Lithuania Market Entry

Lithuania Market Entry

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

Thanks to its business and investment-friendly tax system, relatively low corruption indices and price stability, Lithuania has gained a reputation as a reliable and trustworthy partner in the international business community. According to cheeroutdoor.com, the reflection is Lithuania’s 11th place out of 190 countries in the Doing Business 2020 ranking compiled by the World Bank. This is the highest position Lithuania has ever achieved since this report began. For comparison – Estonia ranked 18th in the same rating, Latvia 18th, Finland 20th, Germany 22nd, Poland 40th and the Czech Republic 41st. For several consecutive years, Lithuania has been ranked best in property registration among all areas covered by the World Bank ( 4th place) and has a high position (7th place) in contract enforcement. Lithuania also ranked 10th in processing building permits. For the third year in a row, Lithuania maintains a stable position in the area of ​​paying taxes and cross-border trade in goods (18th and 19th positions). The most problematic area from the point of view of the World Bank assessment is insolvency proceedings for Lithuania (89th position). In Moody’s rating, Lithuania improved from A3 to A2 in 2022.

When it comes to business, Lithuanians value three key qualities that are essential – punctuality, efficiency and the importance of personal relationships. Czech entrepreneurs who want to develop their business in Lithuania should consider some useful things:

Work with local companies and seek public support. Making mutually beneficial agreements with local companies and taking advantage of the high willingness of local authorities to accept foreign investors are two fundamental pillars for achieving sustainable success in Lithuania. Look for and use official public channels that will encourage investment.

Take care of your reputation and make sure that the reputation of your business partner is impeccable. The small size of the Lithuanian market means that all participants in many specific sectors know each other well. Bad feedback and inappropriate comments can spread very quickly and destroy your business prospects. To enter the Lithuanian market, it is necessary to find a strong and reputable local partner and a good network of contacts that would help promote your product and act according to market requirements.

Invest in your brand and marketing. Even products that are widely known in the Czech Republic will not be easily sold in Lithuania if no one has heard of them. Here again, you should use a local partner who can share your advertising costs and/or help you develop a successful marketing strategy based on their experience in the target market. Sometimes product recognition may not require direct investment, but exclusivity or distribution under the already consolidated brand of your Lithuanian partner. This last option can be especially useful when marketing Czech products that are still unknown in the region.

Take advantage of Lithuania’s extraordinary development of new technologies: Lithuania is second only to Singapore in terms of Internet speed, and its capital Vilnius leads the overall ranking of data upload speeds. E-commerce with all kinds of goods and services is growing significantly in Lithuania. All this creates a very interesting platform for foreign businesses ready to benefit from the most modern communication infrastructures at a price that is sometimes up to four times lower than Western standards.

Create a strategy that allows you to cover several countries at once: in Lithuania there are all kinds of companies that not only cover the three Baltic states, but are active – either directly or through strategic partners – in Scandinavia, the Commonwealth of Independent States (CIS) and other neighboring regions. The country’s geopolitical situation, legal certainty, competitive prices and simplicity of bureaucratic procedures have made Lithuania an exceptional logistics platform for business development of all kinds both regionally and globally (exponential growth of data centers and outsourcing services).

Forms and conditions of operation on the market

The most common form of investment in Lithuania is the acquisition of shares. A minimum capital of thousand is required to establish a limited liability company. EUR. The minimum number of shareholders is 1, the maximum is 100. For a joint-stock company, the minimum capital is 25,000. EUR, the minimum number of shareholders is 1, the maximum number is not limited. For a public joint-stock company, registration with the Securities and Exchange Commission is required. In addition, it is necessary to submit the share capital, proof of the leased property where the company will be based, it is necessary to prepare a meeting of shareholders where the statutory bodies will be elected. The actual registration is carried out in the public Registration Center www.registrucentras.lt, where other relevant information can be found. The center serves for the registration of companies of natural and legal persons and also as a real estate cadastre.

After the registration of the company, before the start of the company’s activity, it is necessary to make another registration:

  • registration at the tax office (tax inspectorate: www.vmi.lt)
  • registration at the social security office ( www.sodra.lt)
  • opening a bank account
  • registration as a VAT payer (if necessary)
  • obtaining relevant licenses, if they are necessary for the company’s activities. More at Doing Business.

The company is obliged to register as a VAT payer only if the turnover of the company in the last 12 months was 45 thousand. EUR and more. Details can be obtained from the information department of the tax office ( www.vmi.lt ).

As Lithuanian law is still evolving, establishing a company without the help of a Lithuanian law firm is difficult. Basic information, or a signpost for different types and fields of business in Lithuania can be found on Versli Lietuva (Entreprise Lithuania) in the form of a Guide (Handbook for Doing Business): www.verslilietuva.lt/en/start/handbooks-for-doing-business/

Foreign companies can operate in Lithuania as a representative office (it cannot conduct business on its own account, it can represent its parent company, defend its interests, establish contacts) or as a branch office (it can engage in business activities to the extent authorized by the parent company). This is a type of activity that does not have the status of a legal entity. Other forms of activities in the country are to establish a joint venture or acquire a Lithuanian company by acquisition, or build your subsidiary company. These companies already have the status of a legal entity.

Marketing and communication

The most effective promotion is television, radio, advertising in the daily press. There is no cheap or free advertising here. The basic problem of Czech goods is low awareness resulting from bad marketing. Most companies rely on a local partner who, according to their ideas, should finance all marketing, which is often contrary to the practice of successful (usually Western) companies. Trade missions, exhibitions and participation in embassy economic diplomacy projects can be useful for acquisition. Participation in the fair without prepared meetings and targeted actions has low effectiveness. Company presentations can be organized both as part of specialized trade fairs and with the use of premises at the embassy, ​​with its support and by mutual agreement.

The largest Lithuanian PR agencies are Publicum, Berta&, Fabula Hill+Knowlton Strategies, Co:agency, Idea Prima, Integrity PR, INK Agency, Headline, Ad Verum, Maniakai, PR Servise, Nova Media, 1323 Agency, KPMS ir partneriai, Bosanova. The most visited HR portal in Lithuania is CVbankas ( https://www.cvbankas.lt/ ), to which an average of over 330,000 people log in every month. persons. The offer of advertising on the portal costs EUR 99 + VAT (1 month). CVmarket ( https://www.cvmarket.lt/ ) is the second most visited HR portal, with an average of 208,000 people logging in every month. persons. The offer of advertising on the portal costs EUR 175 + VAT (1 month). The third most visited HR portal is CVonline ( https://www.cvonline.lt/), to which an average of 140,000 people sign up every month. persons. The offer of advertising on the portal costs EUR 160 + VAT (standard services), or 240 EUR +VAT (premium services).

Daily News:

  • Verslo žinios (business newspaper) – www.vz.lt(LT)
  • Lietuvos rytas (daily newspaper with the highest circulation) – www.lrytas.lt(LT)
  • 15 min.lt – online news – www.15min.lt(LT, EN, RU)
  • DELFI – online news – http://ru.delfi.lt(LT, RU, PL)
  • ALFA – online news – www.alfa.lt(LT)
  • BALSAS – online news – www.balsas.lt(LT)
  • Economy – online news – www.ekonomika.lt(LT)

Professional journals:

  • Made in Lithuania – www.madeinlithuania.lt(EN)
  • Verslas ir Politika (business and politics) – www.verslaspolitika.lt(LT, EN)
  • Business and Exhibitions – www.businessandexhibitions.com(LT, EN)

Issues of intellectual property protection

Intellectual property is protected at the standard EU country level. There is still no significant experience with the real state of protection, with the enforcement of e.g. copyright and with real jurisdiction in this area. Institutions responsible in Lithuania for intellectual property are:

  • Ministry of Justice – coordination of industrial property protection activities
  • State Patent Office – conception of the state policy of industrial property protection, provision of industrial property rights, attestation of patent law experts
  • Lithuanian Technical Library – patent information and publishing services of the State Patent Office for issuing official decrees and patent documentation
  • Lithuanian patent attorney – representation of foreign applicants and holders of patent rights
  • Council for Competition Law – prevention of unfair competition practices
  • Court for competition law – enforcement and enforcement of competition law
  • Ministry of Culture – conception of the state policy for the protection of copyright and related rights
  • Copyright and Related Rights Board – representing copyright and related rights
  • Non-state interest administrative association – representing the rights of Lithuanian and foreign authors
  • Customs Administration (under the Ministry of Finance) – enforcement of measures to combat the import of counterfeit, counterfeit and pirated goods
  • Plant Species Research Center (under the Ministry of Agriculture) – registration and protection of plant varieties
  • Lithuanian Criminal Police – administrative and criminal measures in the fight against crime in the area of ​​property rights protection.

More information can be found at www.vpb.lt.

Public procurement market

Public contracts in Lithuania are awarded in accordance with Act No. I-1491 on the award of public contracts (Viešųjų pirkimų įstatymas, https://e-seimas.lrs.lt/portal/legalAct/lt/TAD/TAIS.30614/asr ) of 2017. According to the law, there are two types of public procurement – international and simplified. The expected value of the international order from 2021 must not exceed the value of 139 thousand. EUR for supplies of goods or services and 5 million 350 thousand EUR for the purchase of construction works. International contracts are published both in the TED database (Tenders Electronic Daily, https://ted.europa.eu ) and in the national CVP IS system ( https://pirkimai.evisiejipirkimai.lt/). Information about announced tenders is also published in the professional press and especially in the official gazette “Informaciniai pēšīcimai” (only in Lithuanian). Specific official competition conditions can be purchased directly. Tenders are also announced by individual institutions or companies and published on their websites. At www.cpva.lt, tenders of the Agency for the Coordination of Central Projects are published. The agency administers the Ignalina Nuclear Power Plant, European Union Fund Investments, Internal Security Fund, European Infrastructure Instruments, etc. programs. Simplified public contracts are considered to be contracts whose estimated value is below the threshold value of international public contracts. Simplified public contracts appear in the CVP IS system. From the point of view of law, simplified public procurement is in principle only within the purview of national law. Small-scale public contracts are simplified public contracts for which the estimated value may not exceed 58,000. EUR (without value added tax) for the supply of goods or services and 145 thousand EUR (without value added tax) for the purchase of construction works. Orders with a value of less than 10 thousand EUR, the contracting authorities do not have to publish in the central system of public contracts and so often use any form acceptable to them for their publication (own website, e-mail, fax, telephone, etc.). Often, the deadline for preparing an offer is short and unrealistic for an unprepared applicant. It is advantageous to enter the tender together with a Lithuanian partner. In principle, if the applicant did not have direct contacts with the contracting authority before the tender announcement, he has little hope of success. In exceptional cases, it is possible to award the contract without a tender procedure. Such a contract must be approved by the Viešųjų pirkimų tarnyba, which translates as the Public Procurement Officewww.vpt.lt, and then the contract must be approved by the government. It is clear from the procedure that this is rather an exceptional matter (e.g. for special forces of the army). In the case of contracts co-financed by the EU, they are published in a standard way and are thus more accessible to Czech entities.

Payment terms, payment ethics and resolution of commercial disputes

If all options for agreement have been exhausted and assuming a perfectly concluded contract, disputes can be resolved at the arbitration court of the Lithuanian Chamber of Commerce and Industry or as stipulated in a duly concluded contract. We recommend contacting the Creditreform company (www.creditreform.cz) to resolve cases of default. According to the consultation with the Vilnius branch of Creditreform, we recommend contacting the Czech branch, which solves the problems of Czechs abroad, or in Lithuania, and vice versa, if the Czech company does not pay, the Lithuanian will turn to the local Lithuanian branch of Creditreform. For large companies, the usual delivery due date is 30-60 days, payment ethics are similar to those in the Czech Republic.

Visas, fees, specific conditions for traveling to the territory

Lithuania is a member state of the EU and part of the Schengen area, so citizens of the Czech Republic do not need a visa to travel to Lithuania. A residence permit is not required for a stay of up to three months. If the stay is longer than three months, the person must secure documents confirming his right to temporarily (valid for 5 years from the decision to issue the certificate or for the expected duration of the EU citizen’s stay in Lithuania if it is shorter than 5 years) or permanently live in Lithuania. An EU citizen has the right to permanent residence in Lithuania after 5 years of continuous residence on the territory of Lithuania. After declaring a place of residence in Lithuania, an EU citizen acquires the right to social guarantees of the Republic of Lithuania, if these rights are not related to citizenship (e.g. voting). More information at www.urm.lt(Ministry of Foreign Affairs of the Republic of Lithuania) or www.migracija.lt (Migration Department of the Ministry of the Interior of the Republic of Lithuania).

Health care has a standard regime of EU countries. A Czech citizen receives free health care under the same conditions as a local citizen. It is necessary to have a European health insurance card, or form S1 (E 106) on paid health insurance. Free health care is available in state health centers and hospitals. Their list can be found on the website of the State Patient Fund www.vlk.lt. There is a co-payment for medicines, some are paid in full. Pharmacies freely sell a number of medicines that are only available by prescription in the Czech Republic. There are also private clinics in Vilnius with top equipment and a high level of service. Here, however, the patient’s participation in covering costs is higher, often 100 percent. For dental treatment, you almost always have to count on a payment that will not be compensated. There are many good quality private dental clinics in the big cities.

Employment of citizens from the Czech Republic

Citizens of the Czech Republic are subject to the regime of free movement of labor within the EU states, therefore employment of our citizens does not require a work visa or registration (as was the case before). If necessary, the commercial and economic section of the Embassy of the Czech Republic in Vilnius is ready to provide a more detailed explanation or additional clarification. As a rule, Czech citizens do not seek employment in Lithuania due to the lower level of wages. Information on employment of foreigners in Lithuania can be found here, on employment of local workers here. From 1 July 2017, the new Labor Code applies in Lithuania.

Fairs and events

In 2020-2021, no events took place due to the measures related to the COVID-19 pandemic, from 2022 their organization was resumed. We list the most important fairs below.

REMAINS

RESTA is the largest construction fair in the Baltics dedicated to all builders. Currently, RESTA is one of the most successful and longest-running fairs organized by the Lithuanian Exhibition and Congress Center LITEXPO. In recent years, around 500 companies from Lithuania and many European countries participate every year. The fair meets the highest quality requirements for international exhibitions. Statistics for 2019: 450 exhibitors from 16 countries, 44,000 visitors. Renewal of the fair 20-23 April 2022.

JSC Lithuanian Congress and Exhibition Center LITEXPO

Address: Laisvės ave. 5, LT-04215 Vilnius

Email: [email protected]

Phone: + 370 5 268 6827

Website: https://www.litexpo.lt/en/exhibitions/resta-2018

ADVENTURE

The fastest growing international tourism exhibition organized by the Lithuanian Exhibition and Congress Center LITEXPO. In five years, the number of exhibitors has increased by 91%, the number of visitors by 52% and the number of participating countries has more than doubled. Statistics for 2019: 344 exhibitors, 29,000 visitors. Renewal of the fair 28-30 January 2022.

JSC Lithuanian Congress and Exhibition Center LITEXPO

Address: Laisvės ave. 5, LT-04215 Vilnius

E-mail: [email protected]

BALT TECHNOLOGY

BALTTECHNIKA is the only and most important event of the engineering industry in Lithuania. The exhibition organized in the LITEXPO exhibition area is intended for experts, business and academic society. Key topics: industrial equipment and materials, industrial robots, electronics, automation, welding systems, surface treatment systems, metal processing equipment, energy saving, tools, piping systems, etc.

JSC Lithuanian Congress and Exhibition Center LITEXPO

Address: Laisvės ave. 5, LT-04215 Vilnius

Email: [email protected]

Phone: +370 (615) 67682

Website: https://www.litexpo.lt/en/exhibitions/balttechnika-2018-4

Lithuania Market Entry