“Doing business”

What is “Doing Business”?

  • The “Doing Business” report measures business environment according to the methodology and scenarios defined by the World Bank. As part of this survey the World Bank performs the analysis and ranking of the regulations that promote and restrict business in different  countries and regions.
  • The World Bank has been conducting the “Doing Business” report since 2002 and publishing its reports since 2003. The report covers the period running every year from 1 May to 1 May of the following year (except for the tax payment indicator the assessment of which covers a calendar year period).
  • Results of the World Bank’s report are based on information provided by national experts (respondents) to the World Bank. The World Bank cooperates directly with respondents by asking them to answer special questionnaires of the World Bank.
  • Business environment in the Report on “Doing Business” is measured according to 11 indicators:
    • Starting a business
    • Dealing with construction permits
    • Getting electricity
    • Registering property
    • Getting credit
    • Protecting minority investors
    • Paying taxes
    • Trading across borders
    • Enforcing contracts
    •  Resolving insolvency
    • Labor Market Regulation *
(*The indicator has no impact on the overall result of the country) 

Lithuania in the ranking of “Doing Business”

  • The last report published in October 2018 covered 190 economies. In terms of the ease of doing business, New Zealand (ranks the first) and Singapore (ranks the second) has maintained their positions likewise last year, whereas Denmark (ranks the third) has risen in three positions since last year. Lithuanian ranks 14 in the Report. From among 28 Member States of the EU Lithuania occupies the fourth position.

  • According to this year’s index, Lithuania is one of the TOP 10 countries when it comes to Registering Property, Enforcing Contracts and Dealing with Construction Permits. The largest strides taken by Lithuania were in these categories: Getting Electricity (33rd to 26th place), Dealing with Construction Permits (12th to 7th place), and Protecting Minority Investors (43rd to 38th place).

  • Reforms implemented during the reference period that have positively contributed to Lithuania’s ranking:

  • Lithuania made paying taxes easier by merging the filing and payment of two labor contributions and issuing pre-populated value added tax returns. The government of Lithuania adopted the Law on 'Long-term Work Benefits and Guarantees for Employees in the Event of Insolvency of the Employer' in December 2016 and with effect from January 1, 2017. According to the new law, contributions to the Guarantee Fund and contributions to the state social insurance are filed and paid jointly. As of June 1, 2017, the Lithuanian Tax Authority started providing VAT users with a prepared preliminary VAT return (form FR0600). This return is generated based on VAT invoices provided in the i.SAF registry. This has facilitated VAT return compliance. The council of Vilnius updated the rate for the land tax set in 2017. Effective from January 1, 2017, the rate for the land tax was decreased from 0.4% to 0.12%.

  • Lithuania strengthened minority investor protections by introducing greater requirements for the disclosure of the compensation of directors and other high-ranking officers on an individual basis. On November 21, 2017, Lithuania amended the Law on Financial Reporting by Undertakings by adopting the Law on the Financial Reporting of Enterprises No. XIII-785. The amendments came into effect on November 29, 2017 and are highly relevant for the Protecting Minority Investors indicator as they directly address the extent of corporate transparency to the public. Specifically, listed companies are required to disclose information on the remuneration of each member of the management and supervisory body. The required information includes (i) average salaries, (ii) bonuses, and (iii) other payments paid during the reporting period.

  • Lithuania made exporting easier by enhancing its automated customs data management system: In September 2017, Lithuania enhanced its automated customs data management system – i.e. the Customs Clearance Processing System (MDAS). The enhanced platform allows the electronic submission and automatic clearance of export declarations. Exporters no longer need to visit customs officers to validate their declarations for the clearance process. As a result, the time required for exports customs clearance and border compliance has decreased.

Role of the Ministry of Economy and Innovation

  • The Ministry of Economy and Innovation is a coordinator of the “Doing Business” report in Lithuania.
  • The Report on “Doing Business” is an excellent means for identifying barriers faced by business in carrying out its activities, for comparing Lithuania in different areas with as many as 190 economies and, in may cases, for identifying the particular measures the implementation of which would allow Lithuania not only to achieve better results in “Doing Business” report, but also – and this is most important – to improve the business environment.
  • In view of the above, the Ministry of Economy and Innovation analyses the results and methodology of Reports on “Doing Business”, cooperates with public authorities and business entities in developing proposals and measures that might positively contribute to the data of the Report.

Useful links

Last updated: 02-04-2019