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: 3.4 million % of Lithuanians % Poles % Russians
Capital and biggest city: Vilnius - population: 549,000
State language: Lithuanian
State Government: Democratic Republic
Religion: % of Roman Catholics, % Orthodox

3. Business opportunities 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
Financial support and fiscal incentives for businesses
Non-financial support

4. International business presence
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,

6. Lithuanian economy at a glance
2005
2006
2007
2008
2009
2010
2011F
GDP, EUR bn
20.9
23.9
28.6
32.2
26.7
27.2
GDP growth (annual), %
7.8
9.8
2.8
-14.8
1.3
Annual inflation, %
2.7
3.8
5.8
11.1
4.2
1.1
1.8
FDI, EUR bn
4.7
6.9
8.4
10.3
9.2 -
Exports, EUR bn
9.5
11.3
12.5
16.1
11.7
16.8
Imports, EUR bn
12.4
15.4
17.8
21.1
13.1
16.2
Unemployment, %
8.3
5.6
4.3
13.7
17.9
15.8
Sources: Lithuanian Department of Statistics, Ministry of Finance,

7. GDP by economic sectors, 2009
Source: Lithuanian Department of Statistics,

8. FDI in Lithuania, EUR bn
Source: Lithuanian Department of Statistics,

9. Major countries investors, 2009
Source: Lithuanian Department of Statistics,

10. FDI in Lithuania by economic sector, 2009
Source: Lithuanian Department of Statistics,

11. Multinationals feeling at home

12. Lithuania’s foreign trade, EUR bn
Source: Lithuanian Department of Statistics,

13. Lithuanian export dynamics
Years / Country EU
CIS
Russia
USA
China
2009, EUR M
7583,6
2765,9
1562,3
347,8
21,9
2004, EUR M
5001,7
1221,2
693,6
353,2
9,4

14. Lithuania’s major exports destinations, 2009
Source: Lithuanian Department of Statistics,

15. Major importers to Lithuania, 2009
Source: Lithuanian Department of Statistics,

16. Lithuania’s exports by products, 2009, %
Source: Lithuanian Department of Statistics, www,stat,gov,lt

17. Lithuania’s imports by products, 2009, %
Source: Lithuanian Department of Statistics, www,stat,gov,lt

18. Sources: www.eurostat.com
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:

19. Wages, 2010 1Q Wages EUR Minimal hourly wages 1.40
Minimal monthly wages
232
Average monthly wages
588
Source: Lithuanian Statistics Department,

20. Main business taxes Tax % Corporate profit tax 15 VAT 21 Dividends
0* to 15
Personal income tax
(+ 6% health insurance contribution)
Social security tax for employer 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.

21. Business set-up costs 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

22. 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

23. 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 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

24. Dense network of shipping lines

25. Financial support & 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 technologies and R&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

26. Ready-for-investment locations
2 free economic zones (FEZ):
0% corporate tax during the first 6 years and only 50% of corporate 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 physical infrastructure
Tax incentives

27. Valleys for fusion of science and business
Network of R&D centres in 3 largest cities
Specialization in different scientific reasearch areas
Great concentration of talent
Sufficient supply of new office space
Government’s support (EUR 400 M grants in )

28. Incentives for new technologies and R&D
Scientific research and experimental development (R&D) costs deducted 3 times from income for the tax period during which they were incurred, if the performed R&D works are related to the usual or intended activities of the entity that generate or will generate income or economic benefit
Super-accelerated depreciation - acquisition price of fixed assets used in the R&D activities can be written-off within two years
Investments into substantial technological improvements will entitle the companies to reduce the taxable profit down by 50%

29. approx. EUR 7 billion (approx. EUR 3 billion in 2004-2006)
EU support for Lithuania in
approx. EUR 7 billion (approx. EUR 3 billion in )
Source: Ministry of Finance,

30. 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

31. Diversified industry
25,9% of total FDI settles down in industry (EUR 2,5 bn as of Q1 2010)
Industry+construction – 29% of of total FDI (25% country’s GDP)
Source: Lithuanian Department of Statistics,

32. 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

33. 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

34. Sources: www.stat.gov.lt; www.transp.lt; www.portofklaipeda.lt
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)
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
3 international airports
3 international and regionally important public logistic centres under construction
Sources:

35. Sources: www.stat.gov.lt; www.transp.lt; www.portofklaipeda.lt
Major opportunities: Transport and logistics (2)
13.5% of GDP
67% of services exported
3% of country’s FDI
approx companies
64,000 employees
trucks
Sources:

36. 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:

37. Major opportunities: Energy (2)
3.86% of GDP
0.7% of exports
8.4% of country’s FDI
employees
Source:

38. 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 (6th in the world)
World’s fastest upload Internet and 4th by broadband quality score
Densest network of public Internet access points (875) in Europe
EU’s highest GSM penetration (147%)
Global leadership in the number of mobile telephone subscribers per 100 population
Sources: World Economic Forum Global Competitiveness Report ; GSM European Coverage 2007

39. Major opportunities: Shared services and business process outsourcing (BPO) (2)
11 contact centres
Approx employees
Sources: World Economic Forum Global Competitiveness Report ; GSM European Coverage 2007

40. 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 largest IT 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 fastest upload Internet and 4th by broadband quality score
Densest network of public Internet access points (875) in Europe
EU’s highest GSM penetration (147%)
Global leadership in the number of mobile telephone subscribers per 100 population
Sources: World Economic Forum Global Competitiveness Report ; GSM European Coverage 2007

41. Major opportunities: ICT (2)
2.1% of GDP
3.5% of total exports
13.7% of total FDI in the country
~ companies
employees
Sources: World Economic Forum Global Competitiveness Report ; GSM European Coverage 2007

42. 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
16 institutions (including 5 major universities) train biotech specialists for science and business
Source:

43. Major opportunities: Biotech industry (2)
Annual growth of ~22 %
0.1% of GDP
99% exported to 86 countries
Over employees
Source:

44. Major opportunities: Plastics (1)
3 regional leaders are based in 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
Source:

45. Major opportunities: Plastics (2)
0.8% of GDP
58% of production exported
0.9% of total FDI in the country
more than 360 companies
~ employees
Source:

46. Major opportunities: Laser technologies (1)
Globally acknowledged production and inventions
Development of unique laser devices: % of the world market for high-energy pico-second lasers - Leadership in global production (80 %) 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
Source:

47. 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:

48. Sources: www.stat.gov.lt; www.ktu.lt
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
Sources:

49. Sources: www.stat.gov.lt; www.ktu.lt
Major opportunities: Metal processing, machinery and electric equipment (2)
4.9% of GDP
64% of production exported
1.4% of country’s FDI
~1.000 companies
46,000 employees
Sources:

50. 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
Source:

51. 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
Source:

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

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

54. Sources: www.stat.gov.lt; www.litfood.lt
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”
Sources:

55. Sources: www.stat.gov.lt; www.litfood.lt
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
Sources:

56. 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
Sources:

57. Major opportunities: Real estate and construction (2)
21% of GDP (2007)
9.7% of country’s FDI
over 244,000 employees
Sources:

58. Sources: www.stat.gov.lt; www.tourism.lt, www.portofklaipeda.lt
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, 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
well-known cruise lines regularly visit Klaipeda State Seaport
Sources:

59. Sources: www.stat.gov.lt; www.tourism.lt, www.portofklaipeda.lt
Major opportunities: Tourism (2)
2.7% of GDP
value added growth of 10%
annual growth of approx. 8% of the accommodation of foreign tourists in the country
employees in the sector
Sources:

60. Lithuanian market prospects
Northern Europe Service Hub 2015:
B2B services
Logistics centre
Medical services centre
Centre of Excellence and Innovation for Traditional Industries 2015
Northern Europe Innovation Centre 2020

61. High quality of life
Quality of life: one of the highest in the EU; higher than Sweden, Great Britain and Greece
Among TOP 10 least expensive countries in Europe
Almost medical institutions, more than 13 thous. doctors, doctors for 100,000 inhabitants
3.893 wireless Internet zones
Sources: International Living 2010 Quality of Life Index, Eurostat; Communications Regulatory Authority

62. Perfect place for vacation
4 UNESCO World Heritage sites
Well-preserved nature, ecological tourism
World-class entertainment and leisure services, international cultural festivals