Asian Business Forum

OPENING REMARKS
Mr. Artūras Zuokas, Vilnius City Mayor

THE CITY OF VILNIUS: OPEN
FOR BUSINESS AND GROWTH
Mr. Miroslavas Monkevičius, City Council Secretary
Vilnius City Municipal Government

ASIAN BUSINESS FORUM 2014
MIROSLAVAS MONKEVIČIUS
CITY COUNCIL SECRETARY
VILNIUS CITY MUNICIPAL GOVERNMENT

THE CITY OF
VILNIUS: OPEN
FOR BUSINESS
AND GROWTH

VILNIUS: FACTS AND FIGURES
WHY INVEST IN VILNIUS?

VILNIUS REGIONAL LEADER
q  16 Million inhabitants in a 300 km radius.
q  Vilnius Country generates approximately 40% of Lithuania’s GDP.
q  As of 2011, Vilnius’ economy reached 11,78 billion Euros

EASY ACCESS TO BOTH EASTERN AND WESTERN
MARKETS SEA AND AIR
- 4 International Airports; it takes 2-3 hours to get to Lithuania from the major European cities
- Klaipeda State Seaport is the northern-most ice-free port in the Baltic Sea

WHY INVEST IN VILNIUS?
HIGHLY EDUCATED AND MULTILINGUAL TALENT POOL
WORLD CLASS ICT INFRASTRUCTURE
EASY ACCESS TO BOTH EASTERN AND WESTERN MARKETS
BUSINESS - FRIENDLY ENVIRONMENT
HOME TO WORLD LEADERS IN LIFE SCIENCES
HIGH QUALITY OF LIFE

HIGHLY EDUCATED AND MULTILINGUAL TALENT POOL
The Most Educated Labour Pool in the
EU:
■ Labour pool size: 1.5 million1
1st in the EU: 93% of population have
secondary or higher education2
12th in the World: 77% of population aged
20-24 are enrolled in tertiary education3
2nd in the EU: 47% of population aged 24
- 29 have a university degree2
1st in the World for the share of female
labor force2
Foreign Language Knowledge4:
■ 92% of population speaks at least 1
foreign language*
■ 52% of population speaks at least 2
foreign languages*
■ Languages spoken: Russian (80% ),
English (38%),
Polish (19%), German (14%)
LABOUR POOL STRUCTURE
STUDENTS AT UNIVERSITIES AND COLLEGES
2012-2013
Source 1: Statistics Lithuania
Source 2: Eurostat, 2011 Female labour force, as percentage of total labour force
(50,29%)
Source 3: Global Competitiveness Index 2011-2012
Source 4: European Commission, 2012
* EU average: 54% of population speak 1 foreign language, 25% speak 2 foreign
languages

WORLD CLASS ICT INFRASTRUCTURE
1st for Internet upload and 3rd for download speed in
the EU1
1st in the World Competitiveness Rankings for
communication technology2
1st in Europe for density of network of public Internet
access points (875)
3rd in the EU for the share of fixed broadband lines
equal to or above 30Mbps3
•  The most up-to-date ICT technologies (LTE
technology, 3G mobile communications
infrastructure, mobile WiMAX 4G Internet etc.) fully
implemented and functioning in the entire country
•  93% of financial operations are performed via e-
banking4
•  Among Top 10 countries in the world for cloud
readiness5
17%

12%

11%

11%

10%

8%

8%

8%

8%

7%

Top 10 Countries by Internet Upload
Speed (Mbps)
Hong
Kong

South
Korea

Singapore

Macau

Lithuania

Republic
of
Moldova

15%

12%

11%

10%
9%

9%

9%

9%

8%

8%

Top 10 Countries by Internet Download
Speed (Mbps)
Hong
Kong

Singapore

Romania

South
Korea

Sweden

Macau

Source 1: Ookla Netindex, 2013
Source 2: IMD, The Word competitiveness yearbook, 2011-2012 Commun. techn. rank evaluates
how communications technology (voice and data) meets business requirements
Source 3: European Comission, 2012
Source 4: Statistics Lithuania, 2012
Source 5: Cisco Global Cloud Index, 2013. The Index evaluates Consumer and Business Fixed
Network performance and Consumer and Business Mobile Network performance

HOME TO WORLD LEADERS IN IT
IT Sector in Lithuania Today:
24,500 employed IT professionals
2,185 IT enterprises
Large Talent Pool:
■ 6,200 IT students at 7 universities and 14
colleges
■ 1,750 IT graduates each year
High Growth Potential:
■ 2.98 mln. citizens - 4.53 mln. mobile subscribers by
2012, i.e. penetration of 152%
■ From 2009 to 2011 Lithuania went from 10-20 apps
developed per year, to 200-300
<y(Plan

2nd biggest App store globally with
over 2 billion downloads.
3rd best-selling mobile application on the
Mac App Store. Apple Design Award
2011.
MagicDraw UML - 1st Java based
UML tool trusted by multinational
businesses and NASA; distributed in
more than 70 countries.
1st commercial digital signature pilot for
mobile in the World. 1st in the World with
an online banking application using
Natural User Interface (NUI).
World's first mobile only event
booking app, has recently raised a
$12 million for expansion in the US.
No. 1 social network in Nigeria with 6
M+ registered users and 13 M+
registered users across the World,
focusing on the mobile customers in
emerging markets.

EASY ACCESS TO EASTERN & WESTERN MARKETS
Advanced Logistics:
■ Logistics accounts for 11.7% of GDP1
25,000 truck fleet*2:
_ 75% comply with Euro-3/4/5 exhaust emission
requirements
_ International road transit accounts for 90% of total
road transit
> 850,000 m2 of logistics and warehousing facilities
2-3 hour flights to major European cities and
Moscow
Shuttle cargo services: direct railroads to Russia,
Belarus, Latvia, Poland, Germany,
Ukraine and Asia (incl. China)
Ice-free Klaipeda State Seaport
Reliable and High-Quality Infrastructure:
■ NATO's Northern Distribution Network:
3,100-miles of sea, road, and rail routes connect
Klaipeda (Lithuania) with central Asia
q  1 day
q  2 days
q  3 days
q  4 days
* vehicles for international cargo shipment/transportation

COST-EFFECTIVE BUSINESS DEVELOPMENT LOCATION
Wages
in
the
IT
Industry
in
2013

Wages
in
the
Produc8on
Industry
in

2013

Source : Grafton Recruitment 2013
The information provided in this document constitutes a guide to salaries being paid against
particular job titles/functions in Vilnius in average
The salaries are stated gross in Euro per Year, the salaries are not including benefits / bonuses
IT Manager 27,500-34,300
Technical Support (mid-level) 13,700-16,000
Java Specialist (3-5 yrs experience) 22,900-28,800
Java Specialist (1-3 yrs experience) 14,400-22,900
.Net / C # (3-5 yrs experience) 23,000-27,500
.Net / C # (1-3 yrs experience) 14,400-18,000
Web Developer 18,300-24,000
Software Engineer 23,000-27,500
Network Engineer (3-5 yrs experience) 23,000-31,200
System Analyst 18,300-20,000
Average Yearly
Gross Salary,
EUR
Position in the IT Industry
Production Manager 22,590-45,180
Quality Manager 13,550-31,630
Quality Engineer 11,300-22,590
Manufacturing Shift Leader 9,040-13,550
Machine Operator 5,420-9,040
Logistic Manager 22,590-31,630
Transport Co-ordinator 11,300-15,880
Warehouseman 5,270-6,780
Senior Buyer 9,040-15-810
Junior Buyer 5,420-9,040
Position in the Production
Industry
Average Yearly
Gross Salary,
EUR

Business-Friendly Environment
Incentives for Investment into New Technologies
and R&D3:
q  R&D and experimental expansion expenses
are fully deductible three times
q  very short depreciation periods and fast
depreciation methods for equipment used
for R&D activities
Incentives for Foreign Businesses Investing in:
q  production of export-oriented high-quality
services/products/R&D activities
q  creation of new qualified jobs
Incentives for employment of youth: 23.3% of salary
of a first-time employee (aged16 to 29) is reimbursed to
employers for up to 12 months
TAX RATE SNAPSHOT 1,2
Source 1: PricewaterhouseCoopers
Source 2: KPMG, Deloitte, 2012
Source 3: AmiCorp, “Lithuanian Company as Intellectual Property Holding”, January
2012
TAX
RATES
Corporate profit tax 15%
VAT 21%
Dividends* Up to 15%
Personal income tax 15%
Employee's social security
tax
9%
Social security tax paid by
the employer
30.98%
Real estate tax Up to 3%

SPECIAL TERRITORIES FOR BUSINESS DEVELOPMENT
2 Special Economic Zones (SEZ):
q  0% corporate tax for the first 6 years
q  50% discount on corporate tax over the next 10 years
q  0% tax on dividends
q  0% tax on real estate

GREAT PLACE TO LIVE, EAGER TO CHANGE,
FAST TO INNOVATE
q  Vilnius is among 10 least
expensive EU cities to live in1
q  Among Top 40 countries in the
World for the quality of life2
q  17th in the World in the
Environmental Performance
Index 20123
q  62% of citizens either walk,
bike or take a bus as a mode of
transportation in the capital city
Vilnius
q  10th place in the World in
Smart City rankings4
q  Vilnius’ Old Town, a UNESCO
World Heritage site, is vibrant
and pedestrian-friendly
Source 1: Mercer Cost of Living Index 2012
Source 2: Quality of Life index, International Living 2011
Source 3: Environmental Performance Index , Yale Center for Environmental Law and Policy
2012
Source 4: Hip Cities That Think About How They Work’, The International Herald Tribune 2011

FOREIGN DIRECT INVESTMENT FROM
ASIAN COUNTRIES

FOREIGN DIRECT INVESTMENT IN LITHUANIA
FROM ASIA COUNTRIES
€86 million direct
investments, 120
created jobs

BUSINESS CO-OPERATION
BETWEEN LITHUANIA AND
ASIAN COUNTRIES: STRATEGY
AND PERSPECTIVES
Vice - Minister Kęstutis Trečiokas
The Ministry Of Economy of The Republic of Lithuania

Business Co-operation between Lithuania and
Asian Countries: Strategy and Perspectives
Kęstutis Trečiokas
Vice minister of Economy

Lithuania: in the Center of Europe
Size: 65,300 sq. km1
Population: 2.98 million
Capital: Vilnius
Oﬃcial language:
Lithuanian
(One of the oldest languages in the
world, originating from Sanskrit)
Dominant foreign
languages:
English, Russian,
German, Polish
Currency:
Lithuanian Litas (LTL)
Pegged to EUR since 2002
1 EUR/3.45 LTL
1 USD/0.7339 EUR4
1 USD/2.5341 LTL4
From command
economy to free
market in 20 yrs.
§  21rd freest economy in the World2
§  17th in the ease of doing business3
§  16th in the overall attractiveness for
FDI in the World5
Source 1: Statistics Lithuania
Source 2: Heritage Foundation, Economic Freedom Index, 2014. Index measurements: Rule
of Law, Limited Government, Regulatory Efficiency, and Open Markets
Source 3: World Bank Doing Business Index,2014. The index looks at domestic small and
medium-size companies and measures the regulations applying to them through their life
cycle
Source 4: bank of Lithuania, 4 February 2013
Source 5: The Baseline Profitability Index , 2013. Index measures: asset growth, preservation
of value, and repatriation of capital

Key Milestones
o  Key Milestones
EU
Presidency
EU and NATO
Membership
OSCE
Chairmanship
Goal to
join the
Eurozone
1990 2001 2002 2004 2007 2009 2011 2012 2013 2015
Lithuania
regained
Independence
WTO Membership
Investment
Grade Ratings
from Moody’s,
S&P and Fitch
Schengen Area
Membership
Lithuania’s
Millennium
Celebration
European Basketball
Championship

A Growing Economy
Real GDP growth rate in Selected Economies 2012-2013
Source: Eurostat
-8
-6
-4
-2
0
2
4
6
2012
2013

The Lithuanian Economy
Main Characteristics
o  Export Oriented Growth
o  Technologically Advanced & Hi-Tech Oriented
o  High Skilled Talent Pool
o  Entrepreneurial Culture
o  Incentives for R&D & Investment

Recent Achievements
o  17th in the ease of doing business1
o  21st freest economy in the World 2
o  1st in the overall attractiveness for FDI in the
Baltic states and 2nd in Europe for expected
investment returns3
o  9th Best Country for Business in Eastern Europe
and Central Asia4
Source 1: World Bank Doing Business Report, 2014
Source 2: Heritage Foundation, Economic Freedom Index, 2014
Source 3: The Baseline Profitability Index , 2014
Source 4: Best Countries for Business By Bloomberg Rankings, 2014

Lithuania’s merchandise exports to
Asia, million EUR
332

666

758

695

934

655

825

1,102

1,346

1,665

00

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2004
2005
2006
2007
2008
2009
2010
2011
2012
2013

Source: Statistics Lithuania

Areas for cooperation between
Lithuania and Asia
o  Laser industry
o  Biotechnology
o  Wood-processing industry
o  Processed food
o  Construction sector
o  Machinery and electronics
o  Transport and logistics

Asia's FDI in Lithuania, million EUR
16.03
40.21 43.3
76.59
149.39 154.33
201.14
246.99 243.29
215.38
0
50
100
150
200
250
300
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Statistics Lithuania

DOING BUSINESS WITH JAPAN
Amb. Kazuko Shiraishi - Japan

June
6,
2014

Asian
Business
Forum

Kazuko
Shiraishi,
Ambassador
of
Japan
to
Lithuania

1.  Recent
Economic
Situa8on
in
Japan

2.  Trade
and
Investment
between
Lithuania
and
Japan

3.  Success
Stories

4.  Key
Factors
for
Doing
Business
with
Japan

5.  Contacts

Informa8on

Contents

Ø Japan
is
seeking
to
get
rid
of
deflaSon
and,
at
the
same
Sme,

to
steadily
reduce
government
debt,
while
we
are

faced
with
a
unique
challenge—a
society
aging
at
an

unprecedented
rate,
with
a
consequent
reducSon
in
the

naSon’s
work
force.

Ø To
overcome
these
challenges,
Prime
Minister
Shinzo
Abe

has
taken
an
iniSaSve
of
a
decisive
economic
strategy

consisSng
of
three
pillars,
dubbed
“the
three
arrows”.
These

three
arrows
consist
of
aggressive
monetary
policy,

flexible
fiscal
policy
and
structural
reform
of
the
economy.
Abenomics

8,830

15,627

12,445

16,291

14,485

8,000

9,000

10,000

11,000

12,000

13,000

14,000

15,000

16,000

17,000

36
Abenomics : Effectiveness of the two arrows
GDP
Growth
Rate
ConsumpSon
Capital
Investment

(nominal
terms)
July-‐September
2012
January-‐March
2013
April
-‐
June
2013
July-‐September
2012
October-‐December
2013
Minus
3.1%
Plus
4.8%
Plus
3.9%
Plus
1.1%
Plus
0.7%
July-‐September
2012
April-‐June
2013
Minus
1.0%
Plus
1.7%
(ContribuSon
of
ﬁnal
consumpSon
expenditures
by

households
(in
real
terms)
of
GDP)
July-‐September
2012
April-‐June
2013
October-‐December

2013
Minus
1.0%
Plus
0.1%
Plus
0.7%
(Change
from
previous
quarter
and
these
numbers
are
annual

rates)
(real
terms)
The
dissoluSon
of

the
Lower
House

(2012/11/16)
2012/11/15
2013/5/22
2013/12/30
2013/6/13
Change
in
Nikkei
Sｔock
Average
2014/5/1
Went
up
about

64%
January-‐March
2014
Plus
1.5%

37
Target of the third arrow, “Growth Strategy”
The
Third
Arrow
The
First
Arrow
The
Second
Arrow
The
New
Growth
Strategy:

Realize
a
2%
real
GDP
growth
rate
on

average
over
10
years
1.  PromoSng
private
investment
based
on
bold
regulatory
&

structural
reform

2.  Maximizing
uSlizaSon
of
human
resources
of
women
and

elderly

3.  CreaSng
new
growth
industries
and
overseas
markets
Bold
monetary
policy:
Ending

Deﬂa8on

Flexible
ﬁscal
policy:
S8mula8ng
the

economy

Copyright (C) 2014 JETRO.
All rights reserved.

India
China
Korea
Japan
AUS・NZ
Peru
Chile
Canada
Mexico
EU
Regional
Comprehensive

Economic

Partnership（RCEP）
Trans Pacific Partnership
（TPP）
U.S.
Note：Made
by
JETRO
from
various
materials

※Among
ASEAN:
Singapore,

Malaysia,
Vietnam,
Brunei

par8cipates
in
TPP
nego8a8ons
Japan-‐EU・EPA
ASEAN
Acceleration of FTAs: TPP, RCEP, Japan-EU EPA
Japan-Australia EPA

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2007
2008
2009
2010
2011
2012
2013

Furniture
OpScal
instruments
TexSle

Dairy
products
Tabacco
Fish
and
crustaceans

Processed
food
Organic
chemicals
Others

+33%
(thousad
EUR)
Export from Lithuania to Japan
+44%
+31%

Japanese companies investing Lithuania

Success Story 1
Windows
&
Doors
Producer

Medical

Equipments
Producer

Success Story 2
TexSle
Producer

Success Story 3: Mangalica
"Mangalica
Pig"
-‐
Hungarian

eatable
naSonal
treasure

Key Factors
1.  High
Quality
(Technique,
Design,
Safety
etc.)

2.  Bland
Image

3.  Pa8ence

Contacts Information
Embassy
of
Japan
in
Lithuania

POLICY ON COMMERCIAL AND
TRADE POTENTIAL BETWEEN
LITHUANIA AND INDONESIA
Mrs. Ima Siti Fatimah, Trade Attache
Embassy of Indonesia, Copenhagen

DOING BUSINESS WITH
DELHI: GREAT POTENTIAL FOR
ALL
Mr. Vijay Mehta, President
Indo-Polish Chamber of Commerce, Delhi

SESSION II
ASIAN BUSINESS FORUM

THAILAND: ECONOMY,
POTENTIAL & OPPORTUNITIES
Ms. Ketsuda Supradit, The Minister of Economy And
Finance for U.K. And Europe
The Royal Thai Embassy In London

INVESTMENT OPPORTUNITIES
IN INDONESIA
Mr. J. S. Meyer Siburian, Head of Indonesia Investment
Promotion Center (IIPC), London

LITHUANIA – ASIA: BUSINESS
PARTNERSHIP OUTLOOK
Mr. Aleksandr Izgorodin, Analyst of Economic And Finance,
Lithuanian Confederation of Industrialists

Aleksandr Izgorodin
Analyst
LITHUANIA – ASIA
BUSINESS PARTNERSHIP OUTLOOK
2014-06-06

LPK: MAIN FACTS
•  2105 member companies. 52 business
associations
1
•  LPK members generate over 60% of Lithuanian
GNP and employ over 30% of Lithuanian
workforce
2
•  Number one business advocate (lobbyist) in
Lithuania (survey of magazine “Veidas”, 2011)
3
•  Strong participation in government and
ministry working groups, Tripartite Council,
etc.
4
•  More than 30 business missions to more than
40 countries since 2000
5
•  One of the most quotable organizations in
Lithuania
6

LPK: THE VOICE OF BUSINESS IN LITHUANIA
p  Lithuanian Confederation of Industrialists (LPK) is the
biggest business organization in Lithuania, established in
1989. LPK is the business voice in Lithuania.
p  LPK is a member of:
n  International Organization of Employers (151 employer organizations
from 144 countries all over the world);
n  BUSINESSEUROPE (main horizontal business organization at EU level.
41 member organizations from 35 countries. 20 million companies);
n  International Congress of Industrialists and Entrepreneurs.

LITHUANIAN EXPORT IS POORLY DIVERSIFIED
10%
14%
12% 7%
11%
9%
9% 9% 8%
9%
74%
68% 66% 68%
63%
67%
64% 64% 63% 60%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Lithuanian export structure, 2013
EU
OTHER
CIS
160
Source: Lithuanian Statistics Department

LITHUANIAN TRADE BALANCE IS NEGATIVE
305
121.7
165.35
0
50
100
150
200
250
300
350
China Japan ASEAN
Export, mln. Lt, 2013
1951.7
88.2
184
0
500
1000
1500
2000
2500
China Japan ASEAN
Import, mln. Lt, 2013

LITHUANIAN EXPORT TO ASIA ACCOUNTS FOR 1,21% OF
TOTAL EXPORT
0.63
0.25
0.17
0.05
0.04 0.03 0.02 0.02 0.01 0.00 0.00 0.00
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
Export structure, 2013, %

LITHUANIAN EXPORT IS 40 % ABOVE PRE-CRISIS LEVEL, BUT
EXPORT GROTH IS DIMINISHING
Export –
Overall
CIS
EU (without Latvia
and Estonia)
Latvia and
Estonia
Other
countries
Food products -7,2 11,1 -0,5 15,8 -37,0
Chemical products, plastics -17,6 0,5 -17,6 -0,4 -43,0
Wood products and
furniture
16,1 10,6 8,9 26,9 69,4
Textile and leather 10,1 -12,7 11,2 -6,7 25,2
Metals and electric
mashines
11,8 -11,3 12,6 -26,4 86,3
Transportation vehicles -23,4 -12,6 -30,7 -1,3 66,8
Other 13,7 9,6 13,3 6,2 21,1
Export - Overall -1,4 3,1 -0,3 6,2 -13,8
Source:

New business opportunities for
Lithuanian products in Asia:
Malaysia
Kazakhstan
China

LITHUANIAN – MALAYSIAN BUSINESS COUNCIL
p  Lithuanian – Malaysian business council was established in March 2013 with the provision of LPK
p  Paulius Kunčinas is the president of this council – a graduate of Oxford University
p  He currently is the head of “Oxford Business Group”, which is a consultancy and publishing
company based in Great Britain
p  Paulius constantly monitors economic, business and political movement in Mongolia, China, India,
Indonesia, Malaysia, Thailand, Phillipines, Vietnam and Myanmar.

The counicil obojective is to encourage Lithuanian – Malaysian economic – trade
realationships.
September 2013 – visit of Lithuanian delegation to Malaysia led by Minister of Economy Evaldas
Gustas organized. During the visit meetings with Malaysian government and business officials
were held – overall 23 meetings.
LITHUANIAN – MALAYSIAN BUSINESS COUNCIL

Although Lithuania and Malaysia are small countries in the context of EU and Southern
Asia their export accounts for 84% and 130% of GDP respectively.
Both countries are pursuing to extend the levels of foreign trade diversification
Lithuania is targeting the Southeastern Asian markets, whereas Malaysian businesses are
concentrating on EU and CIS trade routes.
Despite similar strategic objectives Lithuanian and Malaysian businesses do not compete
in most of world wide markets.

MALAYSIA IS PREPARING TO BECOME A DEVELOPED
COUNTRY UNTIL YEAR 2020
A stable government, orientated to new business projects
Supports high added value business
Encourages foreign direct investment
In 2012 GDP growth reached 5,6% - an all time high
Consumption grows 7,2% annually
Unemployment and inflation are as low as 3% and 1,7% respectively
Stable interest rates
From the year 2015 Southeastern Asia will start to act similary to EU
Tariff and other trade bariers will be abolished
A unified Southeastern Asian product and service market will be introduced
Malaysia is a good base for entering the Southeastern Asian counties

MALAYSIA IN THE DOING BUSINESS 2014 RATING TOOK 6TH
PLACE
11
39
75
6
28
68
56
15
17
44
1716
43
21
35
1
4
36
5
30
42
6
0
10
20
30
40
50
60
70
80
Lithuanian and Malaysian comparison. Doing Business 2014 components.
Lithuania
Malaysia

ACCORDING TO THE WORLD WIDE BOING BUSINESS RATING
MALAYSIA IS TAKING THE 6TH PLACE.
Source:
„Doing
Business
2014”

1
12
18
79
99
120
133
138
163
1
6
18
59
99
120
137
108
159
0
20
40
60
80
100
120
140
160
180
Singapore Malaysia Thailand Brunei Vietnam Indonesia Cambodia Phillipines Laos PDR
Doing Business 2014 rating
2013
2014

LITHUANIA-MALAYSIA BUSINESS OPPORTUNITIES
p  Medicine
p  Construction (energy-efficient housing)
p  Renewable energy
p  Export – dairy, chocolate, beverages
p  ICT, laser industry
p  Joint venture companies in Lithuania, production in Lithuania with
the goal to export into ASEAN region

KAZAKHSTAN IS THE DRIVETRAIN OF EXPORT TO THE CIS
REGION

Russia
Ukraine
Belarus
Kazakhstan

CIS
-‐
overall

63
%
of
all

Lithuanian
export

to
CIS
countries

11
%
of
all

Lithuanian
export

to
CIS
countries

16%
of
all

Lithuanian
export

to
CIS
countries

6%
of
all

Lithuanian
export

to
CIS
countries

Food
products
11,1
-‐5,7
-‐27,4
138,2
11,1

•  Meat
and
meat
products
-‐21,2
-‐
-‐93,5
-‐
-‐23,5

•  Milk
and
milk
products
12,5
-‐15,1
-‐33,3
73,3
11,5

Chemicals
and
plasScs
54,8
-‐44,9
-‐5,6
-‐66,5
0,5

Wood
products
and
furniture
9,6
-‐9,4
22,3
118,1
10,6

TeSle
and
leather
-‐21
-‐11,8
-‐8,9
-‐1,5
-‐12,7

Metals,
electrical
pruducSon
3,6
-‐53,5
-‐16,9
-‐37,4
-‐11,3

TransportaSon
vechicles
-‐33,3
-‐27,1
-‐15,4
1143,3
-‐12,6

Other
16,3
-‐26,2
-‐1,7
123,9
9,6

Export
-‐
Overall
12
-‐36,8
-‐9,4
42,1
3,1

WHY KAZAKHSTAN?
p  Kazakhstan market has good potential:
1.  Big market – 16,7 mln. citizens
2.  Forecasted GDP growth 2014-2018:
5,6%;
3.  Low level of unemployment and
growing purshasing power;
4.  Kazakhstan has reached 21 place on
Doing Business rating;
5.  Cultural business aspects are
familiar.
62.77
16.43
10.92
5.68
1.15 0.99 0.86 0.4 0.36 0.33 0.1
0
10
20
30
40
50
60
70
Export to CIS, 2013, %

THE MOST PERSPECTIVE INDUSTRIES FOR EXPORT TO
KAZAKCHSTAN
1.  Food industry (milk products, “Halal” food products)
2.  Alcochol drink industry
3.  Machine industry
4.  Wood industry
5.  Metal industry
6.  Electrical industry
7.  Optical device sector
8.  Education services
9.  Transportation and logistics services
p  Kazakhstan is a leading economy in the Central Asia and positions itself as
a bridge from China to Europe
p  The most perspective sectors of Kazakhstan product export to Lithuania
are the following: oil industry, textile industry (cotton), metal industry
(iron and steel, cooper), sulphur extraction, transportation and logistic
services.

ESTABLISHMENT OF LITHUANIA-CHINA BUSINESS COUNCIL (1)
p  The intention of Lithuanian companies to diversify trade and
strengthen economic relations with developing markets has increased
significantly. The interest in strengthening economic relations with
China is particularly high among Lithuanian companies
p  The survey of 150 biggest Lithuanian manufacturing companies
conducted by LPK shows that in 2014 one in five (18,7%) Lithuanian
manufacturers intent to strengthen economic relationship with China
p  Lithuania-China economic relations are insufficiently developed so far
– for example, the share of Lithuanian export to China in 2013
accounted for only 0,34% of total Lithuanian export and stood at LTL
304 mln.
p  However, there is a strong will on both sides to significantly
strengthen bilateral economic relations between Lithuanian and China

p  Lithuanian Confederation of Industrialists has a significant experience
in operating of various business councils. Thus, in order to strengthen
and develop economic relations with China, the Lithuania-China
Business Council (Council) under the auspices of Lithuanian
Confederation of Industrialists has been established
p  The establishment of the Council has been actively coordinated
between Lithuanian Confederation of Industrialists, Government of
Republic of Lithuania and Embassy of People’s Republic of China in
Lithuania
p  The Council will seek to contribute significantly to strengthening of
bilateral Lithuania-China economic relations, both in terms of bilateral
trade and attracting of FDI from China

p  The biggest potential for Chinese FDI in Lithuania
n  Extraction of natural resources
n  Public and private infrastructure projects
n  Investments into already operating companies (establishment of
joint-ventures, acquisitions of the companies)
n  Investments in order to increase Chinese exports (establishment
of new companies, production lines, increases in operating
capacity) using Lithuania as a production hub and exploiting the
advantages of “made in EU brand” as well as inwards processing
procedures (customs and tariffs are not applied)
p  Lithuanian export opportunities:
n  Ecological and natural food products;
n  High-added value, niche market products;
n  ICT;
n  Wood and timber.

ACHIEVEMENTS SINCE ESTABLISHMENT OF THE COUNCIL
p  The Council has organized a business mission to Ningbo region, which will
accompany the Minister of Economy of Lithuania during his visit to China
p  The Council has met with 4 official and business delegations from China
from Tianjing, Ningbo, Hangzhou, Xinjiang regions
p  Business trip of Chairman of Lithuania-China Business Council has been
organized. Connections with Chinese stakeholders established
p  The Council, together with Enterprise Lithuania, has organized a seminar
on increase of Lithuania-China bilateral trade for Lithuanian companies
p  The Council is in close and constant contact with Lithuanian government,
Lithuanian embassy in China, Chinese embassy in Lithuania
p  Internet site of the Council is being created

CONTACT INFORMATION
Aleksandr Izgorodin
Analyst
T.: +370 698 74451
Email: Aleksandr.Izgorodin@lpk.lt
www.lpk.lt

WHAT YOU CAN LEARN FROM
INDIAN BUSINESSES IN
EUROPE
Mr. Jawahar Jyoti Singh, President of Indo Polish Chamber
of Commerce & Industry, Poland

SESSION III

Logistics Between the Regions:
a Challenge Requiring a Long
Term Strategy
DISCUSSION I

GLOBAL
&
REGIONAL

DISTRIBUTION
NETWORK

Network
of
the
Southern
part
of
the

BalSc
Sea
region
serves
2.3%
of
Asia
-‐

Europe
trade
segment.

INTERNATIONAL
TRADE
VOLUME
OF
EAST-‐WEST
TRANSPORT
CORRIDOR
(552
bln.

€)

STRATEGIC

LOCATION

340
mn

WESTERN

EUROPEAN

POPULATION

250
mn
CIS

POPULATION

110
mn

BALTIC

SEA

REGION

POPULATION

Lithuania
is
a
strategic
loca8on
with

very
business-‐friendly
dynamics.
The

country
oﬀers
easy
and
rapid
access
to

three
important
markets:
the
Bal8c
Sea

Region,
the
European
Union
(EU)
and

the
Commonwealth
of
Independent

States
(CIS).
This
amounts
to

approximately
750
million
consumers

on
Lithuania’s
doorstep.

Developed
solu5on:

AB
Lietuvos
paštas
acts
as
a
transit
postal
operator
for

delivery
of
parcels
from
China
to
EU
/
CIS
countries.

E-‐COMMERCE

TOMAS KERŠIS
Commerce Department Director
Lithuanian railways
LITHUANIAN
RAILWAYS
-‐

YOUR
PARTNER
FOR
LOGISTICS

LITHUANIAN
RAILWAYS

•  Track
gauges
–
1520
mm
and
1435
mm

•  Number
of
stations
–
108

•  Representatives
of
JSC
Lithuanian
Railways
work
in
China,
Russia
and
Belarus

•  Number
of
employees

–
10.600

•  100%
of
the
company's
shares
belong
to
the
State

• 
Railway
infrastructure
manager

•  150-‐year
experience
in
advanced
complex
logistic
solutions

Freight
carrier,
m
t

2008
55

2009
42,7

2010
48,1

2011
52,3

2012
49,4

2013
48,03

Passenger
carrier,

m
pass.

2008
5,1

2009
4,4

2010
4,4

2011
4,7

2012
4,8

2013
4,9

FREIGHT
VOLUME

86%

5%

7%
2%

Railway
freight
transport
in
Lithuania

by
region

Eastern
European

countries

Western
European

countries

The
BalSc
States

Asian
region

113,317

15,088

2,322

0

20,000

40,000

60,000

80,000

100,000

120,000

2009
2010
2011

TOP10
in
EUROPE

WHY
LITHUANIA?

MODERN
AND
EFFICIENT

TRANSPORT
AND

LOGISTICS
SOLUTIONS

PORT
OF
KLAIPEDA

• 

The
port
fully
operates
24
hours
a
day,
7
days

a
week,
all
year
round

• 

The
annual
port
cargo
handling
capacity
is
up

to
60
million
tons

• 

Biggest
container
terminals
in
Baltic
states

and
MSC
hub

•  Ice-‐free
port

OK

EU
AND
CIS
BORDER
CROSSING
IN
30
MINUTES

Kena

Station
is
fully
modernized
and
developed:

tracks
for
long
trains,
IT
systems
for
declaration
and
control
of
wagons,
automated
switch
system,
commercial

control
system,
electronic
dynamic
scales,
radiation
meter,
X-‐ray
and
other
modern
equipment

All
implemented
measures
let
perform
border
crossing
procedures
fast
and
precisely

RAIL
BALTICA

Latvia

Estonia

Lithuania

Belarus

Ukraine

Russia

Finland

Poland

Czechia

Slovakia

Hungary
Austria

Germany

Track gauge 1435 mm
Rail Baltica
EU member states
Non EU member
states
Track gauge 1520/
(1524) mm
Helsinki

Warsaw

Track gauge 1435 mm
(reconstruction)
Rail Baltica II (project)
Track gauge 1435 mm
(building a new line)
Riga

Kaunas

Tallinn

CONTAINER
TRAINS
NETWORK

SUN
TRAIN

The
main
purpose
of
intermodal
train
“SUN
train”
is
to
establish

effective
logistic
chain
between
East
and
West.

VIKING
TRAIN

Award:

“Best
intermodal
project”

Istanbul
–
Kapi
Kule
(~220
km)/Svilengrad
izt.
fr.

–
Ruse
fr.
(406
km)/Giurgiu
Nord
–
Dornesti
(605

km)/Vadul
Siret
–
Berezhest
(852
km)/Slovechno

–
Gudogai
(554
km)/Kena
–
Draugyste
(427
km)-‐

Scandinavia
8
Day

ŠEŠTOKAI
RAILWAY
STATION
AND
TRAIN
–

ŠEŠTOKAI
EXPRESS

•  Reloading
cargo
from
standart
(1435
mm)
to
wide
(1520
mm)
gauge
railway

•  Bulk
cargo
terminal
project

•  ŠEŠTOKAI
EXPRESS
–
intermodal
train
from
Poland
to
Russia

Intermodal
train
–

,,Šeštokai
Express”

Route:

Warsaw
–
Sestokai
–
Minsk
–

Sestokai

Distance:

1126
km

Transit
8me:

3
days

State
partners:

Russia,
Belarus,
Lithuania,
Poland

Operator:

Hupac
Intermodal
SA,
Intermodal

Express

MERCURY
TRAIN

• 

Currently,
container
train
“Mercury”
is
operating
on
the
route
Klaipėda-‐Moscow

twice
a
month.

BALTIC
WIND

• 

Travel
time
-‐
5
days.

• 

Main
purpose
of
the
“BALTIC
WIND“
train
is
to
provide

regular
shipment
service
in
containers
to
various
clients

from
Lithuania
to
Central
Asia
and
broaden
the

possibilities
of
Russian
Freight
passing
from
one
country
to

another
through
a
third
country.

• 

Going
further
the
frequency
of
the
train

departure
is
planned
at
2-‐3
times
per
month.

On
26
September
2013
hirst
train
with
automotive
components

departed
from
the
Paneriai
station
of
the
Lithuanian
railways
to

the
Kustanay
station
of
the
Kazakhstan
railways.

CONTAINER
TRAINS
NETWORK

TRAIN
NAME
2012
2013
CHANGE,
%

Viking
train
49.178
38.173
-‐22,4

Vilnius
shuple
3.986
10.697
+168,4

Šeštokai
Express
1
034
2
139
+106,9

Mercury
train
361
1.633
+352,4

Saulė
354
1.188
+235,5

Bal8ka-‐Tranzit
387
503
+30,0

Bal8c
Wind
-‐
428
New
Project

• 
“Nemunas”
project
is
a
contrailer
train
by
which
trucks
with

semitrailers
are
transported

• 

Routes:

• 
Kaunas
(Palemonas)
–
Vilnius
(Paneriai)
–
Minsk

(Koliadichi)
–
Vilnius
(Paneriai)
–
Kaunas
(Palemonas).

“NEMUNAS”
PROJECT
IS
AN
EXCELLENT
SOLUTION
FOR
ROAD

TRANSPORT
–
THE
WAY
TO
AVOID
TRAFFIC
JAMS
AT
STATE
BORDER

CROSSING
POINTS

•  One
of
the
problems
in
organizing
transportation
by
roads
between
Lithuania
and
Belarus
is

long
queues
at
the
state
border.

•  To
solve
this
problem
JSC
Lithuanian
Railways
together
with

its
partners
offers
new
service
called
“Nemunas”
contrailer

train.

ALTERNATIVE

“NEMUNAS”

contrailer
train

Time
of
delivery

up
to
10
hr

Length
of
train:

30
trucks
with

semitrailers

Passenger
wagon
for

drivers

Thursday
morning
–
from

Minsk
to
Vilnius/Kaunas.

Friday
evening
–
from

Kaunas/Vilnius
back
to

Belarus

PUBLIC
LOGISTIC
CENTERS

PUBLIC
LOGISTIC
CENTERS

VILNIUS
PUBLIC
LOGISTIC

CENTER

KAUNAS
PUBLIC
LOGISTIC

CENTRE

KLAIPĖDA
PUBLIC
LOGISTIC

CENTER

Storage
–
1
500
TEU

Storage
–
550
TEU

Storage
–
1200
TEU

Loading
area
–
600
m

(1st
stage)
and
1000
m
(2d
stage).

Loading
area
–

4
x
442
m

4
railways
1000
meters
length
each

Loading
capacity
–
more
than

100.000
TEU
per
year

Loading
capacity
–50.000
TEU
per

year

Loading
capacity
–80.000
TEU
per

year

Will
be
hinished
in
2014

Will
be
hinished
in
2014

Plan
to
start
third
stage
intermodal

terminal
is
in
2015

PUBLIC
LOGISTIC
CENTERS
(VILNIUS)

Finished
46%

TOMAS KERŠIS
Commerce Department Director
Lithuanian Railways
LET‘S
DO
LOGISTICS
TOGETHER

SESSION IV

Lithuanian Business Sectors
Bringing the Most Value
DISCUSSION II

Asian Countries in Lithuania:
the Specifics of Doing Business
in Lithuania
DISCUSSION III

The Specifics of doing
business in Lithuania
Dovile Burgiene
LAWIN Lideika, Petrauskas, Valiūnas ir partneriai
Head of the Lithuania Corporate and M&A practice group
Partner
T. +370 52681826
M. +370 68677649
E. dovile.burgiene@lawin.lt
Vilnius, 6 June 2014

Doing Business / World Bank / 2014
216
Rank % distance to frontier * Change in Rank
2014 17 75.79 8
2013 25 73.54 2.25
/  Doing business provides objective measures of business regulations and their enforcement across 189
economies.
Overall ease of doing business
Starting a business
* Distance to frontier – distance of each economy to the "frontier," which represents the highest performance observed on each of the topics
across all economies included in Doing Business. An economy’s distance to frontier is indicated on a scale from 0 to 100, where 0 represents
the lowest performance and 100 the frontier.
Rank % distance to frontier * Change in Rank
2014 11 93.23 94
2013 105 83.47 9.76

Corporate presence
Most popular type of company – private limited liability company, in Lithuanian – uždaroji akcinė bendrovė
(UAB)
/  Incorporation:
•  Time – 3 business days as of signing of incorporation documents
•  Expenses:
o  LTL 10,000 (EUR 2,900) – minimum share capital
o  LTL 1,000 (EUR 290) – notarization and registration costs
•  VAT payer registration – 3 business days, free of charge
/  Shareholders:
•  1 – 249
•  Lithuanian or foreign individuals or legal entities
•  Limited liability except when company cannot discharge its obligations due to unfair actions of shareholders
/  Management:
•  Must to have 1 CEO – to be employed or seconded
•  Board of Directors – not compulsory
/  Accountancy:
•  Must to have accountant – employee or service provider
•  Annual financial reporting to local company register, tax declarations
•  Audit of financial accounts – if required
/  Public trading in securities prohibited. If preferable – choose another company type – public limited liability
company (in Lithuanian – akcinė bendrovė)
217

Employment
Employment contracts
/  Generally – open-ended contracts
/  Termination at no fault of employee (economic, technological reasons, etc.):
•  notice period 2 – 4 months
•  severance payment 1 – 6 monthly salaries
/  Alternative – temporary employment through employment agencies
Working time
/  Regular – 40 working hours per week
/  Overtime:
•  in exceptional cases
•  not more than 4 hours in 2 consequent days and 120 hours per year
•  pay (for overtime and night work) – minimum 1.5 times salary
/  Alternative – shift work under more flexible aggregate time scheme, avoidance for paying extra
/  Vacation: minimum paid 28-35 calendar days per year
Wages
/ Minimum monthly salary gross – LTL 1,000 (~ EUR 290)
/ Average monthly salary gross – LTL 2,305 (~ EUR 668)
218

Immigration
EU citizens
/  Schengen area – generally EU citizens enjoy freedom of movement
and work permits are not required
/  Formal requirement to declare place of residence when stay in
Lithuania exceeds 3 months within 180 days
Non-EU citizens
/  Generally no visa if stay does not exceed 3 months within period of 6
months (subject to international treaties)
/  If longer stay – temporary residence permit or national long-term visa
required (issues Lithuanian consulate or immigration office in
Lithuania)
/  May be subject to work permits (issues State Labor Exchange). But
many exceptions may apply, for example:
•  No work permit required if employee works in Lithuanian
subsidiary / branch / representative office of foreign company
up to 3 years, provided such professional has minimum 1
year’s work experience in foreign group company
•  No work permit may be required for highly-qualified employees
provided their salary amounts to not less than 2 state average
salaries gross (currently, LTL 4,610 (~ EUR 1,335) and their
university diplomas are recognized by respective recognition
authority in Lithuania
219

MAIN TAXES
220
Corporate income tax – 15%
/  Possibility to transfer tax losses
between group companies
/  CIT incentive for investments into
s u b s t a n t i a l t e c h n o l o g i c a l
improvements
/  Cost related to R&D may be
deducted 3 times from income
VAT – 21%
/  Full deduction of input VAT
available as long as all income is
earned from VAT taxable activities
/  Possibility to refund VAT within ~1
month from submission of request
to refund VAT
Personal income tax – 15%
Dividends 0% – 15%
Employment related taxes
30,98% – 32,60% - social insurance
9% - health insurance
0,2 % - guarantee fund
Real estate tax 0.3 % – 3%
Imposed on real estate (except for land)
located in Lithuania and owned by
Lithuanian or foreign companies

Subsidies
EU funding
/  Investors eligible for funding – foreign investors interested in locating
business in Lithuania as well as foreign companies already operating on
Lithuanian market but eager to further expand
/  Distribution of EU support for period 2014 – 2020 has not yet started (EU
Commission has to approve the Operational Programme for Lithuania)
/  Support for big companies in current period will be reduced and generally
will be available in sector of research and development (R&D) and
innovation (Smart Specialisation)
/  Support to foreign investors is planned under the measure – SMARTINVEST
LT+ (only project is available)
•  Aid intensity – up to 80% (small and medium companies) and up to
65% (big companies)
•  Maximum support – up to LTL 10 million (~EUR 2,9 million)
National subsidies
/  Lithuania is currently preparing national measures, designed for foreign
investors, these would be available only at the end of this year (4th quarter)
/  Currently there is so called “transitional period” - no actual measures are
available, because the funds from the programming period of 2007-2013
have already been used and the funds under 2014-2020 period are still not
available
221

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