BUSINESS CLIMATE SURVEY 2012                                   LITHUANIA      Vilnius, August 23rd, 2012SWEDISH TRADE COUN...
This document is not complete without oral comments of the research team        from the Swedish Trade Council. Any copyin...
TABLE OF CONTENTS         Introduction         Executive summary         Respondents’ profile         Investment environme...
INTRODUCTION         The Business Climate Survey 2012 was initiated and financed by the Embassy of Sweden in         Vilni...
HOW TO READ THE DOCUMENT          Slide structure:    1                                                                   ...
TABLE OF CONTENTS         Introduction         Executive summary         Respondents’ profile         Investment environme...
LITHUANIA IS A GOOD PLACE TO DO BUSINESS…         In general, Lithuania is a good place to do business. Swedish capital co...
… HOWEVER IMPROVEMENTS IN SOME AREAS ARE CRUCIAL         Nonetheless, there are important areas for improvement. Amongst t...
RESULTS            Criteria               Quality of life                                        Expected to              ...
RESULTS            Criteria                                                                      Expected to              ...
RESULTS            Criteria               Mobile telephony and ICT                 ✓               Roads                  ...
TABLE OF CONTENTS         Introduction         Executive summary         Respondents’ profile         Investment environme...
RESPONDENTS ARE EXPERIENCED TOP EXECUTIVES…                   Respondents’ position, %                                    ...
…MAINLY LITHUANIAN NATIONALS AND WORKING IN PRIVATE    ENTERPRISES…                        Company type, %                ...
…WITH HIGH MONTHLY INCOME…                                              Average monthly income, %     60                  ...
…RELATIVELY YOUNG, PREDOMINANTLY MALE.                    Respondents’ age, %                          Respondents’ gender...
RESPONDENTS MANAGE COMPANIES WITH COMMON SERVICE      FOCUS IN VERSATILE INDUSTRIES.                        Industry, %   ...
NEARLY HALF OF THE COMPANIES ARE MEDIUM AND LARGE    ENTERPRISES…                                  Annual turnover, %     ...
…FOCUSED ON THE LOCAL MARKET WHILE EXPECTING    GROWTH FROM EXPORTS.     What is the focus of your Lithuanian business ope...
TABLE OF CONTENTS         Introduction         Executive summary         Respondents’ profile         Investment environme...
THE QUALITY OF LIFE IS GOOD AND FURTHER IMPROVING     Please evaluate the quality of life in Lithuania     %        80    ...
IT IS A GOOD PLACE TO DO BUSINESS    Generally, is Lithuania a good place to do business?    %   80                       ...
LOCAL MARKET IS STILL LUCRATIVE. THE FUTURE    EXPECTATIONS LOOK EVEN BETTER     Your company in Lithuania generates     %...
IT IS BECOMING EASIER TO FIND RELIABLE BUSINESS    PARTNERS     How easy or difficult is it to find a reliable business pa...
MORE INVESTMENTS ARE PLANNED.    Are you planning investments?    %                                    2012        2015   ...
INVESTMENTS ARE EXPECTED TO SLIGHTLY INCREASE.    Accumulated investments (breakdown in pie chart indicates investments by...
POLITICAL INFLUENCE ON BUSINESS IS EXPECTED TO    WEAKEN…    Political environment in Lithuania. Does it affect your busin...
…ALTHOUGH GOVERNMENTAL IMPACT ON BUSINESS IS    EXPECTED TO REMAIN QUITE STRONG     Do the actions of the Government influ...
TRADITIONAL MEDIA FUNCTION AS COMMUNICATION    PLATFORM…     Do you perceive Lithuanian media to be a functioning platform...
…HOWEVER LACKS CREDIBILITY     Do you perceive Lithuanian media as a reliable source of information?     %     50         ...
AN OVERWHELMING MAJORITY OF RESPONDENTS HAVE NOT    BEEN DIRECTLY EXPOSED TO CORRUPTION…    Have you been offered to pay a...
…BUT THEY ASSUME THAT CORRUPTION MECHANISMS ARE    WIDELY USED     Do you assume that your competitors won a tender / a co...
LACK OF TRANSPARENCY IS EXPECTED TO DECREASE BUT    STILL REMAINS AN ISSUE    Corruption in Lithuania influences your busi...
TABLE OF CONTENTS         Introduction         Executive summary         Respondents’ profile         Investment environme...
REGULATORY FRAMEWORK IS QUITE FAVORABLE...    Do you think that the country has a legislation that is favorable for your o...
…BUT FOLLOWED ONLY TO SOME EXTENT. HOWEVER MAJOR    IMPROVEMENTS EXPECTED.     To what extent the law is followed in Lithu...
TAXATION SYSTEM IS REASONABLE AND IMPROVING    Taxation system in Lithuania is:     %       60                            ...
DISPUTE SETTLING MECHANISMS ARE NOT TRUSTED TO FULL    EXTENT…     Do you trust the dispute settling system in Lithuania? ...
…AND THE PAYMENT TERMS ARE OFTEN NOT FOLLOWED    How are payment terms followed in Lithuania?                             ...
The worst payment culture in the Baltics. Delayed payments became                        some kind of tradition.          ...
TABLE OF CONTENTS         Introduction         Executive summary and recommendations         Respondents’ profile         ...
IT IS EASY TO ESTABLISH A COMPANY    Establishment of your company (e.g. forming of the company, registration, etc.) in   ...
GOOD SALARY AND PRODUCTIVITY RATIO    In your opinion, how are salaries compared to the productivity in Lithuania?    %   ...
GOOD AVAILABILITY OF COMPETENT STAFF…    In your opinion, how is the availability of competent local staff in regard to   ...
LOTS OF HARD WORK BUT LACK OF INITIATIVE    Local labor force is: hardworking, easy to train, loyal, creative and initiati...
INTERNET AND MOBILE TELEPHONY INFRASTRUCTURE IS    EXCELLENT    In your opinion, how does the infrastructure work in Lithu...
WELL DEVELOPED ROAD INFRASTRUCTURE, POOR    ACCESSIBILITY BY AIR    In your opinion, how does the infrastructure work in L...
ACCESS TO CAPITAL IS RATHER DIFFICULT    Access to the capital / funds in Lithuania is:                                   ...
COMPETITION IS STRONG    In your opinion, the competition in the Lithuanian market is:                                    ...
NORDIC COMPANIES ARE VERY WELL PERCEIVED    How are you perceived in Lithuania as a representative of Nordic company?     ...
TABLE OF CONTENTS         Introduction         Executive summary         Respondents’ profile         Investment environme...
QUOTES         The following slides include a number of verbal and written comments, received from         respondents of ...
QUOTES    Advice for the Government                                                   “Changes are taking place all the ti...
QUOTES    Tax system                                                  “Tax system needs more stability –                  ...
QUOTES    Corruption                                                “As compared to […], in regards of                    ...
QUOTES    Bureaucracy, Infrastructure and Competition                                                 “We encounter bureau...
QUOTES    General comments                                                    “If you know how to play according to the lo...
BUSINESS CLIMATE SURVEY 2012LITHUANIASwedish Trade CouncilOffice in Lithuania, The Baltic States UnitA. Gostauto str. 40B ...
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Business climate survey. 2012 Lithuania. Swedish trade council

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Business climate survey. 2012 Lithuania. Swedish trade council

  1. 1. BUSINESS CLIMATE SURVEY 2012 LITHUANIA Vilnius, August 23rd, 2012SWEDISH TRADE COUNCIL 2012-08-23
  2. 2. This document is not complete without oral comments of the research team from the Swedish Trade Council. Any copying or commenting is prohibited without a written permission from the Swedish Trade Council.SWEDISH TRADE COUNCIL 2012-08-23
  3. 3. TABLE OF CONTENTS Introduction Executive summary Respondents’ profile Investment environment, regulations and profitability Legislation, taxation and payments Establishment, infrastructure and human capital QuotesSWEDISH TRADE COUNCIL 3 2012-08-23
  4. 4. INTRODUCTION The Business Climate Survey 2012 was initiated and financed by the Embassy of Sweden in Vilnius and the Swedish Trade Council. The study aims to present the perception of the business climate in Lithuania among companies with Swedish capital, identify areas for improvement and outline future expectations. The survey was conducted by using closed-ended questions, yet the majority of questions allowed respondents to write comments and recommendations. The study was finalized by carrying out in-depth interviews with selected respondents. The results are based on answers of 44 respondents, who represent 34 percent of the possible respondents’ pool – there are 130 Swedish companies currently active in the country. In addition to this survey, identical questions were answered by 23 representatives of Nordic capital companies, active in Lithuania, in order to crosscheck the sentiment of Nordic capital companies. The study was conducted by the Swedish Trade Council during April–June 2012. IntroductionSWEDISH TRADE COUNCIL 4 2012-08-23
  5. 5. HOW TO READ THE DOCUMENT Slide structure: 1 1. Conclusion 2 Indicators of expectations 3 2. Question as asked in the questionnaire 4 3. Situation is expected to improve 4. Situation is expected to worsen 5 5. Situation is expected to remain unchanged 6 6. Areas of change or focus 7. Part of the document 7SWEDISH TRADE COUNCIL 5 2012-08-23
  6. 6. TABLE OF CONTENTS Introduction Executive summary Respondents’ profile Investment environment, regulations and profitability Legislation, taxation and payments Establishment, infrastructure and human capital QuotesSWEDISH TRADE COUNCIL 6 2012-08-23
  7. 7. LITHUANIA IS A GOOD PLACE TO DO BUSINESS… In general, Lithuania is a good place to do business. Swedish capital companies find the labor force, relatively low cost levels and strategic location of the country as some of the most attractive aspects for business in Lithuania. Their motivation to do business in this country is strengthened by positive expectations for development of the economy at large. Stable political environment, good quality of life, profitability of local market, easiness to start a company, excellent ICT infrastructure – these are some of the other aspects which make Lithuania attractive for business. This attractiveness is confirmed by investments – respondents are investing over 230 million LTL this year and investments are expected to slightly increase during upcoming years. The study reveals that corruption is assumed to be a big issue, however very few companies have been exposed to corruption directly. The survey also shows that major improvements in this area have occurred in recent years. Executive summarySWEDISH TRADE COUNCIL 7 2012-08-23
  8. 8. … HOWEVER IMPROVEMENTS IN SOME AREAS ARE CRUCIAL Nonetheless, there are important areas for improvement. Amongst them – payment moral, time consuming procedures and accessibility by air are of the most concern and need to be addressed without delay. According to Swedish companies, simplifying and stabilizing tax regime, following payment terms, liberalizing labor regulations and further strengthening transparency would positively affect the business climate in Lithuania. The study also revealed a low trust of representatives of the Swedish companies in Lithuania’s media and dispute settling system, as well as a rather difficult access to capital. Executive summarySWEDISH TRADE COUNCIL 8 2012-08-23
  9. 9. RESULTS Criteria Quality of life Expected to ✓ improve Good place to do business Expected to ✓ improve Profitability of local market Expected to ✓ increase Easiness of finding business partner Expected to ✓ improve Political environment for business Expected to ✓ improve Governmental influence to operations Expected to ✓ be stable Credibility of media ✓ Expectations unknown Corruption ✓ Expected to decrease Executive summarySWEDISH TRADE COUNCIL 9 2012-08-23
  10. 10. RESULTS Criteria Expected to Favourability of legislation ✓ improve Expected to Following the law ✓ improve Expected to Tax system ✓ improve Expectations Dispute settling system ✓ unknown Expectations Following of payment terms ✓ unknown Easiness to start company Expectations ✓ unknown Salary and productivity ratio Expectations ✓ unknown Availability of competent staff Expectations ✓ unknown Executive summarySWEDISH TRADE COUNCIL 10 2012-08-23
  11. 11. RESULTS Criteria Mobile telephony and ICT ✓ Roads ✓ Sea routes ✓ Railway ✓ Accessibility by air ✓ Access to capital ✓ Perception about Nordic companies ✓ Executive summarySWEDISH TRADE COUNCIL 11 2012-08-23
  12. 12. TABLE OF CONTENTS Introduction Executive summary Respondents’ profile Investment environment, regulations and profitability Legislation, taxation and payments Establishment, infrastructure and human capital QuotesSWEDISH TRADE COUNCIL 12 2012-08-23
  13. 13. RESPONDENTS ARE EXPERIENCED TOP EXECUTIVES… Respondents’ position, % Year of company’s establishment, % 10 7 9 2 2 10 47 10 44 respondents: Owner Member of board Partner Managing director 44 Before 1994 Sales manager 1994–2003 Marketing manager Other 2004–2012 59 Respondents’ profileSWEDISH TRADE COUNCIL 13 2012-08-23
  14. 14. …MAINLY LITHUANIAN NATIONALS AND WORKING IN PRIVATE ENTERPRISES… Company type, % Respondents’ nationality, % 7 9 22 Lithuanian Public (AB) 69 Swedish Private (UAB) Other 93 Respondents’ profileSWEDISH TRADE COUNCIL 14 2012-08-23
  15. 15. …WITH HIGH MONTHLY INCOME… Average monthly income, % 60 55 50 40 31 30 20 10 10 4 0 Up to 5 thousand 6–10 thousand 11–25 thousand 26–50 thousand Respondents’ profileSWEDISH TRADE COUNCIL 15 2012-08-23
  16. 16. …RELATIVELY YOUNG, PREDOMINANTLY MALE. Respondents’ age, % Respondents’ gender, % 7 10 18 30 27–39 40–49 Female 50–59 90 Male 60–63 45 Respondents’ profileSWEDISH TRADE COUNCIL 16 2012-08-23
  17. 17. RESPONDENTS MANAGE COMPANIES WITH COMMON SERVICE FOCUS IN VERSATILE INDUSTRIES. Industry, % Area of operations, % 10 7 10 19 42 5 50 Consulting Finance Service company ITT 20 Production Production company Logistics Trade company 32 5 Other Other Respondents’ profileSWEDISH TRADE COUNCIL 17 2012-08-23
  18. 18. NEARLY HALF OF THE COMPANIES ARE MEDIUM AND LARGE ENTERPRISES… Annual turnover, % 12 33 33 Up to 3 MLTL 4–10 MLTL 11–100 MLTL More than 101 MLTL 22 Respondents’ profileSWEDISH TRADE COUNCIL 18 2012-08-23
  19. 19. …FOCUSED ON THE LOCAL MARKET WHILE EXPECTING GROWTH FROM EXPORTS. What is the focus of your Lithuanian business operations? Sales to the Lithuanian market , % Transit / exports, % 47 31 47 31 8 10 8 21 19 21 23 17 5 17 11 28 21 21 11 3 0 10 20 30 40 50 0 10 20 30 40 50 60 2012 2015 Respondents’ profileSWEDISH TRADE COUNCIL 19 2012-08-23
  20. 20. TABLE OF CONTENTS Introduction Executive summary Respondents’ profile Investment environment, regulations and profitability Legislation, taxation and payments Establishment, infrastructure and human capital QuotesSWEDISH TRADE COUNCIL 20 2012-08-23
  21. 21. THE QUALITY OF LIFE IS GOOD AND FURTHER IMPROVING Please evaluate the quality of life in Lithuania % 80 “Lithuania is going in the right direction.” 76 70 Undisclosed respondent 60 54 50 40 36 30 19 20 10 2012 10 5 2015 0 0 0 0 0 Very bad Poor Not good or bad Good The best Investment environment, regulations and profitabilitySWEDISH TRADE COUNCIL 21 2012-08-23
  22. 22. IT IS A GOOD PLACE TO DO BUSINESS Generally, is Lithuania a good place to do business? % 80 74 “Business climate in Lithuania is good. It has 70 some limitations, but it works.” 67 60 Undisclosed respondents 50 “Lithuania is the easiest country to 40 get things done.” 30 23 21 20 2012 10 8 5 2015 2 0 0 0 0 Very bad Poor Not good or bad Good The best Investment environment, regulations and profitabilitySWEDISH TRADE COUNCIL 22 2012-08-23
  23. 23. LOCAL MARKET IS STILL LUCRATIVE. THE FUTURE EXPECTATIONS LOOK EVEN BETTER Your company in Lithuania generates % 60 “Lithuania belongs to a larger region – 57 the Baltic Sea region – which is the 54 fastest growing region in Europe.” 50 Undisclosed respondent 40 33 30 21 20 20 10 2012 10 5 2015 0 0 0 0 Big loss Some loss Breaks even Some profit High profit Investment environment, regulations and profitabilitySWEDISH TRADE COUNCIL 23 2012-08-23
  24. 24. IT IS BECOMING EASIER TO FIND RELIABLE BUSINESS PARTNERS How easy or difficult is it to find a reliable business partner in this market? % 60 “The situation in finding a reliable 49 business partner became drastically 50 better around 2005, but the risk of 44 being tricked still exists.” 41 40 31 Undisclosed respondent 30 20 18 13 10 2012 2 2 0 0 2015 0 Very difficult Difficult Not easy or Easy Very easy difficult Investment environment, regulations and profitabilitySWEDISH TRADE COUNCIL 24 2012-08-23
  25. 25. MORE INVESTMENTS ARE PLANNED. Are you planning investments? % 2012 2015 61 51 Yes No 28 39 Investment environment, regulations and profitabilitySWEDISH TRADE COUNCIL 25 2012-08-23
  26. 26. INVESTMENTS ARE EXPECTED TO SLIGHTLY INCREASE. Accumulated investments (breakdown in pie chart indicates investments by individual companies, ranging from 1 thousand to 50 million EUR) 2012 2015 ∑ 67 million EUR ∑ 71 million EUR 30 mil. EUR 50 mil. EUR 30 mil. EUR Investment environment, regulations and profitabilitySWEDISH TRADE COUNCIL 26 2012-08-23
  27. 27. POLITICAL INFLUENCE ON BUSINESS IS EXPECTED TO WEAKEN… Political environment in Lithuania. Does it affect your business? % 60 54 54 50 40 30 20 18 15 16 13 13 10 2012 10 5 2 2015 0 To very high extent To high extent To some extent To little extent Does not influence Investment environment, regulations and profitabilitySWEDISH TRADE COUNCIL 27 2012-08-23
  28. 28. …ALTHOUGH GOVERNMENTAL IMPACT ON BUSINESS IS EXPECTED TO REMAIN QUITE STRONG Do the actions of the Government influence your operations? % 60 50 50 42 “Well prepared and communicated 40 changes to legislation with proper transition periods – no surprises!” 30 26 24 19 A recommendation for 20 16 the Government by an undisclosed respondent 10 8 8 5 2 2012 0 2015 To very high To high extent To some extent To little extent Does not extent influence Investment environment, regulations and profitabilitySWEDISH TRADE COUNCIL 28 2012-08-23
  29. 29. TRADITIONAL MEDIA FUNCTION AS COMMUNICATION PLATFORM… Do you perceive Lithuanian media to be a functioning platform for public communication about your company? % 50 “Media is a key channel for marketing and PR.” 39 40 33 Undisclosed respondent 30 19 20 10 6 3 0 Very well-functioning Functioning quite well Functioning to some Nearly non-functioning Not functioning at all extent Investment environment, regulations and profitabilitySWEDISH TRADE COUNCIL 29 2012-08-23
  30. 30. …HOWEVER LACKS CREDIBILITY Do you perceive Lithuanian media as a reliable source of information? % 50 42 “I doubt regarding an independent media in Lithuania. There are only a few 40 publications I can trust and many I can 24 not.” 30 Undisclosed respondents “At times competitors use owned 20 18 media to gain competitive 16 advantages.” 10 0 0 Not reliable at all To very little extent To some extent To high extent To very high extent Investment environment, regulations and profitabilitySWEDISH TRADE COUNCIL 30 2012-08-23
  31. 31. AN OVERWHELMING MAJORITY OF RESPONDENTS HAVE NOT BEEN DIRECTLY EXPOSED TO CORRUPTION… Have you been offered to pay a bribe or to use other corruption mechanisms to win a tender / a contract during the period of the last 3 years? 15 There was a big change. Now there’s not a lot of corruption left. At least 9 out of 10 tenders in Lithuania are “clean”. If you bring the lowest price, you get the tender. It might be different in another sphere. Yes Undisclosed respondents No 85 Investment environment, regulations and profitabilitySWEDISH TRADE COUNCIL 31 2012-08-23
  32. 32. …BUT THEY ASSUME THAT CORRUPTION MECHANISMS ARE WIDELY USED Do you assume that your competitors won a tender / a contract because of corruption mechanisms involved? 46 I have never encountered corruption directly, but I know I lost tenders because of it. The perception of corruption is bigger than the corruption itself. When a company loses a tender, it has to explain somehow, why it lost it and corruption usually becomes the best explanation. Corruption is also when my competitor wins a tender because he knows the guy who holds the tender. “La familia”? 54 Yes No Undisclosed respondent Investment environment, regulations and profitabilitySWEDISH TRADE COUNCIL 32 2012-08-23
  33. 33. LACK OF TRANSPARENCY IS EXPECTED TO DECREASE BUT STILL REMAINS AN ISSUE Corruption in Lithuania influences your business: % 50 “Open up information in 40 40 public registers.” 34 33 30 28 28 Undisclosed respondents 21 20 “Transparency needs to be reached in very small steps.” 10 8 5 2012 3 0 2015 0 To very high To high extent To some extent To little extent Does not extent influence Investment environment, regulations and profitabilitySWEDISH TRADE COUNCIL 33 2012-08-23
  34. 34. TABLE OF CONTENTS Introduction Executive summary Respondents’ profile Investment environment, regulations and profitability Legislation, taxation and payments Establishment, infrastructure and human capital QuotesSWEDISH TRADE COUNCIL 34 2012-08-23
  35. 35. REGULATORY FRAMEWORK IS QUITE FAVORABLE... Do you think that the country has a legislation that is favorable for your operations? % 60 “The level of bureaucracy in 51 51 Lithuania is not bad […].” 50 40 Undisclosed respondents 33 30 22 “A lot of paper work and a 19 lot of stamping. But 20 bureaucracy is not on a problematic level.” 10 8 5 5 3 3 2012 0 2015 Legislation is To very little extent To some extent To high extent To very high extent unfavorable for our operations Legislation, taxation and paymentsSWEDISH TRADE COUNCIL 35 2012-08-23
  36. 36. …BUT FOLLOWED ONLY TO SOME EXTENT. HOWEVER MAJOR IMPROVEMENTS EXPECTED. To what extent the law is followed in Lithuania? % 70 66 […], but then Lithuanian companies should have to 60 follow the rules. And that’s where the challenge comes. 50 50 Undisclosed respondent 39 40 30 24 20 11 2012 10 8 2 2015 0 0 0 0 Not followed at all To very little extent To some extent To high extent To very high extent Legislation, taxation and paymentsSWEDISH TRADE COUNCIL 36 2012-08-23
  37. 37. TAXATION SYSTEM IS REASONABLE AND IMPROVING Taxation system in Lithuania is: % 60 54 “I find it reasonable. But simplification is needed 50 48 everywhere.” 40 38 Undisclosed respondents 30 27 “Tax level in Lithuania is Christmas for me. It’s a fantastic tax system, as I 20 see it.” 14 11 10 2012 5 3 2015 0 0 0 Bad Poor Not good or bad Good Best Legislation, taxation and paymentsSWEDISH TRADE COUNCIL 37 2012-08-23
  38. 38. DISPUTE SETTLING MECHANISMS ARE NOT TRUSTED TO FULL EXTENT… Do you trust the dispute settling system in Lithuania? Anyone can sue anyone in Lithuania with no consequences. Undisclosed respondent TO LITTLE EXTENT or NO TO VERY HIGH or HIGH TRUST AT ALL EXTENT: 25% 25% 50% Legislation, taxation and paymentsSWEDISH TRADE COUNCIL 38 2012-08-23
  39. 39. …AND THE PAYMENT TERMS ARE OFTEN NOT FOLLOWED How are payment terms followed in Lithuania? By private companies, % By municipal and governmental bodies, % 48 31 25 22 19 20 17 9 6 3 Not followed To little To some To high To very high Not followed To little To some To high To very high at all extent extent extent extent at all extent extent extent extent Legislation, taxation and paymentsSWEDISH TRADE COUNCIL 39 2012-08-23
  40. 40. The worst payment culture in the Baltics. Delayed payments became some kind of tradition. Many overdue invoices. In some cases invoices of private companies overdue because municipality / Government does not pay on time and the chain is closing… Undisclosed respondentsSWEDISH TRADE COUNCIL 40 2012-08-23
  41. 41. TABLE OF CONTENTS Introduction Executive summary and recommendations Respondents’ profile Investment environment, regulations and profitability Legislation, taxation and payments Establishment, infrastructure and human capital QuotesSWEDISH TRADE COUNCIL 41 2012-08-23
  42. 42. IT IS EASY TO ESTABLISH A COMPANY Establishment of your company (e.g. forming of the company, registration, etc.) in Lithuania was: NOT EASY or DIFFICULT Establishment, infrastructure and human capitalSWEDISH TRADE COUNCIL 42 2012-08-23
  43. 43. GOOD SALARY AND PRODUCTIVITY RATIO In your opinion, how are salaries compared to the productivity in Lithuania? % 49 41 8 3 0 Very low salary level Low salary level Well-balanced salary level High salary level Very high salary level Establishment, infrastructure and human capitalSWEDISH TRADE COUNCIL 43 2012-08-23
  44. 44. GOOD AVAILABILITY OF COMPETENT STAFF… In your opinion, how is the availability of competent local staff in regard to management, sales, development, production, job positions: 70 3 60 14 50 6 0 40 68 4 30 50 47 20 43 30 10 0 Very good -11 -14 -15 -14 Good -10 -19 Not good or poor (excluded) -20 Very Poor Poor -30 Production Management Sales Other Business development Establishment, infrastructure and human capitalSWEDISH TRADE COUNCIL 44 2012-08-23
  45. 45. LOTS OF HARD WORK BUT LACK OF INITIATIVE Local labor force is: hardworking, easy to train, loyal, creative and initiative % Creativeness and initiative are the most appreciated [but] missing aspects in regards of local staff. 89 Undisclosed respondent 86 62 49 41 Hardworking Easy to train Loyal Creative Initiative Establishment, infrastructure and human capital 45SWEDISH TRADE COUNCIL 2012-08-23
  46. 46. INTERNET AND MOBILE TELEPHONY INFRASTRUCTURE IS EXCELLENT In your opinion, how does the infrastructure work in Lithuania in regard to mobile telephony and Internet? % 100 90 80 70 74 74 60 50 40 Very well 30 Well 20 26 24 Not well not bad 10 0 3 0 Mobile telephony Internet Establishment, infrastructure and human capitalSWEDISH TRADE COUNCIL 46 2012-08-23
  47. 47. WELL DEVELOPED ROAD INFRASTRUCTURE, POOR ACCESSIBILITY BY AIR In your opinion, how does the infrastructure work in Lithuania in regard to aviation, railroads, sea routs, roads? 80 60 “Aviation is the biggest problem. 27 Vilnius is off the airport charts these 9 days.” 3 40 Undisclosed respondent 20 45 43 41 0 19 0 Very well -9 -21 -6 -19 -27 Well -20 -3 -3 Not well not bad -14 (excluded) -40 Very badly Badly -60 Aviation Railroads Sea rout Roads Establishment, infrastructure and human capitalSWEDISH TRADE COUNCIL 47 2012-08-23
  48. 48. ACCESS TO CAPITAL IS RATHER DIFFICULT Access to the capital / funds in Lithuania is: Keep positive dialogue with banks to improve private business financing. Undisclosed respondent NOT EASY or DIFFICULT Establishment, infrastructure and human capitalSWEDISH TRADE COUNCIL 48 2012-08-23
  49. 49. COMPETITION IS STRONG In your opinion, the competition in the Lithuanian market is: We permanently face war on price. Undisclosed respondent NOT LOW or FIERCE Establishment, infrastructure and human capitalSWEDISH TRADE COUNCIL 49 2012-08-23
  50. 50. NORDIC COMPANIES ARE VERY WELL PERCEIVED How are you perceived in Lithuania as a representative of Nordic company? There is a trust in Nordic companies, business and competences they carry out and implement. Undisclosed respondent NOT WELL or BADLY Establishment, infrastructure and human capitalSWEDISH TRADE COUNCIL 50 2012-08-23
  51. 51. TABLE OF CONTENTS Introduction Executive summary Respondents’ profile Investment environment, regulations and profitability Legislation, taxation and payments Establishment, infrastructure and human capital QuotesSWEDISH TRADE COUNCIL 51 2012-08-23
  52. 52. QUOTES The following slides include a number of verbal and written comments, received from respondents of the survey. We have removed: − repeated comments; − offensive messages; − most of names of countries, cities or companies, unless it is needed to understand the context. Please note: − original language / formulations are used; − comments do not necessarily correspond with the results of this study as more often negative experiences are expressed with comments.SWEDISH TRADE COUNCIL 52 2012-08-23
  53. 53. QUOTES Advice for the Government “Changes are taking place all the time. Stability would be good.” “Reorganize all the monopoly “Publicity in decisions taken, companies in municipalities and personal responsibility of the staff in owned by a municipality, and impose the state institutions.” more transparency.” Undisclosed respondents “Decide what the long term “Transparency, clarity, stability.” Lithuania’s competitive advantage is.”SWEDISH TRADE COUNCIL 53 2012-08-23
  54. 54. QUOTES Tax system “Tax system needs more stability – fluctuations should not be so frequent.” “The lower the taxes, the smaller the “black market”. But in general tax system is better than 10 years “Complicated income tax ago.” calculations.” Undisclosed respondents “Lithuania is only 21 years old. It’s “It is too complicated and has huge natural, that the taxes are administrative burden.” changing.”SWEDISH TRADE COUNCIL 54 2012-08-23
  55. 55. QUOTES Corruption “As compared to […], in regards of tenders, Lithuania is the best country.” “We make it very expensive to win a tender for those who try to “go “EU supported projects are often around”. We do that by offering a rigged, from what I hear.” price as low as possible. That’s how we fight with corruption.” Undisclosed respondents “10 years ago the scale of corruption “The quality of tendering has to be was way bigger.” better. You need to strengthen the skills on the administrative level.”SWEDISH TRADE COUNCIL 55 2012-08-23
  56. 56. QUOTES Bureaucracy, Infrastructure and Competition “We encounter bureaucracy in two spheres: immigration and customs. But in general it’s getting better and better.” “Competition in Lithuania: low price “No direct flights to Stockholm, no and low quality beats quality, but boats.” more expensive products.” Undisclosed respondents “Taxis outside Vilnius International “Market share targets prevail against Airport rob customers with rates reasonable financial targets – volume exactly twice what it costs in Tallinn!” dominates against income.”SWEDISH TRADE COUNCIL 56 2012-08-23
  57. 57. QUOTES General comments “If you know how to play according to the local rules, you can have quite secure business in Lithuania.” “You have to learn to live with your “Too many people are not doing neighbors. That is where the money what they have promised to do. If is.” you promised, do it. Else, don’t do Undisclosed it.” respondents “Lithuania is a very tolerant country, “The business climate in Lithuania is multi-linguistic. It’s really fantastic not based on a win-win model yet. when you look at it.” It’s either I you win-you lose, or vice versa.”SWEDISH TRADE COUNCIL 57 2012-08-23
  58. 58. BUSINESS CLIMATE SURVEY 2012LITHUANIASwedish Trade CouncilOffice in Lithuania, The Baltic States UnitA. Gostauto str. 40B (floor 12), LT-01112 Vilnius, LithuaniaTel: +370 5 212 61 55 | Fax: +370 5 212 66 97litauen@swedishtrade.se | www.swedishtrade.se

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