WTO/TRIMS
Lithuanian investment policies are consistent with TRIMS.
Investment Incentives
The Lithuanian government taxes corporate income, personal income, and capital gains at 15 percent. The value added tax is 21 percent and the annual real estate tax ranges from 0.3 to three percent depending on the market value of a property. For more details, please visit http://www.investlithuania.com/en/doing-business/taxes.
Lithuanian municipalities provide special incentives to investors, who create jobs or invest in infrastructure. Municipalities may tie designation criteria to additional factors, such as the number of jobs created or environmental benefits. Strategic investors' benefits include special business conditions such as favorable tax incentives for up to ten years. Municipalities may grant special incentives to induce investments in municipal infrastructure, manufacturing, and services.
Lithuania has seven Free Economic Zones (FEZs) located near the cities of Kaunas, Klaipeda, Siauliai, Kedainiai, Panevezys, Akmene, and Marijampole. The FEZs in Kaunas and Klaipeda have attracted the most business: there are 15 businesses operating in the Klaipeda FEZ, and 20 in the Kaunas FEZ. Companies operating in FEZs must follow the same accounting and reporting rules as companies operating in the rest of the country.
Companies that invest or are operating within the zones enjoy:
- six years' exemption from corporate income tax and a 50 percent reduction during the following 10 years, if the company invests more than USD 1.2 million;
- exemption from real estate tax;
- no tax on dividends (if the company is foreign).
Research and Development
Foreign investors have the same rights as local firms to participate in government-financed and subsidized research and development programs. There are no local content requirements for public procurement. Municipalities may ask investors to develop roadways or other infrastructure adjoining their project, but such proposals are subject to negotiation. Lithuania's EU membership has given foreign firms the additional right to appeal adverse governmental rulings to the European Court of Justice. Lithuania's "Law on Public Procurement," which took effect on March 1, 2003, is in accordance with the EU's acquis communautaire.
Performance Requirements
Some foreign investors, including U.S. citizens, report difficulties in obtaining and renewing residency permits. U.S. citizens can stay in Lithuania no more than 90 days without a visa (and no more than 90 days in any six-month period). Those who stay longer face fines and deportation. However, foreigners may only submit residency permit applications after they arrive in Lithuania. Therefore, the Embassy recommends applicants work with Lithuanian embassies and consulates to review documentation required for a permit.
Once the permit application is submitted in Lithuania, by law, Lithuanian authorities are allowed up to six months to issue residence permits to U.S. citizens. In recent years the process has taken less than three months on average. Residence permit processing does not include the time required to process work permits or other documentation, which must be started before applying for a residence permit. Documentary requirements are extensive and change frequently. For an exhaustive list of required documents, visit: http://www.migracija.lt/index.php?-746934303. In addition, dependents of those who hold residency permits for less than two years are barred from receiving a residency permit, unless the permit holder earns more than three times the monthly average, works as a teacher at a post-secondary educational institution, participates in an officially recognized exchange program, or invests in Lithuania.
The Embassy recommends that those applying for residency permits who intend to reside with dependents in Lithuania investigate the possibility of their dependents obtaining derivative residency permits. The Embassy is aware of cases where U.S. citizens were asked to leave Lithuania solely because their applications for residence permits were not processed within the 90 days for which they were initially admitted.
Data Storage
The Law on Cyber Security, which was passed by the Seimas in December 2014, gives the Cyber Division of the National Criminal Police (Cyber Police) the authority to order internet service providers (ISPs) and hosting services to temporarily restrict – for not more than 48 hours without court approval – services to users if the users or technologies used are suspected of criminal activities. The law also gives the Cyber Police right to collect, analyze, and evaluate information about potential violations in cyber space, and order ISPs and hosting services to temporarily store and save information related to service subscribers.
This information would allow authorities to specify the technical aspects of the type of communication used in the violation, and identify the user, IP address, and telephone or other access number. The Cyber Police also has the right to instruct providers to save and store information about the user accounts, payments, and electronic data, including contents of the information flow. With a court order, the Cyber Police have the right to receive data on users’ information flow and control the contents of information transferred.