www.investlithuania.com

Investment in Lithuania:

Environment and support

April 15, 2011

“If Lithuania continues successfully, it has

a good chance of grabbing the best

investments in the region and the best

talents with it.”

Kitty Kubo, Head of Foresight Division of

Estonian Development Fund, adviser to

Estonian Government

350 jobs

150 jobs

20-50 jobs

FDI projects in 2010

600 jobs

50 jobs

70 jobs

110 jobs

Northern Europe Innovation Centre

Time

Value

Present situation

Low

High

2008-2010 economic

recession

Northern Europe Service Hub

Focus on priority

sectors

Focus on innovation

development

2015

2020

Stable platform for high value added

economy development

20112010

Market strategy

Market power

• 2011: 14th best outsourcing

destination (7 spots up) (A.T.Kearney Global Services

Location Index 2011)

• 2012: 1/3 of FDI in Lithuania

will settle down in the service

sector

• 2015: share of exports of

services will make 1/2 of

Lithuania’s total exports

Focus on priority sectors

Services • business services

• R&D

• logistics

• medical services

Clusterized higher value added traditional industry • engineering

• chemicals

• plastics

• food

High-tech• life sciences

• clean-tech

• ICT

• future energy

R&D• R&D centres

• science and business valleys

• integrated international clusters

Focus on innovation

Europe’s prime location

• Crossroads of North, East and West

• 3 Pan-European transport corridors

• 4 modern international airports

• Northernmost ice-free seaport on the

eastern shore of the Baltic Sea

• Regionally best network of

roads and highways

• 3 strategic multimodal logistic

centres under development

EU -340 million

BSR -110 million

CIS -250 million

• 40 % of the 25 - 34 year olds have

higher education

• 30 % of overall population with

higher education compared to the

EU average (24%)

• 46 higher education institutions:

200,000 students and 40,000

graduates annually

• ~90 % of Lithuanians speak at

least one foreign language

Talent pool of 3 million

Leading ICT and Internet capacities

Sources: www.speedtest.net; Study by University of Oxford (England) and University of

Oviedo (Spain), 2009; GSM European Coverage report; European Commission, 2009

• Global leadership in mobile e-signature

• World’s 2nd fastest Internet

• World’s 6th and Europe‘s No. 1 fiber

broadband penetration (23 %)

• Europe’s highest fiber optic density

• EU‘s greatest GSM penetration (147 %)

• World’s No. 1 in the number of mobile

telephone subscribers per 100

population

• Europe’s densest network of public

Internet access points

8.048.849.339.429.459.95

10.1810.88

13.4615.02

21.06

0 5 10 15 20 25

Sweden

Bulgaria

Japan

Andorra

Moldova

Iceland

Romania

Aland Islands

Latvia

LITHUANIA

South Korea

World’s fastest upload Internet in 2011, Mb/s

119%

126%

126%

129%

132%

134%

142%

146%

147%

0% 50% 100% 150% 200%

Ireland

UK

Denmark

Netherlands

Germany

Austria

Luxembourg

Italy

Lithuania

EU’s highest mobile penetration

• INVEST LT+

• Tax incentives for investments into new

technologies and R&D

• Tax holidays in 2 free economic zones

Financial support for FDIs

INVEST LT+ program grants to

cover expenses of FDIs in

Lithuania

MAX POSSIBLE SUPPORT up to EUR 3.5 million

up to EUR 1.5 million up to EUR 2 million

Financial support available per FDI project in the field of

services, R&D or manufacturing

Construction, Infrastructure, Special personnel training and

Salary costs

General personnel training costs

MANUFACT

URING

PROJECT

20-30 % of the total investment

into assets;

SERVICES

PROJECT

10-15 % of the gross salaries

paid during 24-month period for

each full-time position within 3

years;

R&D

PROJECT

20-30 % of the gross salaries

paid during 24-month period for

each full-time position within 3

years / or of the total investment

into assets.

INVEST LT+

average support

Incentives for new

technologies and R&D

• Scientific research and experimental development (R&D) costs

deducted 3 times from income for the tax period during which they

were incurred, if the performed R&D works are related to the usual or

intended activities of the entity that generate or will generate income or

economic benefit

• Super-accelerated depreciation - acquisition price of fixed assets

used in the R&D activities can be written-off within two years

• Investments into substantial technological improvements will entitle

the companies to reduce the taxable profit down by 50 %

• 0 % corporate tax

during the first 6 years

and only 50 % of

corporate tax over the

next 10 years

• 0 % tax on dividends

• 0 % real estate tax

Tax incentives in 2 FEZes

• Santara Valley (Vilnius)ICT & Life Sciences CentreCentre of Innovative MedicineNature Research Centre

• Sunrise Valley (Vilnius)Centre of Physical and Technological Sciences

• Santaka Valley (Kaunas)National Open-access Centre of R&DCentre of Sustainable Pharmacy and HealthTechnologiesNational Open-access Centre of Future Energy

• Nemunas Valley (Kaunas)Centre of Agriculture and Forest Sciences

• Maritime Valley (Klaipėda)National Centre of Marine Sciences andTechnologies

Network of 5 valleys

Working answers for FDIs

www.investlithuania.com