Advantage Lithuania


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Advantage Lithuania

  1. 1. ContentsSmall but Sound 3Northern Europe Service Hub 2015 9 Physical Infrastructure Energy Capacities ICT Framework Talent Business Operation Costs Business-supporting Environment Promising Business Sectors Culture of Trust Macroeconomic FiguresLife in Lithuania 43Invest Lithuania – Focusing on ForeignDirect Investment 47Enterprise Lithuania – Focusing onQuality Production 49Business Communication Tips, Dosand Donts 51Useful Links 54
  2. 2. Smallsound butLithuania...… is a Northeastern European country which combines what is regarded asScandinavian - progressive, orderly, clean, natural and attractive, as well as whatis regarded as Eastern European – new, rapidly developing, on the rise, and as yet ”Even the hardest of winters fears the spring.” – Lithuanian proverbundiscovered. Sometimes called a Northern, and sometimes an Eastern Europeancountry, Lithuania is an authentic combination of Northern and Eastern features.…is one of EU’s economic recovery leaders in 2010. Hit by the global economicrecession, Lithuania’s economy started again growing already in the 3rd quarter of2009, demonstrating the steepest quarterly increase across the European Union.The World Bank says that Lithuania leads the recovery in 2010 in one line with Air quality ranking inPoland, Slovakia, Romania and the Czech Republic among the EU-10 Member European Green City IndexStates. Also, 3 rating agencies upgraded the Lithuanian Government’s borrow- 2010:ing rating from negative to stable in the beginning of 2010. The InternationalMonetary Fund and the World Bank project that the Lithuanian economy will City Scoregrow 1.6% in 2010 and 3.2% in 2011. Vilnius 9.37 Stockholm 9.35…is the European Union’s prime transport centre. Helsinki 8.84The European Union has recognized Lithuania as the prime transport centre inthe region linking the EU with the East. Dublin 8.62 ”In the years ahead Lithuania’s Copenhagen 8.43 recovery should outpace…is a country with the capital city breathing Europe’s cleanest air and Tallinn 8.30 that of most members of the EUrecognized greenest among the new EU-members. In the European Green City Riga 8.28 because Lithuania isn’t wedded toIndex released by Siemens AG and the Economist Intelligence Unit in 2010, slow-growth policies, as are most Berlin 7.86Vilnius tops the category of the European major cities breathing the cleanest Western European states.” Zurich 7.70air. In the overall ranking category Vilnius, standing No. 13, is the greenest – Forbes, 26th May 2010capital among the new EU members. Vienna 7.59 Small but sound 3
  3. 3. Lithuania – Largest Country in Europe in the 15th Century … is ranked as having one of the highest qualities of life among more than Size 190 countries around the globe. In the International Living 2010 Quality of Life Index, Lithuania is ranked 22nd in the world by criteria which consist of nine Lithuania occupies a territory of 65,300 km2. categories: cost of living, culture and leisure, economy, environment, freedom, ”A home, so small it fits under health, infrastructure, safety, risk, and climate. The country shares common borders with Latvia in the north (588 km), Belarus in the south-east (653 km), Poland in the south-west (104 km), and the Ka- a blade of grass, is still a liningrad Region of the Russian Federation, also in the south-west (249 km). Lithuania is larger in size home.” …extended from the Baltic Sea to the Black Sea and was the largest country The length of Baltic Sea coastline with the Eastern Baltic northernmost ice-free – Lithuanian proverb than Belgium, Denmark, the in Europe in the 15th century. By the end of the 14th century the Grand Duchy seaport is 99 km. Netherlands, or Switzerland. of Lithuania occupied the territories of present-day Belarus, Ukraine, and parts With more than half a million people, of Poland and Russia, and not because of conquest but because of diplomacy Cities and inclusiveness. the capital of Lithuania Vilnius is larger than Tallinn, Ljubljana, The capital is Vilnius (population ~ 549,000). Kaunas (~349,000), Klaipėda … was the last pagan state in Europe to accept Christianity. Lithuania officially (~183,000), Šiauliai (~126,000), and Panevėžys (~112,000). Bratislava and some other European adopted Christianity in 1387. capitals. State Government …turned 1000 years old in 2009. Lithuania is an independent democratic republic. In Lithuania, the powers of Lithuania entered the European history when it was first mentioned in a medieval the state are exercised by the Seimas (Parliament), the President, the Govern- German manuscript, the Quedlinburg Chronicle, on 14 February 1009. ment, and the Judiciary. ...has unique nature with 22,000 rivers and rivulets, about 3,000 lakes, a clean seaside and 4 UNESCO World Heritage masterpieces. Lithuania is Currency sometimes called “the land of lakes” and attracts tourists looking for a vaca- Litas (LTL or Lt), which has been pegged to the Euro since 2002 at the rate of tion in the clean and calm countryside. Also, the country welcomes those who 3.4528 LTL/EUR. 100 cents = 1 LTL. Lithuania expects to join the Euro zone want to explore unique natural as well as urban treasures and the deeply rooted in 2014. Baltic culture and customs. Time …is known as a homeland of talented basketball players. For millions of Lithuania is in the Central European Time Zone: GMT+2 hours (+3 hours summer people all over the world, it was precisely basketball that put the name of Lithu- Expansion of Lithuania in the 13-15th centuries time). When it is noon in Vilnius, it is 11:00 am in Stockholm and Frankfurt, ania on the map together with its star players such as Arvydas Sabonis, Šarūnas Lithuanian and Samogitian lands in the Border of Grand Duchy of Lithuania in 10:00 am in London and 5:00 am in New York. 13th century Lands annexed by Mindaugas (until 1263) the 15th century Borders of other states in the 15th century Jasikevičius, Žydrūnas Ilgauskas and others. In the relatively short history of Lands, which temporary belonged to Lithuania, Capital cities Lithuanian basketball (the first basketball game took place in 1922), the men’s Codes during Mindaugas’ reign. Lands annexed by Vytenis (1295-1316) and Gediminas (1316-1341) Other cities Lands annexed by Algirdas (1345-1377) national team won three Olympic bronze medals, was three times the European Lands annexed by Vytautas the Great (1392-1430) champion, and once earned the European silver. To add, in 2010 the Lithuanian The international area code is 00 370 Disputed border regions with the Kingdom of Poland youth basketball team won the U-18 European Basketball Championship. The internet country code is .lt Small but sound 5
  4. 4. Key Milestones National Holidays Lithuanians… ... are a nation of 3.4 million who are sometimes called Northern Italians be- January 1 New Year’s Day cause of their emotional nature as well as open-mindedness and tolerance towards other nationalities and religions. Lithuanians are regarded as more emotional, ”There is anaturalness in the way Lithuanians Regained Schengen area Victory in EU February 16 Independence Day (1918) talk, and in the way we experience pain and love.” Independence membership European Presidency expressive and temperamental, comparing to their Northern neighbours. Also, Basketball Arūnas Matelis, Lithuanian documentary film director March 11 Restoration of Independence (1990) Lithuanians have always lived in peace with other nationalities and respected Championship their cultures. People of 115 different ethnic backgrounds live in Lithuania. 6.7% Easter (Sunday and the following Monday)1991 1992 1997 2000 2003 2004 2007 2009 2010 2011 2012 2013 2014 of the population are Polish, 6.3% Russian, 1.2% Belarusian, and 2.3% are of ENGLISH: God gave teeth, God will give bread. May 1 Labour Day other nationalities. Most of the population is Roman Catholic, but there are also duos duonos. LITHUANIAN: Dievas davė dantis, Dievas SANSKRIT: Devas adadat datas, Devas dat dhanas. WTO EU und NATO Maastricht Introduction 1st Sunday in May Mother’s Day Russian Orthodox, Evangelical Lutherans, Evangelical Reformers, Old Believers, membership membership criteria of Euro Jews, Sunni Muslims, and Karaites. currency June 24 Midsummer Festival Statehood Day (Coronation of Mindaugas, King of …speak the most archaic living Indo-European language, which is closely July 6 Lithuania (1253)) related to Sanskrit. It is possible to compare Lithuanian and Sanskrit in such a ”Whether it’s playing jazz or spearheading the Fluxus avant-garde art way that even those who have not studied linguistics may observe the similarities. movement, Lithuanians have a natural inclination for rearranging, August 15 Assumption Day for looking at things with fresh eyes , for November 1 All Saints’ Day …are one of the best-educated and multilingual people in Central and Eastern coming at reality from an unusual angle. So it should not come Europe. More than 90% of the Lithuanian population has secondary or higher as a surprise that Lithuanian bioscientists have invented a way December 25–26 Christmas of using enzymes to cut genes three times quicker than the best education. This is the highest level of education in the country in a decade and previously known methods.” one of the highest in the EU, the average in the EU-27 being around 70%. And even 40% of the 25 - 34 year olds have higher education, which is almost twice Wally Olins, Saffron Brand Consultants as high as the EU-15 average. 90% of Lithuanians speak a foreign language. Half of the population speaks two foreign languages. National Flag YELLOW: the fertile fields of Lithuania, golden with ripe rye, wheat, flax, and …have produced some globally significant achievements. Lithuanian phar- other crops macy specialists created a cheaper, but no less effective, version of an existing GREEN: the symbol of the nation’s vitality (as represented by nature) medicine for treating cancer. Also, Lithuanian laser companies were among the RED: the bloodshed in defending the homeland’s freedom first in the world to transfer fundamental research into manufacture. Small but sound 7
  5. 5. Northern Europe Service Hub 2015Lithuania is on the right track towardsits major market development goal –becoming the Northern Europe ServiceHub 2015, because it already now has: • 90% of population with secondary or higher education • 40% of population with higher education • 50% speak two foreign languages • 46 higher education institutions • 40% of talent in science and technology • 92% operations done via e-banking ”Expanding international businesses must seize • 88% declaring their income tax online the opportunity in Lithuania.” • 2000 transportation routes to 40 countries Premkumar Bhagwatsaran, CEO of Ideal Invent • Global leadership in mobile e-signature Technologies • World’s fastest upload Internet in 2009 • World’s 5th and Europe’s No. 1 fiber broadband penetration • Europe’s highest fiber optic density • EU’s 1st greatest GSM penetration ”Lithuania was selected as the geographically best place • World’s No. 1 in the number of mobile telephone subscribers per 100 for the expansion of the company business in the Baltic Sea Region. population Also, Lithuania was evaluated as the country maintaining very close and successful business relations with Northern Europe countries.” • Europe’s densest network of public Internet access points Computer Sciences Corporation (CSC) • Low costs - among Top 10 least expensive European countries • Great life quality - among the best locations for life in the EU Northern Europe Service Hub 2015 9
  6. 6. Physical InfrastructureEU’s Prime Transport Centre at the Crossroads of 3 Markets Springboard to Markets Part of Baltic Sea Region ”Lithuania has much to offer the foreign investor seek- ing to set up in the Baltic Region as a springboard to the East as well as to the wider European market.” David Earp, UK Trade & Investment, Cambridgeshire ”We chose Lithuania as a production location because of its closeness to our shops in Europe.” Susanna Wengholt, H&M”One of the advantages of this country is being located on the borderbetween East and West and having transit routes. In Lithuania is located in the Baltic Sea Region (BSR), and has always been an activeour business we are focusing more on the transit routes, and Lithuania’s Lithuania is located on the very crossroads of 3 huge markets. It’s a springboard business partner with its neighbours – other BSR countries – the Scandinavianexcellent geographical location has made Lithuania a transit country.” to the EU markets (Western Europe and Scandinavian countries), and Eastern states and Germany, as well as Poland, Latvia and Estonia. Lithuania’s trade with Henrik Mųller, Hydro Texaco markets (Russia and the Commonwealth of Independent States (CIS)) are also BSR countries makes up almost 70% of all Lithuania’s foreign trade, and about just at Lithuania’s side. 70% of FDI in Lithuania comes also from BSR countries. Northern Europe Service Hub 2015 11
  7. 7. Infrastructure Network Lithuania has 2000 different routes to 40 countries, and the EU’s Transporta- The country has 3 international airports located in Eastern (in the capital city tion Commission designated two of them - the North-South highway and the Vilnius), Central (in the 2nd largest city Kaunas) and Western (in the seaside rail route connecting Scandinavia with Central Europe as well as the East-West resort Palanga) Lithuania. They provide superb facilities to conduct passenger route linking the huge Eastern markets with the rest of Europe - as being among or cargo traffic. the ten most important in Europe. Two Trans European Network (TEN) corridors crossing Lithuania: • North-South direction: I corridor (the VIA BALTICA highway and the RAIL ”One main road is better than a hundred paths.” BALTICA railway), connecting Tallinn - Riga - Saločiai - Panevėžys - Kaunas – Lithuanian proverb - Kalvarija - Warsaw, and I A corridor (Tallinn - Riga - Šiauliai - Tauragė - Kaliningrad) • East-West corridor: IX corridor, IX B corridor branch (Kiev - Minsk - Vilnius 2000 -Klaipėda) and IX D corridor (Kaunas - Kaliningrad) Lithuania has routes to 40 countries. • Crossroads of North, East and West • 2000 routes to 40 countries”We found that the travel, infrastructure, communica- • 2 Pan-European transport corridorstions and people with whom we came into contact were • 3 international airportsexcellent and easy to deal with.” • Northernmost ice-free seaport on the eastern shore of the Baltic Sea Paul Stienlet, General Electric • Regionally best network of roads and highways • 3 multimodal logistic centres: - Klaipėda (seaport–rail–highway) Lithuanian trucks move more cargo than Latvian, Estonian and Russian carriers combined, according to figures by National - Kaunas (rail–airport–highway) Departments of Statistics. - Vilnius (rail–airport–highway) Northern Europe Service Hub 2015 13
  8. 8. Network of shipping lines Energy Capacities Natural gas The northernmost and only ice-free seaport on the eastern shore of the Baltic Lithuania has well-developed infrastructure and links to energy-rich countries. Nearly all natural gas consumed in Lithuania comes from Russia. The Lithuanian Sea is located in the western part of Lithuania. Klaipėda State Seaport is a re- Lithuania is connected to the energy networks of Russia and the Commonwealth Government is planning to invest in building a liquefied natural gas terminal gional transport hub connecting sea, land and railway routes from East to West. of Independent States (CIS) – the very same countries where the EU buys most with underground natural gas storage. The estimated cost of this project is of its energy. 620-670 million EUR. Klaipėda State Seaport handles roughly 7,000 ships and 30 million tonnes of cargo every year, and accepts large tonnage vessels: dry-cargo vessels up to 80,000 Distribution of natural gas is performed with state-regulated prices. The Euro- A number of policies are applied to ensure country’s energy security and com- pean Office of Statistics estimates that natural gas prices for a medium-sized DWT, tankers up to 150,000 DWT and cruise ships up to 270 meters length. The petitiveness. Lithuania pursues production diversification (new nuclear reactor, household in Lithuania for 2009 were 9.9 EUR per GJ of energy. The European ice-free seaport of Klaipėda is able to receive PANAMAX-type vessels. LNG terminal, renewable energy development), international energy market average for 2009 was 12.6 EUR per GJ of energy. The draught of the entrance channel is 15 meters and the draught of the port integration (electricity links to Sweden and Poland) and applies market principles navigation channel is 13-14,5 meters. Increasing the water depth in the northern part of the port to up to 17,5 meters is foreseen. (ownership unbundling in electricity and gas sectors in line with the Third EU Energy Package, electricity market trading) to ensure reliable, affordable and Only Refinery in the Baltic States sustainable energy supply. The only oil refinery in the Baltic States AB Orlen Lietuva owns and operates a Though small in size, Lithuania has a 21,000 kilometres road system, 2/3 of system of pipelines with a total length of about 500 kilometres. The refinery not which is paved with asphalt concrete. Roads in Lithuania are known to be the Electricity only satisfies the demands of the local market, but also exports to the neighbouring best in the region. Lithuania is committed to investing 145 million EUR into The electricity grid is part of the IPS/UPS electricity system, common to former Latvia, Estonia, Poland and Belarus, as well as Ukraine and Western Europe. the Via Baltica international highway, and around 100 million EUR into three Soviet countries. Lithuania, however, is progressing towards joining the European public logistic centers, which will make up a total area of nearly 970 hectares UCTE system. Lithuania is also taking steps to establish links to Scandinavia via in Lithuania’s three largest cities. Sweden, and Western Europe via Poland. One of Central Europe’s largest refiners of crude oil the Polish PKN The Lithuanian Government is currently searching for investors to help build a Orlen’s investment of more than 678 million EUR into the AB Orlen Lithuania has a well-developed railway network running a total of 1,750 kilo- metres. The track is broad gauge, and provides direct connections to Latvia, new nuclear power plant in Lithuania, with an estimated opening date of around Lietuva refinery is the largest foreign direct Poland, Belarus, and Russia (the Kaliningrad Region) as well as a link to Poland. 2018. The cost is estimated at 3-5 billion EUR. investment in Lithuania. Lithuania is also connected to Asia and China via rail. Railways in Lithuania carry For business and industry, the price of electricity is largely unregulated, and approximately 50 million tons of cargo and 7 million passengers per annum. electricity is available for purchase via the electricity market, which is based on the Scandinavian Nordpool model. Along with implementation of the Third There are around 550,000 m² of logistics and warehousing facilities in Lithuania. Energy Package of the EU, the Government has also approved the reorganization The biggest supply of new, modern warehousing facilities is in the capital city plan of energy companies of Lithuania. It stipulates the establishment of four Vilnius (around 300,000 m², growth – 7%), Kaunas is in the 2nd place (around units of electricity companies for the activities of transmission, generation, 200,000 m², growth – 77%), and Klaipėda in the 3rd (85,000 m², growth – 49%). distribution and maintenance. Lithuania’s northern, western, southeastern and northeastern regions are under- going further construction of logistic centres. According to the survey ”Getting Electricity”, which was conducted as a pilot for the Doing Business report, it takes only four steps for a new customer to connect to the electricity network in Lithuania. The only countries in Europe where it takes three steps include Germany, Switzerland, Denmark and Sweden. Compared to neighbouring Eastern Baltic seaports, the port of Klaipėda The cost of connection to the electricity is less than in neighbouring countries. has the widest shipping line network with other seaports. The European Office of Statistics estimates that electricity prices for a medium- sized Lithuanian household for 2009 were 8 Eurocents per kWh. The European average for 2009 was 12 Eurocents per kWh. Northern Europe Service Hub 2015 15
  9. 9. ICT Framework Talent Lithuania deserves to be named the home for the next NOKIA because some”Lithuania came up as one of the best cost/quality significant European and world-scale records belong to the country. Among the Most Multilingual and Most ”When we established our service production facility in Vilnius, the mostcountries for ICT sourcing (specifically with regardsto data entry, customer support specialists) amongst Lithuania maintains world’s leading ICT resources and infrastructure. Besides all Educated in the EU positive experience we had was the high quality of theEstonia, Latvia, Lithuania, Poland, the Czech Republic,Hungary, Romania and Bulgaria, and it was, besides most up-to-date ICT technologies (EDGE technology, 3G mobile communications infrastructure, mobile WiMAX 4G Internet etc.) fully implemented and functioning In 2009 91.3% of the Lithuanian population aged 25 to 64 had a secondary or higher education. This is the highest level of education in the country in staff which made it possible for us to reach the critical production in the entire country, the following significant records belong to Lithuania: level much faster than expected. They came highly educated and motivatedthat, specifically relevant due to its closeness a decade and one of the highest in the EU, the average in the EU-27 being and quickly adopted the company values. Which again made it possibleto Scandinavia and the knowledge of • World’s speediest upload Internet in 2009 around 70%. Already in 2008, compared to 2005, Lithuania had 90.6% of the for us to quickly build company loyalty and company pride.”Scandinavian languages that can be found in • World’s 5th and Europe’s No. 1 fiber broadband penetration (18%) population having completed secondary or higher education and stood 2nd in Per Andreas Vogt, General Manager Lindorff Support Services UAB, Vilniusthe Baltics. ” • Europe’s highest fiber optic density the EU, outpacing Estonia, Norway and Slovakia. Tiina Link, Innovation Norway the Baltics • EU’s 1st greatest mobile penetration of 147% • World’s No. 1 in the number of mobile telephone subscribers per 100 population - 3.4 million of Lithuanians use almost 5 million active SIM cards 30% of the Lithuanian population hold higher education degrees, compared % of population with secondary or higher education (2008) • Global leader in mobile e-signature to the EU average of 24%. And even 40% of the 25 - 34 year olds have higher ”Samsung is very excited to begin Lithuania’s first • Europe’s densest network of public Internet access points (875) education, which is almost twice as high as the EU-15 average. 100 90,9 90,6 90 89 Mobile WiMAX service. We believe that Samsung’s 90 87 86 85 85 82 81 81 80 78 field-proven Mobile WiMAX solutions will contribute 80 73 73 72 to Lithuania with its leading wireless World’s fastest upload Internet (2009), MB/s 91.7% of Lithuanian women aged 25 to 64 have secondary or higher education, 70 70 70 broadband service.” Lithuania 9,0 which is the highest figure in the whole EU. 60 50 53 Woonsub Kim, Executive Vice President and head of Telecom Japan 7,2 40 Europe 6,7 In 2009-2010, more than 144,000 students were enrolled in 23 Lithuania’s Systems Division in Samsung Electronics 30 North America 6,2 universities, and about 57,000 students were enrolled in 23 colleges. Out of 20 Hong Kong 5,0 241,000 of Lithuanian graduates in 2000-2009, 168,000 got their degrees in 10 Sweden 4,7 0 Russia 4,7 universities and 73,000 in colleges. The number of higher education graduates ic Sl ia ia a nd Ge ia Sv y en ia d ria De ary rk s Av m e ce m ly an nd ag ni an Ita bl increased almost 50% or 180,000 during the last decade, and Lithuania continues n ak tv en 27 do iu Ne ma an ed la st Asia 4,4 ua to ng pu rm La la er lg nl ov ov Po Au EU ing Fr Es n Un her Be Hu th Fi Re Sl K Li South Korea 3,2 t to be a pool of well-educated professionals for local and international businesses. h Source: d ec ite Cz South America 2,0 0 2 4 6 8 10 Source: Eurostat Lithuanians are a multi-lingual nation, which makes Lithuanian employees even more attractive. According to the ”Europeans and Languages” survey, 90% of EU’s 1st greatest mobile penetration (2009) Lithuanians are able to participate in a conversation in a language other than their mother tongue. The EU-25 average is only 50%. The three most common Lithuania 147% languages in Lithuania are: Russian, English, and Polish. Italy 146% Luxembourg 142% Austria 134% Germany 132% Netherlands 129% Denmark UK 126% 126% 90% of Lithuanians speak at Ireland 119% Source: least one foreign language. European 0% 50% 100% 150% Commission Northern Europe Service Hub 2015 17