09-04-2024

A. Armonaitė submits a package of laws to the Seimas to facilitate conditions for defence production in Lithuania

On Tuesday, Minister of the Economy and Innovation Aušrinė Armonaitė will submit to the Seimas for consideration amendments to laws facilitating the development of large-scale projects. These would ensure the immediate needs of national security and defence. Once adopted, these amendments will allow potential investors such as Rheinmetall and other Lithuanian and foreign manufacturers to benefit from the provisions. 

"We are initiating very important changes to ensure that Lithuania will be able to attract significant defence and security investments quickly. We are competing with the rest of the world and, as part of the region, we need to do even more to make Lithuania's procedures the fastest and its bureaucratic institutions the friendliest to potential investors. I hope that the first project to become a success story of this regulation will be the Rheinmetall ammunition plant. We are currently working hard on this," said Aušrinė Armonaitė, Minister of the Economy and Innovation.

The amendments will simplify the procedures for spatial planning, zoning and construction for large projects aimed at meeting urgent national security and defence needs. This would allow such defence industries to start operations in Lithuania in the shortest possible time.

According to the current regulation, the preliminary period during which the necessary preparatory processes for a large-scale production project to meet urgent national security and defence needs could be carried out in Lithuania before the start of construction of production facilities is approximately 2-2.5 years. 

"In order to ensure Lithuania's security, the country's necessary defence capabilities and the provision of support to Ukraine, the current timeframe is far too long. The amendments would reduce the timeframe to an estimated six months. This would help to ensure security, improve the business environment and promote business development by allowing faster implementation of high value-added projects," said Karolis Žemaitis, Deputy Minister of the Economy and Innovation. 
   
The regulation would apply to all major projects that meet the requirements of the law and are recognised by a government decision as meeting the immediate needs of national security and defence. According to the Investment Law, one of the mandatory conditions for a major project is an investment in Lithuania of at least €20 million (€30 million in the case of investments in Vilnius). 
  
Until now, Lithuania has purchased most of its weapons on international markets, avoiding dependence on foreign suppliers. In order for the Lithuanian Armed Forces to have uninterrupted access to the necessary arms and ammunition for the needs of the state, it is necessary to ensure that the essential needs of the state are met by companies operating on the territory of Lithuania. 

The initiative for large investment projects, also known as Green Corridor projects, developed by the Ministry of Economy and Innovation and to be launched in 2021, will make it much easier and faster to set up a business, while at the same time granting the status of a project of national importance and a 0% corporate tax rate for up to 20 years.  

New requirements for large projects will also come into force on 1 July, requiring a large company to create between 20 and 149 new jobs, and between 20 and 199 new jobs in the case of an investment in Vilnius, and ensuring that the wage of the 20 new jobs created by the investment project is at least 1.25 times the average wage in the municipality where the investment is located. 

The amendments to the law were drafted in cooperation with the Ministry of National Defence, the Ministry of Environment and the Government Chancellery.