How to start a business in Lithuania: new realities and opportunities for relocation

Introduction

Modern business conditions show that, despite various challenges, companies continue to have the opportunity to change their location and move to different countries. In this article, we will highlight the key aspects to consider when relocating a business to Lithuania. Yulia Tislenko, the manager of the Capital Commercial office, will discuss the nuances of documentation, finding commercial real estate, and important things to think about in advance. These recommendations will be especially useful for those looking to make the relocation process as convenient and productive as possible.

Why Lithuania?

According to experts, Lithuania remains attractive to entrepreneurs, although not for everyone. It is extremely important to be aware of the current conditions and recent changes. Until the end of February 2022, the country offered some of the most favorable conditions for both new and existing businesspeople looking to start their own ventures. Lithuania provided easy access to employment and ensured quality living conditions for both its citizens and foreign specialists. It is worth noting that many participants in services like Bolt are originally from Ukraine.

Changes in the composition of businessmen

Nevertheless, significant changes have occurred in the world, primarily affecting the citizens of the Russian Federation, Belarus, and Ukraine. Russian-speaking entrepreneurs are facing doubts about starting new companies. For example, for businessmen from Belarus and Russia, the possibility of registering their own business in Lithuania is currently under threat. Companies with ties to Russia are now burdened by sanctions, which restrict their actions and hinder the establishment of businesses in Lithuania. However, Belarusian companies still have certain opportunities that remain available at this time.

Conditions for foreign companies

As for companies from other countries, there haven't been any significant critical changes here. The conditions for doing business in Lithuania for foreign entrepreneurs have remained stable. The procedure for registering a closed joint-stock company (CJSC) in Lithuania is quite straightforward. The main requirement is the presence of a minimum share capital, which is only€2,500After that, it is necessary to submit an application to the registration center, appoint a manager, and choose an address for registering the new business. All these actions can be completed in just a few days, making the process of starting a business quite convenient.

Support for entrepreneurs

Lithuania offers its future entrepreneurs not only extensive opportunities but also the necessary support regarding business registration. Registration institutions have qualified specialists who are proficient not only in Lithuanian but also in other languages, including English and Russian. This allows for quick clarification on the necessary procedures and documents needed for a successful business launch.

Conclusion

Therefore, if you intend to move or start a business in Lithuania, you should prepare in advance and study all the details of this process. In a series of our articles, we will take a detailed look at what else is important to know and consider so that your business can successfully overcome any obstacles and start operating in its new location.

Relocating a business: current regions

The question of which regions to consider for business migration is becoming increasingly relevant. Major corporations like Microsoft, Oracle, Citco, Western Union, and DPD have long established their branches in Lithuania.

As of today, it can be confidently said that the field of information technology and its related areas are at the forefront. This sector is indeed one of the easiest and most accessible for relocation: employees of such companies often only need a comfortable workspace, a computer, and a stable internet connection. Projects can be aimed at clients from various countries, which makes the geographical location of the office less significant.

Challenges in production migration

However, when it comes to relocating production facilities, the task becomes significantly more complicated and requires substantial financial investments. Nevertheless, our experience shows that it is quite feasible to tackle such challenges. For example, we recently managed to find a suitable plot for building a factory on a "build-to-suit" basis. The location was in the suburbs, away from the city center, which, considering the transport accessibility, actually turned out to be an advantage.

The development of financial technologies in Lithuania

Since the moment large banks opened their branches in Lithuania, there has been rapid development in the fintech industry. A striking example of this is the emergence of the "Danske Campus" project, which has become a mini-city within the city. The central offices of banks like Swedbank and SEB have become a vibrant part of the urban infrastructure.

For example, SEB has rented space in the large business complex "Technopolis" to expand its capabilities. The Western Union office is also located in this business center, which has been allocated an entire building. Against this backdrop, there is a noticeable increase in the number of startups in the financial sector in Lithuania; this sector is currently at its peak of interest, and many companies are relocating their operations to Vilnius and Kaunas.

Currently, I am actively working with financial organizations from Estonia, Singapore, and Israel that are aiming to open offices in Lithuania. These startups are developing modern payment platforms for money transfers and have enormous potential, rapidly evolving.

Advantages of doing business in Lithuania

As for the real advantages that contribute to business growth in Lithuania, there are quite a few. For example:

• Tax benefitsTax incentives are provided for certain sectors of the economy in the first years of their existence.
• Free trade zonesIn our country, the concept of free trade zones has been successfully implemented, which was introduced a few years ago in seven cities in Lithuania.
• Attracting investmentsThese zones create favorable conditions for business growth and attract various investments.

The Lithuanian economy is becoming increasingly attractive to foreign investors, opening up new opportunities for companies of all sizes and sectors. The country demonstrates the ability to quickly adapt and develop dynamically, which positively impacts collaboration and the implementation of innovative ideas.

Lithuaniabecoming a true hub for startups and new technologies, emphasizing its strategically important position for business in Eastern Europe.

The concept of leasing land plots

The essence of this initiative is to provide land plots for lease for up to 99 years for the construction of production facilities, such as factories and warehouses. Companies that take advantage of this opportunity can expect significant tax benefits: for the first ten years, they are exempt from income tax, and for twenty years, they are exempt from property tax.

This program was designed to encourage businesses to leave large cities and move to smaller regions, which in turn helps attract both investments and workforce to these areas. It is worth noting that we are not talking about abandoned and remote villages, but about areas that begin just beyond the outskirts of densely populated cities.

Obtaining a residence permit

Another important aspect of this program is the opportunity to obtain a residence permit after starting a business in Lithuania. This factor has become a significant incentive for foreign entrepreneurs, allowing them to feel more confident in the country, practically on equal footing with local residents.

However, it is important to remember that Lithuania does not offer the opportunity to obtain a residence permit through real estate purchases, as is the case in several other countries. As a result, starting your own business in Lithuania can be a great opportunity to gain additional rights and freedoms in the country.

Living conditions in Lithuania

Although this initiative is not a full-fledged "breakthrough," it is impossible not to note the high standard of living in Lithuania, which meets European standards. Thanks to funding from the European Union, development is observed not only in large cities but also in small towns, which is successfully reflected in the creation of:

• developed infrastructure
• comfortable transportation system
• quality architecture
• good roads
• other necessary conditions for a quality life

Advantages of living in small towns

I would highlight as an additional advantage the life and business environment in small towns, which are not burdened by the pressures of large metropolises, yet are still able to offer a wide range of opportunities similar to those found in major urban areas.

First steps in business relocation

When it comes to the first steps in the process of relocating a business, what should companies planning to move to Lithuania take into account? First and foremost, it is essential to clearly define the timeline for the move and the current requirements for commercial spaces at the initial stage.

This is especially important, as these parameters will determine the requests for interacting with real estate agents and will help significantly narrow down the search for commercial properties.

For example, quite recently we facilitated the relocation of an IT company from Belarus, which needed to rent an office for the first six months that could accommodate 3-4 workstations.

They understand that not all employees can relocate quickly, as some may have personal reasons that prevent them from doing so. This highlights the importance of thorough planning and careful assessment of all aspects of the relocation process to minimize risks and ensure a smooth transition to the new market.

Preparation for moving

Ultimately, business owners began preparing to relocate in hopes of attracting local workers in the future. However, why didn't they start this earlier?

Challenges of opening and relocating a business to Lithuania

Opening or relocating a business to Lithuania can lead to a number of significant challenges. Before making a decision to move your company, it is important to carefully analyze the risks that may arise in the new location. One aspect that often concerns business owners is the duration of commercial lease agreements.

Long-term lease

Standard practice implies a lease term of at least three years, which can pose challenges for those uncertain about the number of workspaces needed in the future. However, there are alternatives, such as coworking spaces, that offer the option to rent a workspace for short periods, even for just one day, which is a significant advantage in an unstable economy.

The popularity of coworking spaces

Changes in the demographics of the working-age population are also leading to an increased interest in coworking spaces. These spaces have become particularly popular among freelancers and business owners who work without being tied to a specific office. After the challenging period of the pandemic, coworking spaces have started to regain their appeal, becoming the ideal solution for startups and mobile professionals.

Office furniture

Another important aspect is the availability of office furniture. Unfortunately, many landlords do not offer fully furnished spaces, which can be a significant barrier for tenants. When choosing an empty office, there is a need to purchase furniture, as well as the subsequent problem of storing unnecessary items after the move.

On the contrary, if the office is already furnished, a new headache arises from the need to adjust the existing furniture to meet the tenant's needs, which can also require significant investments.

Changes in the market

Nevertheless, the situation in the Lithuanian market is gradually changing. Many specialized companies offering furniture rental have emerged, which significantly simplifies life for many entrepreneurs. Large rental companies have also started providing furniture for rent, adding a small markup to the rental cost.

• This creates more comfortable conditions for tenants.
• Reduces the risk of additional expenses for setting up workspaces.

Thus, the market in Lithuania is becoming more adaptive to customer demands and is helping to effectively address emerging issues.

Difficulties in finding new offices

However, there are still many challenges faced by companies looking for new offices. I mentioned key aspects that highlight the need for consultations with professionals. Unforeseen difficulties can seriously complicate processes, and every delay in decision-making can result in financial losses.

By consulting with experts, businesses can avoid common mistakes and optimize their costs in the long run.

Employee migration

Additionally, the process of transferring employees from offices located in other countries, such as Belarus or Ukraine, to Lithuanian, Polish, or Georgian branches is becoming an increasingly common practice. This migration requires a targeted approach and close collaboration with professionals who can optimize all stages of relocation and provide support to the business on all matters.

Therefore, by preparing in advance for potential problems and considering that professional assistance can play a crucial role in the process of relocating a business, entrepreneurs will be able to achieve greater success in the new environment.

Company information

A representative of one of the companies decided to share information, while requesting not to disclose the name of the company in order to ensure the safety of its employees who continue to work in countries like Belarus and Ukraine.

What is the specific focus of your company and how many years have you been in this business? Why did you decide to relocate your office? Our company, which specializes in custom software development, started its operations in 2007. To date, after 15 years of work, we have opened several offices in seven countries, and the number of employees in the IT field has exceeded 900 people.

Our company has significantly strengthened the development of software creation centers in Lithuania and Poland over the past two years, so the opening of a new office in Lithuania should be seen not as a complete relocation, but rather as an opportunity to transfer some employees from Belarus and Ukraine to Lithuania, Poland, and Georgia. I am confident that Lithuania, and especially its capital Vilnius, is an excellent place for businesses that originated from Belarus or Ukraine. Historical ties, ease of communication, and a shared mentality are key points that many firms consider when deciding to move their operations to Lithuania.

Gathering information about the move

How did you gather information about the relocation process? What aspects are most important for those who are about to take such a step? For our employees working in different countries, we have developed a program that allows them to work in the offices of the countries where we are represented. We have extensive knowledge of local laws regarding documentation and labor organization for employees.

Here are some recommendations to pay attention to first:

• Changes in legislation:Pay close attention to changes in legislative acts and regulatory documents related to visas, work permits, and other aspects. These legislative initiatives can change very quickly, so it is important to stay vigilant to avoid unnecessary expenses.
• Employee communication:It is important to provide comprehensive information to employees planning to relocate about taxes and the net income they will be able to earn. Our experience shows that this information is critically important for their financial planning.
• Study of living conditions:Ask your employees to keep an eye on housing prices, utility rates, and the overall cost of living well before they make a decision to relocate. This information directly affects their quality of life, and it's best to know it in advance.
• Support from the HR team:Do not leave employees who have already arrived without adequate support from the HR team. Without proper assistance, they may find it difficult to adapt to the new environment.

When discussing business development, it is important to emphasize the significance of supporting local specialists during the relocation process, as they can play a key role in the successful adaptation of the company in a new location.

Conclusion

My thoughts on relocating a business to Lithuania highlight that while the situation has changed, opportunities still exist. Lithuania continues to be an attractive country for doing business, and despite political and economic challenges, the new realities open up horizons for companies looking to adapt and grow. I am sure our readers will find it useful to consider information on how to properly prepare documents and choose locations for commercial activities, based on the existing experiences of successful tourists and large companies.

I have noticed that creating comfortable conditions for business and building a strong ecosystem for startups has significantly increased the number of foreign companies looking to develop in this region over the past few years. The interest in Lithuania from businesses in at least a few other countries is a clear signal that the local market continues to grow.

Adaptation and opportunities

The world is changing, but the understanding of business, its opportunities, and boundaries is changing as well. I also believe that by following the same steps as successful companies, one can not only adapt to new conditions but also thrive. Lithuania could become that fertile ground for startups that is so necessary in our unstable times.

Key points of success

• Willingness to work- this factor plays a crucial role in any business.
• AdaptationTo new conditions – the ability to find a way out of difficult situations.
• Use of available resources– it is a powerful tool for achieving results.

I believe that in the near future we will see new breakthroughs and many interesting projects that are possible precisely because Lithuania is opening its doors to foreign investors and startups. This, in turn, can significantly enrich the region's economy and create new jobs, which is extremely important in today's conditions.