FDI flows to Lithuania have been fluctuating over the last fifteen years, firstly due to the global financial crisis and then to the regional crisis involving Russia and Ukraine, following a trend that is observed in other Baltic countries. According to UNCTAD's 2022 World Investment Report, FDI flows decreased from USD 3.5 billion to USD 2 billion between 2020 and 2021, as a result of the global economic crisis triggered by the Covid-19 pandemic. The total stock of FDI stood at USD 29.4 billion at the end of 2021, which is around 44.9% of the country’s GDP. Foreign direct investment stocks are concentrated in financial and insurance services, manufacturing, real estate, wholesale and retail trade, and IT services. By ultimate investing country, the USA (EUR 6.3 billion) is the largest investor in Lithuania followed by Sweden (EUR 4.1 billion), the United Kingdom (EUR 3.1 billion) and Germany (EUR 1.8 billion - BOL). Data from the Bank of Lithuania shows that in the first half of 2022, cumulative FDI inflows stood at EUR 1.1 billion and FDI per capita amounted to an average of EUR 10,013.
Lithuania offers tax exemptions to foreign companies, which can also profit from high-quality infrastructure and a skilled workforce. In recent years, building permits were facilitated, access to electricity was improved, minority investors were better protected and the tax payment system became electronic. Furthermore, national legislation assures equal protection for both foreign and domestic investors. Foreign investors have the right to repatriate profits, income, or dividends, in cash or otherwise, or to reinvest them without any limitation, after paying taxes. However, the country is still dependent on its exports towards Russia, hence vulnerable to external shocks, its domestic market is small and the income is lower than neighbouring countries. Recently, Lithuania strengthened the national security review mechanism to align it with the EU FDI Screening Regulation. Amid other changes, it extended the list of companies and entities considered relevant for national security to include radioactive waste companies, 5G service providers and infrastructure developers, secure public data networks, public safety and emergency services, digital mobile radio communication network operators and selected power generation companies. Growing sectors in terms of investment opportunities include real estate and construction, business process outsourcing (BPO), shared services, financial technologies, biotech and lasers. The country ranks 39th out of 132 in the 2022 Global Innovation Index and 33rd out of 180 in the Corruption Perception Index. Furthermore, Lithuania is at the 35th place out of 82 countries in the Economist Business Environment ranking.
|Foreign Direct Investment
|FDI Inward Flow (million USD)
|FDI Stock (million USD)
|Number of Greenfield Investments*
|Value of Greenfield Investments (million USD)
Source: UNCTAD - Latest available data.
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
The main strengths of Lithuania are:
The country has a number of weaknesses:
In recent years, various measures have also been taken to protect minority investors and facilitate administrative procedures (the payment of taxes and social contributions is now done online).
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Latest Update: December 2023