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The Ministry’s half-yearly accomplishments: from the launch of the Innovation Agency to over EUR 250 million in foreign investment

Date

2022 07 18

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Despite emerging geopolitical challenges, the Ministry of Economy and Innovation has been successful in the first half of this year in implementing its strategic objectives and in carrying out the day-to-day tasks that matter to business. In the first half of the year, the Ministry focused on the establishment and launch of the Innovation Agency, the implementation of major investment projects and better protection of state data. In addition, other priority work was actively pursued, such as the reform of data opening, improving measures to protect tourists and strengthening the representation of Lithuania’s economic interests in the world.   

In the first half of this year, 15 new foreign investors have entered the Lithuanian market, with 16 more promising expansion. It is estimated that this will create more than 3,000 jobs. The amount of foreign direct investment attracted by the state in the first half of this year amounted to EUR 252.2 million, and EUR 128 million of investment was attracted in the first half of this year under the Green Corridor initiative alone, which makes launching and implementing large investment projects quicker and easier.

“Business, which had barely begun to recover from the constraints of the pandemic, was hit hard again at the end of February when Russia attacked Ukraine. This is why, without delaying our ongoing strategic tasks, we have moved swiftly to develop support measures for businesses affected by Russia and China. We also managed to implement our operational tasks and to maintain Lithuania’s strategic image as a reliable business partner: membership in NATO and the European Union, a well-developed infrastructure, and a favourable business environment have enabled us to attract new foreign investment and further develop local businesses,” said Aušrinė Armonaitė, Minister of Economy and Innovation.

A. Armonaitė identifies the launch of the Innovation Agency as one of the most important achievements – the Agency, which started its work in April, is responsible for Lithuania’s innovation ecosystem and for fostering innovation at all stages of business development, from developing ideas to delivering products to end users. The Agency will administer a range of business support measures whose total value will exceed EUR 500 million over the next few years, employ more than 300 staff and have regional offices in 13 Lithuanian cities.

The Innovation Agency was established on the basis of Public Body Versli Lietuva and Lietuvos verslo paramos agentūra (LVPA), consolidating the functions of innovation activities previously performed by the Agency for Science, Innovation and Technology (ASIT).

A. Armonaitė points out that the Ministry’s specialists have developed a number of legal initiatives that allow improving the business and investment climate in the country and increasing data security.

In May, the Seimas approved amendments to the Law on Management of State Information Resources, initiated by the Ministry, which will open up the possibility to store selected state data not only in public data centres, but also in private data centres in Lithuania, in data centres in the EU, NATO or the European Economic Area.

“These safeguards will help protect against cyber-attacks or other threats. The amendments to the law allow for a ‘digital embassy’ to be operational from July this year, while private data centres and cloud storage will be available from the beginning of 2023,” says A. Armonaitė.

Also in May, the Seimas approved amendments to the Law on Employment, which provide for compensation for relocation of highly qualified workers and for recruitment costs.

The Seimas approved the Ministry’s proposal to exclude companies from countries hostile to our country, such as Russia or Belarus, from public procurement tenders announced in Lithuania. This is a very important step to ensure that procurers have as much discretion as possible to terminate contracts or reject bids. 

The Law on Companies will also be submitted to the Seimas for consideration, which will substantially improve the conditions for growing companies to attract investment, encourage the use of digital tools in decision-making and ensure that shareholders, especially small shareholders, can exercise their rights. The amendments have already been approved by the Government.

The Government has approved amendments to the Law on Tourism prepared by the Ministry, which further strengthen the protection of tourists against missed trips and improve conditions for small tour operators. The amendments still need to be approved by the Seimas. In addition, two aid measures have been implemented to help tourism businesses affected by the pandemic: compensation for accommodation providers and subsidies for inbound tourism tour operators.

“To help businesses affected by China’s hostile actions and the war in Ukraine, we have put in place additional measures available to companies. These include soft loans for working capital and investment projects, for product certification and for finding new markets, as well as the individual guarantee facility for working capital and investment loans and leasing transactions,” says A. Armonaitė. 

The Minister emphasises that Lithuania is the first EU country to have developed and agreed with the European Commission on a completely new financial instrument scheme “Direct loans to businesses affected by the actions of third parties”. 

“It is important to note that it may not only be relevant for Lithuanian business, which has already suffered from China because of our country’s principled stance towards Taiwan, but other EU countries that may face economic pressure in the future will also be able to take advantage of this scheme,” explains the Minister. Under the scheme, businesses can receive loans of up to EUR 5 million and groups of companies can receive up to EUR 10 million. A total of EUR 130 million is planned to be allocated for this purpose.  

The changes to the Startuok loan facility initiated by the Ministry allow Ukrainian citizens and businesses wishing to start up in our country to obtain one-third lower interest rates for business start-ups or working capital. The facility offers a loan of up to EUR 3 million for a term of up to 10 years and a loan of up to EUR 200,000 for working capital for a term of up to 3 years. 

Effective representation of the country’s economic interests in the world remains one of the Ministry’s priorities, which is why the network of commercial attachés is being expanded. This semester, tenders were launched for the position of commercial attaché of the Republic of Lithuania to Poland, Japan, South Korea, the USA, and Germany.  

The new attachés will significantly strengthen Lithuania’s economic representation globally and in the strategically important markets of the US and Germany, where three commercial attachés will be based. The Ministry is also looking for a commercial representative at the Trade Mission of the Republic of Lithuania in Taipei.  

An expanded network of economic representation will help Lithuania to be more visible in the world and more attractive to investors, and to work together with business representatives to achieve the common goal of a strong economy.    

The Ministry of Economy and Innovation aims to ensure that increasing foreign investment and a business-friendly environment, high-tech industry as well as research and innovation grow the country’s economy, which can create more jobs and offer competitive pay.