Seimas approves EIMIN proposal to facilitate defence production in Lithuania
On Tuesday, the Seimas approved amendments to the law initiated by the Ministry of the Economy and Innovation to facilitate the development of large-scale projects. These amendments will ensure that the urgent needs of national security and defence are met.
"The initiated amendments are of great importance for the entire Lithuanian defence and security industry, as they will benefit both Lithuanian and foreign capital companies, including Rheinmetall, which is planning to set up a munitions plant in Lithuania. We are also initiating amendments to reduce restrictions on the production of defence equipment in Lithuania, thus ensuring even faster growth of the sector and meeting the security needs of our country," said the Minister of the Economy and Innovation Aušrinė Armonaitė.
The amendments simplify procedures related to spatial planning, land parceling and construction for large-scale projects aimed at meeting urgent national security and defence needs. This will allow such defence industry activities to start in Lithuania in the shortest possible time.
Previously, the indicative timeframe within which the necessary preparatory processes for a large-scale production project to meet immediate national security and defence needs could be carried out in Lithuania prior to the start of construction of production facilities was approximately 2-2.5 years. The amendments shorten this period to an estimated six months.
"In order to realise the potential of the Lithuanian defence and security industry, we had to shorten the timeframe and encourage the development of companies so that they can implement value-added projects more quickly. In this way, we are also contributing to the continued support of Ukraine," said Karolis Žemaitis, the Deputy Minister of the Economy and Innovation.
The scheme applies to all major projects that meet the requirements of the law and are recognised by a government decision as meeting urgent national security and defence needs. 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 for companies to establish themselves by giving their projects the status of projects of national importance and applying a corporate tax rate of 0% for a period of 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 to ensure 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.