cyprus and Germany (OECD). Data from the Bank of Lithuania shows that in the first three quarters of 2021 cumulative FDI inflows rose by 4.1% over the year and amounted to EUR 24.8 billion (or 46.4% of GDP). Germany, Sweden, Estonia and the Netherlands were the main investors. The largest share of FDI was destined to companies active in financial and insurance services (EUR 9.6 billion), manufacturing (EUR 3.5 billion), wholesale and retail trade as well as repair of motor vehicles and motorcycles (EUR 2.7 billion) and real estate transactions (EUR 2.4 billion).
Lithuania offers tax exemptions to foreign companies, which can also profit from high-quality infrastructure and a skilled workforce. In recent years, building permits were facilitated, access to electricity was improved, minority investors were better protected and the tax payment system became electronic. Furthermore, national legislation assures equal protection for both foreign and domestic investors. However, the country is still dependent on its exports towards Russia, hence vulnerable to external shocks, its domestic market is small and the income is lower than neighbouring countries. Lithuania improved its position and ranked 11th out of 190 economies in World Bank’s latest Doing Business report (from the 14th place of the previous edition). Recently, Lithuania strengthened the national security review mechanism to align it with the EU FDI Screening Regulation. Amid other changes, it extended the list of companies and entities considered relevant for national security to include radioactive waste companies, 5G service providers and infrastructure developers, secure public data networks, public safety and emergency services, digital mobile radio communication network operators and selected power generation companies.
Foreign Direct Investment | 2019 | 2020 | 2021 |
FDI Inward Flow (million USD) | 3,022 | 3,492 | 2,053 |
FDI Stock (million USD) | 23,245 | 29,374 | 29,396 |
Number of Greenfield Investments* | 71 | 66 | 53 |
Value of Greenfield Investments (million USD) | 1,931 | 1,094 | 2,076 |
Source: UNCTAD, Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Country Comparison For the Protection of Investors | Lithuania | Eastern Europe & Central Asia | United States | Germany |
Index of Transaction Transparency* | 7.0 | 7.5 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 4.0 | 5.0 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 7.0 | 6.8 | 9.0 | 5.0 |
Source: Doing Business, Latest available data
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
The main strengths of Lithuania are:
The country has a number of weaknesses:
In recent years, various measures have also been taken to protect minority investors and facilitate administrative procedures (the payment of taxes and social contributions is now done online).
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Actualitzacions: January 2023