Country Report: Lithuania

Chirita Tatiana
EMREI-145
I. General Overview
 Endowment with
different resources
Lithuania has four main natural resources:
Gravel
Sand
Clay
Limestone

Lithuania lacks in one main natural resource:

Oil

Lithuania dabbles in three natural resources:

Mineral water
Dolomite (main cement ingredient)
Iron
 GDP, GDP per capita, GDP growth rate
The Gross Domestic Product (GDP) in Lithuania was worth 41.17 billion US dollars
in 2015. The GDP value of Lithuania represents 0.07 percent of the world economy.
GDP in Lithuania averaged 23.57 USD Billion from 1990 until 2015, reaching an all
time high of 48.35 USD Billion in 2014 and a record low of 7 USD Billion in 1994.
 GDP per capita
The Gross Domestic Product per capita in Lithuania was last recorded at 15231.27 US
dollars in 2015. The GDP per Capita in Lithuania is equivalent to 121 percent of the world's
average. GDP per capita in Lithuania averaged 10210.24 USD from 1995 until 2015,
reaching an all time high of 15231.27 USD in 2015 and a record low of 5324.15 USD in
1995.
 GDP growth rate
The Lithuanian economy expanded 1.3 percent quarter-on-quarter in the fourth
quarter of 2016, following an upwardly revised 0.4 percent growth in the previous
period, according to preliminary estimates. It was the strongest expansion since the
third quarter of 2013 mainly driven by wholesale and retail trade, repair of motor
vehicles and motorcycles; transportation and storage; accommodation and catering
services and agriculture. On a yearly basis, the GDP advanced 3 percent compared
with a 1.7 expansion in the third quarter. For the whole 2016, the economy
expanded 2.3 percent. GDP Growth Rate in Lithuania averaged 1.04 percent from
1995 until 2016, reaching an all time high of 4.20 percent in the first quarter of
2003 and a record low of -13.10 percent in the first quarter of 2009.
GDP composition by sector - Value added as
% of GDP of agriculture, industry, services
Inflation rate
Lithuanias consumer prices increased 2.3 percent year-on-year in January of 2017, following a 1.7
percent rise in the prior month. It was the highest inflation rate since January of 2013, driven by higher
cost of transport (6.7 percent vs 3.1 percent in December), miscellaneous goods and services (2.7
percent vs 2.2 percent) and restaurants and hotels (7 percent vs 6.2 percent). Additional upward
pressure came from food and non-alcoholic beverages (3.6 percent vs 3.7 percent), alcoholic beverages
and tobacco (3.6 percent vs 3.8 percent), recreation and culture (0.9 percent vs 1.1 percent) and health
(1.5 percent vs 1.7 percent). Meantime, prices fell less for housing and utilities (-2.6 percent vs -2.9
percent) and clothing and footwear (-0.3 percent vs -0.5 percent). On a monthly basis, consumer prices
went up 0.3 percent after a 0.4 percent rise in December. Inflation Rate in Lithuania averaged 18.64
percent from 1993 until 2017, reaching an all time high of 707.40 percent in June of 1993 and a record
low of -2 percent in January of 2003.
 Unemployment rate
Unemployment Rate in Lithuania increased to 8.70 percent in January from 8.50 percent in December of 2016.
Unemployment Rate in Lithuania averaged 8.49 percent from 1995 until 2017, reaching an all time high of
15.30 percent in July of 2010 and a record low of 2.70 percent in June of 2007.
 EXTERNAL DEBT

Lithuania's External Debt reached 36.2 USD bn in

Sep 2016, compared with 35.5 USD bn in the
previous quarter. The data reached an all-time high
of 36.2 USD bn in Jun 2008 and a record low of 2.4
USD bn in Dec 1996.
DOING BUSINESS IN LITHUANIA
N Procedure Time to Associat
o. complete ed Costs
1 Open bank account and deposit minimum 1 day 0

capital requirement
Agency:Commercial Bank
Some banks apply charges for issuing a bank certificate, which evidences
payment of share capital.

An agreement between Centre of Registers and DNB bank on the pilot

project to create internet service for opening of the account online was
signed in mid 2011. Service (free of charge) in DNB bank started on 29th
November 2011.

2 Obtain a confirmed electronic signature 1 day 0.5-31.6

Agency:Centre of Registers, Mobile operator
euro
In order to check and reserve company name online as well as register employees
with SODRA, a company must have electronic signature.

Electronic signature in USB form costs about EUR 44,00 plus about EUR 7.00 annual
fee. Almost all Mobile operators provide electronic key for symbolical price in amount
of EUR 0,50 plus monthly fee in amount of EUR 0.30 0.50 .

At this moment in Lithuania are three types of electronic signatures.

1) Electronic signature issued by state Centre of Registers. Costs 43.33 EUR.

Certificate of electronic signature is valid for 2 years. After 2 years certificate must
be updated. Costs 8.23 EUR.

2) Electronic signature issued by mobile operators. Costs depends on mobile

operator and range from 0.29 EUR to 4.34 EUR.

3) Electronic signature issued by Migration Board with the personal identity card.
Electronic signature does not cost anything but costs of personal identity card range
from 8.6 EUR to 31.6 EUR.
 DOING BUSINESS(CONT.)
N Procedure Time to Associat
o. complete ed Costs
3 Check and reserve the name of the company (limited Less than one EUR 16.22
day (online
liability company) procedure)
Agency:Register of Legal Entities
Reservation of the new company name is compulsory for online registration of
business. Checking of the name is free of charge, and reservation costs EUR 16.22.
As of May 2013, the changes of the Regulations of the Register of legal persons came
into effect. Now the State Commission of the Lithuanian Language must check every
new company name and give its consent on the use of a particular name.

Lithuanian Government amended the Articles of the Register of Legal Entities, and
entrenched the mandatory consultation with the Inspectorate of National Language
whether the company name corresponds to the requirements of the Lithuanian
language. Currently the names of the companies must meet the requirements of
formation of Lithuanian words, therefore sometimes it is not possible to use foreign
words.

4 Register at the Company Register, including registration 3 days EUR 51

with State Tax Inspectorate (the Lithuanian Revenue
Authority) for corporate tax, VAT, and State Social
Insurance Fund Board (SODRA)
Agency:Registrer of Legal Entities
According to Article 35 and 36 of the Regulations of the Register of Legal
Entities, before the application for registration of a company is submitted to the
Register of Legal Entities, notary public must verify the correctness of the
particulars entered into the application, the compliance of the statutes with the
statutory requirements and the fact that the company is eligible for registration.
Article 36-1 of the Regulations provides a possibility to submit the documents
electronically directly to the Register of Legal Entities, without verification of a
notary (certain conditions apply, such as using only standard forms of
incorporation documents, using electronic signatures, etc.). The following
documents must be submitted when incorporating a small partnership:
 Lithuania Listed 20th out of 189 Economies in the World Bank Doing Business
2016 Ranking

According to the World Bank report Doing Business 2016,

Lithuania has risen four positions in the past year and is now
ranked 20th out of 189 countries, and it is 8th among European
Union countries.
Furthermore, Lithuania remains one of the most favorably
assessed countries in terms of property registration and execution
of contracts. In its report Doing Business 2016 the World Bank
states that Lithuania is considered to be one of the most advanced
countries in terms of having a very high quality land administration
system. Property registration and transfer from one company to
another is comparatively simple, fast and cheap in Lithuania.
Having improved the procedure of property registration and
simplified the procedure of contract execution, Lithuania managed
to climb to second position in terms of property registration and to
third place in terms of the contract execution indicators.
 International organization
membership
Australia Group
Baltic Assembly(BA)
Bank for International Settlements(BIS)
Council of Europe(CE)
Council of the Baltic Sea States(CBSS)
Euro-Atlantic Partnership Council(EAPC)
European Bank for Reconstruction and Development
(EBRD)
European Investment Bank(EIB)
European Union(EU)
Food and Agriculture Organization(FAO)
International Atomic Energy Agency(IAEA)
International Bank for Reconstruction and Developmen
t
(IBRD)
International Chamber of Commerce(ICC)
International Civil Aviation Organization(ICAO)
International Criminal Court(ICCt)
Interpol
International Development Association(IDA)
International Federation of Red Cross and Red Crescent World Customs Organization(WCO)
Societies
(IFRCS)
International Finance Corporation(IFC)
International Labour Organization(ILO)
International Maritime Organization(IMO)
International Monetary Fund(IMF)
International Olympic Committee(IOC)
International Organization for Migration(IOM)
International Organization for Standardization(ISO)
International Red Cross and Red Crescent Movement
Source: http://www.indexmundi.com/germany/international_organization_participation.html
(ICRM)
International Trade Union Confederation(ITUC)
Inter-Parliamentary Union(IPU)
Multilateral Investment Guarantee Agency(MIGA)
Nordic Investment Bank(NIB)
NATO
Nuclear Suppliers Group(NSG)
Organisation internationale de la Francophonie(OIF) (observer)
Organization for Security and Co-operation in Europe(OSCE)
Organisation for the Prohibition of Chemical Weapons(OPCW)
Permanent Court of Arbitration(PCA)
Schengen Agreement
United Nations (UN)
United Nations Conference on Trade and Development
(UNCTAD)
UNESCO
United Nations Industrial Development Organization(UNIDO)
United Nations Observer Mission in Georgia(UNOMIG)
Universal Postal Union(UPU)
Western European Union(WEU) (associate partner)
World Confederation of Labour(WCL)
World Federation of Trade Unions(WFTU)
World Health Organization(WHO)
World Intellectual Property Organization(WIPO)
World Meteorological Organization(WMO)
World Tourism Organization(UNWTO)
World Trade Organization(WTO)
II. Description of the
population.
International
migration
Population Statistics
Life expectancy. Literacy rate;

Literacy rate:
Lithuania Average Monthly
Wages
Wages in Lithuania increased to 793.30 EUR/Month in the third
quarter of 2016 from 771.90 EUR/Month in the second quarter of
2016. Wages in Lithuania averaged 526.15 EUR/Month from 2000 until
2016, reaching an all time high of 793.30 EUR/Month in the third
quarter of 2016 and a record low of 297.90 EUR/Month in the first
quarter of 2000.
 Human development index

Lithuania ranks as #37 in the UN Human Development

Index (HDI) list and has firmly established herself in the
very high human development category
 Migration
Lithuania is de facto a country of emigration. Lithuanias emigration rate is among
the highest in the European Union. Since independence in 1990 around 825 thousand
people or almost one third of the population has left the country. Although emigration
in itself is not a negative phenomenon, Lithuania faces great challenges due to the
high rates of emigration: the age composition of the society changes (the population
is ageing), labour and skills shortages emerge, as well as the brain drain (emigrants
work in low-skilled occupations while abroad).
In 2015, the emigration rate increased again while the immigration rate decreased:
45.5 thousand persons left Lithuania, and around 22.1 thousand persons arrived.
However, in 2015, 2 times more people emigrated than immigrated.
 Migration policies
The Economic Migration Regulation Strategy (25.04.2007 No. 416), which was adopted
on 25.04.2007, could be considered the response to demographic challenges caused
by emigration, and outlined the long-term priorities of Lithuanian migration policy,
underlining return migration and reducing emigration. The main objectives of the
strategy were the reduction of negative migration net to zero by 2012, focusing on
processes of return migration, and the regulation of labor immigration from third
countries. With regard to the last objective, clear targets were set to apply a selective
immigration policy by defining the geographic priorities (Belarus, Moldova, Ukraine,
and South Caucasus) and, at the same time, the strategy emphasized the regulation of
immigration from non-EU countries. It should be mentioned that the Economic
Migration Regulation Strategy was formulated under conditions of rapid economic
growth and intense emigration. Many objectives that were set up in the Strategy were
relevant only for 2007 and 2008. Consequently, after 2008, when global economic
changes emerged, there was no any action plan accompanying the Strategy.
Due to the high outflow of population and labor market needs, the Government
initiated a working group to establish migration policy guidelines. Eventually, in 2014,
the Lithuanian Migration Policy Guidelines (22.01.2014 No. 79) were adopted. The
guidelines should be considered the second attempt (after the Economic Migration
Regulation Strategy) to tackle high emigration flows, migrant integration challenges,
and Lithuanian labor market needs. The aims of the Lithuanian Migration Policy
Guidelines are to establish the key objectives, principles, and direction of migration
policies in Lithuania. These actions are aimed at ensuring the management of
migration flows in line with national needs, in particular to solve the problems of
assuring long-term structural and economic requirements and to contribute to national
development on a social and economic basis.
 Remittances
Remittances in Lithuania decreased to 273.85 EUR
Million in the third quarter of 2016 from 274.58 EUR
Million in the second quarter of 2016. Remittances
in Lithuania averaged 229.78 EUR Million from 2004
until 2016, reaching an all time high of 428.27 EUR
Million in the fourth quarter of 2013 and a record
low of 75.89 EUR Million in the third quarter of 2004.
III. Participation in
international trade
 Lithuania Balance of

Trade
Lithuania trade deficit widened to EUR 238 million in December 2016 from EUR
213.7 million in the same month a year ago. Exports rose 8.4 percent to EUR
2.02 billion, led by petroleum products (25.7 percent), plastics and plastic
products (14.4 percent) and pharmaceutical products (21.8 percent). Imports
increased at a faster 8.7 percent to EUR 2.25 billion, boosted by higher
purchases of crude oil (52.2 percent) and iron and steel (88.8 percent).
Considering 2016 as whole, the trade deficit narrowed slightly to EUR 2.23 billion
from EUR 2.50 billion in 2015. Balance of Trade in Lithuania averaged -195.34
EUR Million from 1994 until 2016, reaching an all time high of 69.20 EUR Million
in August of 1994 and a record low of -597.50 EUR Million in March of 2008.
 Exports Imports
The following export product groups represent
the highest dollar value in Lithuanian global
shipments during 2016. Also shown is the
percentage share each export category
represents in terms of overall exports from
Lithuania.

Mineral fuels including oil: US$3.4 billion

(13.8% of total exports)
Machinery including computers: $2.1 billion
(8.2%)
Furniture, bedding, lighting , signs, prefab
buildings: $1.9 billion (7.7%)
Electrical machinery, equipment: $1.6
billion (6.5%)
Plastics, plastic articles: $1.5 billion (6.1%)
Vehicles : $1 billion (4.1%)
Wood: $994.6 million (4%)
Pharmaceuticals: $801.6 million (3.2%)
Fertilizers: $761.2 million (3.1%)
Cereals: $651 million (2.6%)
 Lithuania - High-technology
exports

The latest value for High-technology exports (current US$) in

Lithuania was $1,773,594,000 as of 2015. Over the past 23
years, the value for this indicator has fluctuated between
$1,900,958,000 in 2014 and $4,156,835 in 1992.
Main Trade Partners
 Trade Policy
Lithuania is highly dependent on foreign trade due to the large exporting
industrial and agricultural sectors. Therefore, as the Member of EU Council,
Lithuania is a strong supporter of EUs trade and investment policy serving
business and society, strengthening its industry and boosting growth,
competitiveness and employment within the EU. Lithuania, together with
other EU members, seeks that the rules of international trade, set in WTO
agreements, would be smoothly implemented and their review in the
negotiations would contribute to the strengthening of the multilateral trade
system.
Both the EU and all its Member States are members of the
World Trade Organization . While only the Commission negotiates on behalf
of the EU and represents the EU in most meetings (after having consulted
EU Member States in various meetings both in Brussels and Geneva), all EU
Member States are full WTO Members in their own right and can be elected
as Chairs of various WTO bodies. WTO.
Lithuania has been a member of WTO since 31 May 2001 and has held
chairmanship of the WTO Committee on Customs Valuation, Committee on
Subsidies and Countervailing Measures, Committee on Balance-of-Payments
Restrictions and Committee on Budget, Finance and Administration.
Ministry of Foreign Affairs is responsible for the coordination and
representation of Lithuanian trade policy.
IV. Participation in
international capital flows
Main Investors In Lithuania
Reasons to invest in
Lithuania
Investment policy
There has been a remarkable economic transformation in terms of
foreign investment in Lithuania. This transformation got even a major
fillip after Lithuania became a member of the European Union in the
year 2004. It was able to attract more foreign investment projects due
to its liberal foreign investment policies. The Government of Lithuania
has also set an agency to help and assist foreign investors with setting
up businesses in the country. It is also granting lots of incentives to
investors to encourage more foreign investment in the country. All
these things show that the government of Lithuania is pro-investor and
gives more importance to foreign investment. The tax policy of
Lithuania is also business friendly. This is evident from the fact that the
corporate tax of Lithuania is only 15% and its overall tax burden is also
smaller in comparison with other EU nations.
Vilnius has an anonymous swing foundation. Its a
group of people who install swings all around the
city, often changing their locations.
 The country even has its own aroma, called the
Scent of Lithuania, with notes of wild flowers,
ginger, raspberry, sandalwood and musk. Now you
know the scent of this nation.
 Lithuanians Are Super Aerial

Maybe the last thing youd expect of Lithuania is their love of being in the air.

Two famous Lithuanian heroes are Steponas Darius and Stasys Girnas, two pilots that
attempted a cross Atlantic flight from NYC to Kaunas, Lithuania. They made it across
the ocean but crashed before reaching their destination.
Vilnius is the only capital in the world that you can fly a hot air balloon over. I suppose
that makes sense, since Lithuania is also #1 for the highest number of
hot air balloons per person.
Aerobatic flying is another Lithuanian specialty; Jurgis Kairys in particular. The world
champion even has a maneuver named after him: the Kairys Wheel.
 Interesting Lithuanian
Superstitions

Dont whistle indoors.Itsbad lucktowhistle

inside, since its believed tocall evil little devils.
Want to get married?Dont sit at a
corner.Apparently only true forunwed ladies,
sitting at thecorner of a tablemakes
youunmarriageable.
Black Bread & Salt.Combined, theyre
consideredgood luck. Visitingguestsmight
receive a small token, ornewlywedsas well
wishes for theirfuture together.