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Minister of Economy Evaldas Gustas: Lithuania attracted a record number of investors last year

Date

2016 01 20

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2015 was a record breaking year for the foreign investment development agency Invest Lithuania, which is subordinate to the Ministry of Economy, throughout the entire period of its activity — last year foreign companies decided to implement 31 investment projects in Lithuania. This will create more than 2600 jobs Over the next three years.

According to the Minister of Economy Evaldas Gustas, based on conservative estimates of analysts form PE Invest Lithuania, the projects attracted last year will generate more than EUR 150 million of financial benefit in the form of taxes in the period of eight years; direct economic benefits, which means the created value added, should make more than half a billion euros. The direct financial benefit alone outweighs the funds aimed to attract projects by dozens of times; nearly as much of financial and economic benefit is expected to be derived as a result of the multiplicator effect. 

Compared to 2014, which until now was considered a record year, the number of projects implemented by foreign companies last year in Lithuania was more than a fifth higher in number and the number of jobs planned to be created increased by 50%. The nearly fivefold jump up in the total capital investment (CAPEX) made from EUR 29.96 million in 2014 to EUR 143,98 million in 2015.

According to the Minister of Economy Evaldas Gustas, the last year’s results are the best in the history of the agency and Lithuania in general. Consistent focus on creating favourable business environment and ‘targeting’ investors bring very good results. The analyses suggest that Lithuania already stands out in the region with its strong services centres, games industry and information technology clusters. Last year, the investments in production grew considerably, which helps generate value added and create new jobs in the regions of Lithuania which are weaker in economic terms; this adds to addressing the problems of both unemployment and Lithuania’s attractiveness to foreign investors. It should be noted that this year, the Ministry of Economy has set the target for public body Invest Lithuania to even increase the investment into the manufacturing sector in the regions. 

The Minister of Economy said at the press conference that operational activities of public body Invest Lithuania, like search of investors in new markets and region-oriented new investments, provide good results. Nasdaq, Uber, AIG, Intermedix, Teleperformance, Revel Systems and many other global companies have chosen Lithuania as the place to grow and develop their businesses. 

Foreign investors who established, opened their subsidiaries or planned their development projects in Lithuania last year, have plans to create the biggest number of jobs in service centers (it could make the total of 1515 jobs in service, maintenance and client service centers) and the manufacturing sector (about 610 jobs).
 
According to the Managing Director of Invest Lithuania Mantas Katinas, Denmark is leading the way as an investor in Lithuania, with Danish capital companies set to create 794 jobs in the coming three years.  The US companies whose projects will create 543 jobs and French companies which plan to create 260 new jobs are the next biggest investors. Countries which are appropriate to focus on in 2016 include Finland, Sweden, Norway, Denmark, Germany, the United Kingdom, the US, Russia, Belarus and Ukraine.

Most frequently, foreign capital companies get established and develop their activities in Vilnius. 1637 new jobs are planned to be created in Vilnius. Kaunas, in which foreign capital companies plan to create 265 jobs, ranks 2nd. Panevėžys, which ranks third, is expecting new 150 jobs.

The five year tendency shows that information technology businesses and services centers exclusively select two biggest cities – Vilnius and Kaunas. Klaipėda is expected to complement this list in the future. Investors which seek to expand production prefer the regions and avoid the capital. Vilnius therefore has received a mere 1% of all capital investments. 

‘FDI distribution demonstrates that the national economy has taken the right direction. The largest cities do not take the whole portion of investments — a considerable portion goes to the regions, which strengthens their economy. This tendency also has a social advantage, which is reduced emigration and better quality of life of the population in the regions. This year, the Ministry of Economy will work towards ensuring that amendments to the Law on Land as well as amendments which provide for a zero corporate tax tariff on reinvested profit are adopted. The Ministry of Economy’s professional requalification initiatives may already be used and, also, we seek to create proper conditions to train high quality professionals to match the needs of the labour market. The ongoing liberalisation process of the social model is of special significance for the improvement of investment environment in Lithuania,’ said the Minister of Economy. 

The largest investment in Lithuania is Neo Group’s EUR 50 million investment project in the Klaipėda Free Economic Zone.  Eternit Baltic plans to invest EUR 34 million in the construction of a new production facility. The biggest job creators are Danske Bank and Teleperformance, both based in Vilnius, and Intermedix, based in Kaunas.

This year, greater focus will be given to the highest level scientific research, innovation and technology projects which could create global innovation in Lithuania. Whilst competition to attract investors in these fields is fierce, they bring the highest value to the country.

‘Our current success is the result of having a clear focus and making the right changes. Yet, in order to even more improve the positions Lithuania must continue to regularly implement changes that enhance the country’s attractiveness as an investment location. Today, it is most important to reform the education system, to create the right infrastructure to enable innovation, and to modernise the immigration system. We are also calling for a new draft labour code and for a maximum limit on social security contributions from companies. As a small country that wants to compete globally, we must implement these changes quickly. This could be our competitive advantage over large countries,’ said the Managing Director of Invest Lithuania Mantas Katinas.

This year, Invest Lithuania is expecting to increase the results by at least 15%.