Licensing

Licensing is one of the most restrictive measures for regulating economic activities. It can often be replaced by less restrictive measures, such as business supervision.

Legislation governing licensing:

• Civil Code of the Republic of Lithuania, articles 2.77-2.79
• Public Administration Law of the Republic of Lithuania, article 2 point 7, article 29
• Law on Services of the Republic of Lithuania
• Description of the Licensing Framework, approved by Resolution No. 937 of the Government of the Republic of Lithuania of July 18, 2012 "On Approval of the Description of the Licensing Framework and the Provisions of the Licensing Information System"

Interpretations of the Constitutional Court:

1. Freedom of economic activity is not absolute (inter alia, the Decisions of 13 May 2005, 6 January 2011, 9 May 2014 and 30 May 2017); restrictions on economic activity imposed by statutes must comply with the imperative laid down in Article 46(3) of the Constitution that the State shall regulate economic activity in such a way that it serves the common good of the nation (inter alia, the Decisions of 15 January 2015, 5 March 2015 and 30 May 2017).
2. Individual rights and freedoms, as well as freedom of economic activity, can be restricted only by law and only under certain conditions (inter alia, the Decisions of 21 June 2011, 9 May 2014 and 30 May 2017).
3. Essential conditions of economic activity can only be established by law (e.g. Case No. 42/03 of 31 May 2006).
4. The Seimas of the Republic of Lithuania cannot instruct the Government of the Republic of Lithuania or other institutions to regulate, by sub-statutory acts, those social relations that, according to the Constitution, must be regulated by laws (inter alia Decisions of December 13, 2004, September 28, 2011, and September 29, 2015).

Relevant information
The Ministry of Economy and Innovation of the Republic of Lithuania identified issues in the current legal framework governing business supervision and licensing, noting inconsistencies and lack of clarity as the main problems faced by public administration entities in the application and preparation of special legal acts. To address these problems, the Ministry conducted a comprehensive impact assessment, consulting with the Advisory Council for Better Regulation, composed of experienced experts. The Council suggested expanding the application of the concept of license and the foundations (basic principles) of licensing. In order to make a decision on the most appropriate alternative of the proposed legal regulation, public consultations were held to gather feedback and proposals of public administration entities, resulting in a detailed report consultations and a larger impact assessment of draft legislation. Additionally, the Ministry conducted a feasibility study on the possibilities of modernizing and standardizing the licensing process. Annexes to the feasibility study: GS budget, List of licensing systems, Analysis of license survey, LIS statistics analysis.