The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world. They analyze a variety of economies that are or could be markets for U.S. businesses. The Investment Climate Statements are also references for working with partner governments to create enabling business environments that are not only economically sound, but address issues of labor, human rights, responsible business conduct, and steps taken to combat corruption. The reports cover topics including Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, and Corruption.
Executive Summary
Lithuania is strategically situated at the crossroads of Europe and Eurasia. It offers investors a diversified economy, EU rules and norms, a well-educated multilingual workforce, advanced IT infrastructure and a stable democratic government. The Lithuanian economy has been growing steadily since the 2009 economic crisis but contracted in 2020 due to economic fallout from the COVID-19 pandemic. However, it recovered relatively rapidly in 2021, reaching 5.1 percent GDP growth thanks to budget surpluses and accumulated financial reserves prior to the crisis, as well as a well-diversified economy. The country joined the Eurozone in January 2015 and completed the accession process for the Organization for Economic Cooperation and Development (OECD) in May 2018. Lithuania’s income levels are lower than in most of the EU. Based on the average net monthly wage, Lithuania is 23rd of 27 EU member states. According to Bank of Lithuania statistics, at the end of 2021, the United States was Lithuania’s 15th largest investor, with cumulative investments totaling $366 million (1.3 percent of total FDI).
The current government, elected at the end of 2020, has continued prior governments’ efforts to improve the business climate and lower barriers to investment. It initiated amendments to the Law on Investments which aimed to create more favorable conditions for foreign investors relocating to Lithuania, as well as a law on profit tax exemption for 20 years large and significant investment to the country. The government provides equal treatment to foreign and domestic investors and sets few limitations on their activities. Foreign investors have the right to repatriate or reinvest profits without restriction and can bring disputes to the International Center for the Settlement of Investment Disputes. Lithuania offers special incentives, such as tax concessions, to both small companies and strategic investors. Incentives are also available in seven Special Economic Zones located throughout the country.
U.S. executives report some burdensome procedures to obtain business and residence permits, and limited instances of low-level corruption in government. Transportation barriers, especially insufficient direct air links with some European cities, remain a hindrance to investment, as does the lack of transparency in government procurement.
Lithuania offers many investment opportunities in most of its economy sectors. The sectors which to date attracted most investment include Information and Communication Technology, Biotech, Metal Processing, Machinery and Electrical Equipment, Plastics, Furniture, Wood Processing and Paper Industry, Textiles and Clothing. Lithuania also offers opportunities for investment in the growing sectors of Real Estate and Construction, Business Process Outsourcing (BPO), Shared Services, Financial Technologies, Biotech and Lasers.
To access the ICS, visit the U.S. Department of State Investment Climate Statements website