Lithuania: Country and Foreign Investment
Lithuania is the largest of the Baltic states, with an area of 65,200 sq km and 99 km of coastline on the Baltic Sea between Latvia to the north and Russia's Kaliningrad outpost to the south. The population is about 3.5m and is mostly of Lithuanian descent. Lithuanian is the official language, and 80% of the population are Roman Catholics.
The President is elected for a five-year term and appoints the ministerial team. Dalia Grybauskaite has been the President since May 2009.
Like most of the ex-USSR countries, Lithuania has had to cope with privatisation of most of its economy. The country joined the WTO at the same time as joining the EU in 2004. More than 60% of the economy is composed of services, with the remainder being industrial. GDP per head was USD15,500 (2009). Growth was -15% in 2009 (est), 2.8% in 2008 and 9.7% in 2007. The currency is the Litas (LTL), but the country is expected to adopt the Euro in or after 2013.
Telecommunication services are described as adequate. Mobile phones have been edging out fixed lines. There are three international airports, two of them in Vilnius, and international train services connecting Lithuania with Russia, Germany and Poland. Klaipeda is a major port of call for international commercial ship traffic, but there are few passenger ferries.
The commercial property market has thrived since independence, but Lithuania has suffered along with other European capitals during the recent recession. Banking is moderately well developed. There are 10 locally-licensed commercial banks, and a number of foreign bank branches.
Income tax rates are low, and there are two free zones which offer tax benefits to enterprises which invest more than EUR1m. Privileged tax treatment is available in the shipping sector.