Invest in Lithuania 2014

Country Profile

Key Highlights

  • GDP per capita - $16,600 (2014)
  • GDP growth – 3.1% (2013)
  • Labor costs 4 times lower than the EU average
  • 4-5th lowest profit tax in the EU (15%)
  • 7 Free Economic Zones (FEZ)

Introduction

Lithuania, officially the Republic of Lithuania, is the biggest country among the three Baltic countries (Estonia, Latvia and Lithuania). Its capital and largest city Vilnius is one of the largest Baltic financial centers, and the Vilnius old town was awarded by UNESCO as a World Heritage site. Lithuania is located at the southeastern shore of Baltic, and it borders Latvia, Belarus, Poland and Russia.

As one of the important European countries, Lithuania joined European Union in 2004, became a member of NATO in March 2004, and will have Euro from the beginning of 2015.

As one of the fastest growing economies in Europe, Lithuania is becoming more and more attractive to be a base for investors to do business in Europe. According to The World Bank, Lithuania was ranked as the 17th easiest of doing business and 11th easiest of starting a business (www.doingbusiness.org/rankings). Based on International Monetary Fund’s estimation, Lithuania’s GDP (PPP) of 2014 will be 70.84 billion US dollars; its GDP (PPP) per capital will be 23,850 US dollars, its nominal GDP will be 49.308 billion US dollars; its nominal GDP per capital will be 16,600 US dollars. (www.imf.org)

Geography, Population and Languages

Lithuania is located at the boundary between Northern Europe and Eastern Europe. Its total area is about 65,200 km2. Lithuania is called the land of rivers and lakes. Its inland water is about 4% of its territory, and 3 out of its 5 borders stretch along rivers and lakes. With its seasonal weather changes, the average temperature of January is -2.9oC, and 19 oC in July.

Lithuania’s population is about 3M, which consists of 84% of Lithuanians, 6.6% of Poles, 5.8% of Russians, and 3.5% of others. The official language is Lithuanian, and a great number of people speak Russian and English.

Business Etiquette

Communication

  • Majority of the Lithuanians speak Russian and English
  • Meetings are arranged in advance and confirmed by a telephone call or e-mail. The agenda of the meeting is also arranged in advance
  • There is a tradition of exchanging business cards during the first meeting.
  • Lithuanians are punctual. A phone call will be made if, due to some special reasons, the visiting will be delayed

Decision-making

The planning process takes most of the time, while the project will run immediately after the planning process.

Appearance

Business dress in Lithuania is conservative. Businessman usually wears dark suits in the autumn and winter seasons, and light suits in the summer time. Businesswoman also dresses conservatively, usually in dark suits and white blouses.

Behavior

Handshakes are needed at the beginning and the end of a meeting. It is recommended to look directly into the person's eyes while shaking hands. Lithuanians like to keep a larger personal space around them. The acceptable distance is the length of an outstretched arm. If attending dinner at a family residence, it is appropriate to bring a gift, such as a bottle of wine, dessert, or a bouquet of flowers for woman.

Click to download the full guide Invest in Lithuania 2014.

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Source

RAZ Group

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