The number of working people increased
In recent years, the Lithuanian economy and the investment sector have grown consistently. It is important that the number of the working population of the country increased, unemployment decreased and good prospects for salary growth can be seen. The stability of the country’s economy and its rapid steps forward are greatly influenced by investments.
Aušrinė Armonaitė, head of the Ministry of Economy and Innovation (EIMIN), assures that the interest of foreign businesses in Lithuania is obvious, as evidenced by record investments, contracts, already implemented and currently planned projects. According to the minister, EIMIN paid a lot of attention to improving the conditions for business investing in the country, many measures have been implemented and it can be seen that they are working.
“One of the important initiatives is the Green Corridor project prepared by EIMIN. He predicts that a business investing at least 20 million EUR in long-term capital and which undertakes to create at least 150 new jobs, is granted the status of a large project, which makes it much easier and faster to settle in Lithuania.
At the same time, the status of a project important to the state is also granted, and 0% is applied for a period of up to 20 years. corporate tax rate. We already have 17 large-scale project contracts, the implementation of which is expected to create more than 4.5 thousand jobs. new jobs and attract more than 1.4 billion EUR investments”, the minister said about the significant push for foreign businesses to settle in Lithuania.
Attention to the qualifications of employees
EIMIN Vice Minister Karolis Žemaitis points out that Lithuania has long ceased to be a country of cheap labor, our energy resources are expensive, therefore, in order to attract more direct foreign investments to the country, we need new sources of competitiveness. Therefore, he is convinced that Lithuania’s competitiveness model must not be based on low costs, but on competencies and specialization. These criteria are extremely important for foreign business, therefore, in an effort to respond to the need, a lot of investment has been made in recent years in attracting specialists and developing their and new talent’s competencies.
“We consistently invest in promoting entrepreneurship and attracting young people to fields of study that are relevant for an advanced economy. Last year, 2.79 million was allocated for these measures. euros. This year, it is planned not only to continue them, but also to allocate additional funds for the development of new measures.
Opportunities to grow and improve work skills are constantly being expanded not only for Lithuanians, but also for talents from abroad to create the most favorable opportunities to establish themselves in Lithuania. From July 1 the amendments to the Law on Health Insurance initiated by the Ministry of Economy and Innovation entered into force, according to which the family members of specialists from third (non-EU) countries living and working in Lithuania will be included in the Lithuanian health insurance system”, – EIMIN Deputy Minister Karolis Žemaitis named several extremely important changes.
When a foreign business is looking in which country to invest or expand its activities, the final decision is determined by more than one factor – the country’s convenient geographical location, technological and physical infrastructure, favorable cultural and social conditions, administrative burden or tax regulation are no less important. In the last four years, according to the vice-minister, Lithuania has made significant progress in the following areas: “Effective and proportionate regulation is very closely related to the country’s competitiveness and economic growth. In four years, the administrative burden on business decreased by 30 million. euros, but we must continue to move in this direction.”
What else makes Lithuania attractive?
According to Elijaus Čivilis, head of the foreign investment development agency “Invest in Lithuania”, the main advantages of Lithuania in the eyes of investors remain educated workers and a relatively favorable regulatory and tax environment.
“In recent years, the investment environment has been strengthened by the decisions made regarding the expansion of the Green Corridor for large-scale investments to capital-intensive investments, increasing the supply of plots for investors in free economic zones and the state land reservation model. An additional advantage may be the country’s leadership in the field of cyber security and shortened procedures for defense industry investments important to national security.
However, the success stories of both Rheinmetall and other investments show that Lithuania can hope to win only if state institutions give a high priority to attracting foreign direct investment. Attention to investors’ needs, decisive decisions to improve the investment environment, an aggressive investment attraction policy can outweigh the investors’ decision in favor of Lithuania,” he emphasizes.
E. Čivilis points out that the competitive struggle in the Central and Eastern European region has gained new momentum and many of our competitors are rapidly improving the investment environment, so the traditional advantages of Lithuania will not be enough in the future.
“Given the new subsidy instruments approved by competitors, it is important to strengthen the competitiveness of financial incentives. Also, the development of unique advantages of the investment environment, such as Lithuania’s significantly shortened procedures for defense industry investments important to national security, is becoming an even more important factor. It is important to develop such solutions that give the country an advantage in other growing areas as well, for example in the green economy, bioeconomy and elsewhere,” notes the head of Invest in Lithuania.
Record achievements
in 2023 Lithuania managed to achieve solid results of direct foreign investments: 53 projects were approved, which are planned to create as many as 4,125 jobs and invest about 207 million euros in three years. euros to fixed assets. 25 new international companies are entering Lithuania, and 28 companies already operating in the country have approved their expansion plans.
Lithuania’s potential in fast-growing areas is also proven by the record 239 million euros attracted in the first half of this year. EUR investments in fixed assets, which were largely determined by the investment plans of the defense industry giant Rheinmetall.
It is easy to measure the benefits of direct investment for the country in numbers: in the last four years (from 2020 to 2023), 199 foreign direct investment projects were approved, which were planned to create 18,900 jobs. new jobs and invest as much as 602 million euros to fixed assets. in 2023 the average salary among “Invest in Lithuania” clients amounted to 2,955 euros gross and was 47 percent. higher than the national average, and employee productivity is 28 percent. higher than the Lithuanian average.
Thus, it is obvious that improving the conditions of the business environment in Lithuania is beneficial not only for foreign investors or local businesses, but also for the country’s residents. Multinational companies with higher productivity and wages encourage local businesses to expand, for example by investing in higher-skilled jobs and automation. In addition, new investors can provide access to advanced technologies, world-leading business practices, knowledge and innovation.
2024-09-09 07:35:35