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Expanding a Business to Lithuania

Becoming a global company is an impressive accomplishment, but not every business is cut out for the challenge. Sometimes focusing on resettling can kill your first business. Accordingly, you must be sure whether your main business pattern is sustainable or not. It is not always recommended to salvage your business by resettling.

Moreover, determine which of the expanding paths suits best for a company. It's either sales development or profit margins enlargement. Keep in mind that the most successful businesses are which grasp trends for tomorrow. Those entities take everything what's on the wave. On the other hand, if you enter into the market when the game is already in action, you have to answer yourself what makes you exceptional. Distinguishing your advantages over the competitors is what attracts customers. You should also know that the most inappropriate time to go to the market when it's "going down" which could happen if the economy is overheated.

Once you revise all these steps, you can move forward.

Why expanding a business in Lithuania?

Lithuania is a business-friendly country not only for young entrepreneurs and skilled professionals, but it is also trusted by high calibre companies. The country is full of youthful, ambition, competent, and talented people. Lithuania provides Europe's fastest internet connection and rapidly growing startup ecosystem. Most of the people have no problem talking in English. This small Baltic country has jumped eleven places since 2013 for the ease of starting a business to 16th place globally in the World Bank's Doing Business Report.

Six reasons to start your business in Lithuania:

• Competitive tax system
• Low operating costs
• Excellent infrastructure
• Rapidly developing country
• Best-educated people in Central and Eastern Europe
• Lithuania wants to become a Fintech hub.

In January 2018 Lithuania opened first Europe's Blockchain Gateway to the World which is located in capital Vilnius.

What's the Attraction for a UK Business?

While UK relationship with EU remains up in the air, many entities fear they could lose access to EU, which allow them to sell services across the 27 member bloc. Consequently, many businesses are setting up licensed subsidiaries in other EU countries to protect themselves against this risk. British Chamber of Commerce, a membership-driven organisation, working with Lithuania, promotes International trade, growth and business opportunities.

The UK is Lithuania's 10th largest trade partner with a 1 billion of export sales. However, was the only top importer that decreased its purchases from Lithuania over 2016 to 2017, down in value by -2.8%.

Lithuanian export to the UK is dominated by (2016 data by The Observatory of Economic Complexity):

• Mineral fuels
• Furniture, mattresses
• Chemical products
• Plastics and rubbers

Top UK export to Lithuania:

• Machines
• Footwear and headwear
• Chemical products
• Ethylene polymers
• Medical instruments, binoculars and telescopes.

Majority of the investments from the UK to Lithuania are into the financial sector.

It is also known that 15% of total Lithuanian export goes into Russia which means Lithuania can be a gateway to the Russian market due to:

Lithuanian companies usually have a lot of knowledge of operating in the Russian market;

Direct rail route into Russia;

However, internal and foreign affairs political decisions by Lithuania and the EU have impacted the operation of this trade route into Russia.

Worth to mention lots of Lithuanian people migrated to the UK. It could be an advantage if you have employees from Lithuania.

Business Opportunities In Lithuania

Technology

Fintech. According to Investinlithuania Fintech report 2017, 117 Total # of Fintechs in the country, 35 new companies in 2017, 1870+ estimated # of employees in the sector. The majority of Lithuanian Fintech companies are looking for banks as a distribution channel/partner, 38% have already partnered with Financial Institutions. B2B is the dominant business model.

Cybersecurity. According to the European Commission3, as of 2016, almost a quarter (22 percent) of the population has never used the Internet, and only 63 percent of households in Lithuania have a fixed broadband connection4 with even less access to the mobile internet (37 percent). With these values, Lithuania is below the European Union (EU) average regarding broadband and cellular Internet connection, despite being top performer regarding connectivity. Under RAIN III, which is part of the country's Next Generation Internet Access Development Plan running until 2020, the government seeks to close these gaps and aims to stimulate both supply and demand.

Data centres.

Lithuania has never experienced a simultaneous power outage

Part of NordPool Spot - Europe's largest market for electrical energy and world's first multinational exchange for trading electric power.

Access to renewable energy resources.

Energy reliability index of Litgrid for 2016 was 99,99993 %

Lithuania has one of the most reliable electricity networks in Northern Europe

Automotive industry.

Lithuania is not directly associated with automotive components manufacturing, but it is one of the few CEE countries that can still offer the right talent and the right conditions for quality and sustained business growth.

Aviation | MRO.

With some of the leading European aviation brands based in Vilnius

and Kaunas, the aviation industry is increasing. A pool of more than 2,850 professionals working in the aviation industry. 2nd in the EU for a share of motor vehicles, ships and aircraft programs' graduates. Kaunas Free Economic Zone:

0% corporate tax for the first six years

7,5% profit tax over the next ten years

0% tax on dividends and real estate

Service centres.

While this sector is not filled up yet, it's easy to find a niche, fast-growing opportunity, low turnover of employees, competitive salaries.

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