Lithuanian Economy

Lithuanian economyIn 2021, the Lithuanian Government did everything possible to keep the economy open and growing in the face of the pandemic. Significant progress was made in the development of the innovation ecosystem. The energy infrastructure is being further strengthened, the transport infrastructure of the future is being created, sustainable agriculture is being promoted, and other agricultural sectors are being developed within the framework of the initiative to help Lithuania to provide itself with food during the crisis and increase the number of Lithuanian food exports.

In order to open up entrepreneurship and reduce restrictions on the movement of residents, Lithuania is one of the first countries to introduce an important tool for managing the COVID-19 pandemic – a passport of opportunities. In 2021, enterprises received 42 thousand tax support and 38 thousand subsidies (almost 40% of all enterprises in total).

  • In Lithuania, a record number of investments were attracted in 2021 – almost 1 billion euros in value (29 investors were attracted in 2021), which created 4.5 thousand new jobs.
  • The engine of the country’s economy – export of goods of Lithuanian origin – grew by as much as 25 percent in 2021 (to 19.3 billion euros, and it accounted for 61.9 percent of Lithuania’s total exports).
  • In order to strengthen Lithuania’s economic relations around the world and diversify the export market, new positions of commercial attaches were created in the USA and Germany in 2021, and the creation of a Lithuanian trade representative office was envisaged in Taiwan. Currently, further economic representation and strengthening of work with Japan, South Korea, Singapore, France, Poland, Denmark and Italy are being carried out.
  • The annual assessment of the work of the business supervision bodies has begun – it is already clear that the publicly available results have led to the progress of institutions, and the costs of enterprises have decreased.


Lithuania’s geographical location is convenient for both international manufacturing and logistics companies and service centers. Located at the intersection of Western Europe, Scandinavia and the CIS countries, Lithuania is not only in a logistically convenient geographical environment for companies wishing to enter the markets of the European Union, but is also known for multiculturalism, which is extremely important for international business. These factors and the excellent transport and communication infrastructure of the country are the basis for the success of local and foreign businesses.

Leading communication technologies

Lithuania’s electronic infrastructure is recognized as one of the best in the European Union. It’s basically one of the best in the world. Lithuania is one of the key indicators of the development of the information society in the countries of the world to meet the needs of business in the field of Information and Communication Technologies (ICT) and is a regional leader in broadband and fiber-optic cable network infrastructure. The convenient time zone provides a wide coverage of international communication services, so Lithuania is an excellent place for international IT and communication services.

Borders with other countries are easily accessible in Lithuania

Lithuania’s physical infrastructure provides investors with ample opportunities to use reliable, fast and high-quality logistics options and optimize operations. All major markets of Northern Europe, Western Europe and Asia are easily and conveniently accessible by sea, air, road and rail.

The ice-free port of Klaipeda is the largest in the Baltic States, and it exports up to 70 million tons of cargo per year.


Lithuania has direct rail links with Russia, Belarus, Latvia, Poland, Germany, Ukraine, Italy, the Scandinavian countries, Turkey, Kazakhstan and China to provide cargo transportation services.

It has three international airports, from which the main cities of Europe can be reached in 2-3 hours.

A business ecosystem ready for innovation and development

Having become the largest fintech hub in Europe in a few years, Lithuania has proven its ability to adapt to the conditions dictated by new global processes and has decisively taken advantage of the opportunities created by Brexit. Lithuania has bravely accepted the challenge by uniting institutions to achieve a common goal – creating favorable conditions for the development and growth of fintech companies in Lithuania in a short time.

Having withstood the challenges of the pandemic in 2021, Lithuania’s fintech sector has recorded a record number of investments and an increase in the number of employees by almost 50 percent.

The development of the sector and the good assessment of Lithuania in the world are determined by the government’s attention to the needs of the sector and high requirements for investment regulation and transparency. A favorable environment for fintech business is also recorded according to international ratings. In 2021, Lithuania ranked 10th in the Fintech world ranking. The country has one of the lowest risk of money laundering – Lithuania ranks 9th in the world in the rating compiled by the Basel Institute. According to the licenses issued, Lithuania is considered the largest fintech community in the European Union.

Foreign direct investment (FDI)

Foreign direct investment is the main component of Lithuania’s consistent further growth. With unfilled industries and untapped potential, the country can offer favorable conditions for enterprises of various industries.

  • Top 3 in Europe in terms of FDI jobs attracted per inhabitant of the population
  • Ranking at the level of Ireland and Denmark, Lithuania can also provide an impressive value for money factor.

Investors who have chosen Lithuania often mention that they made such a decision thanks to human resources – 85% of young specialists speak English, digital literacy of Lithuanian specialists is high, employees are energetic, ready for challenges and are able to solve not only interesting, but also complex puzzles.

Just look at the list of local companies – after all, these are world leaders: Vinted, Nord Security, Kilo Health, Trafi, Tesonet, Bored Panda, CityBee, Brolis Semiconductors, TransferGo, Paysera and others. The fact that such well-known names as Danske Bank, Nasdaq, Continental, Hollister, Hella, McKesson and Thermo Fisher Scientific operate in Lithuania testifies to the stability, security and favorable infrastructure for business development in the country.

The state institution “Investuok Lietuvoje” (“Invest in Lithuania”) is a non-profit agency for the development of foreign direct investment. Its goal is to promote the creation of new jobs by attracting international companies, increase the competitiveness of the Lithuanian economy, investment attractiveness and recognition of the country in the world.

In Lithuania, it is easy to test ideas in reality

Every business starts with an idea, but ideas often remain unrealized for fear of making a mistake. Lithuania invites you to experiment – we have created an excellent environment for testing ideas in market conditions before presenting them to the world. In business incubators developed by various institutions and adapted to specific sectors, also known as sandboxes, startups in the field of finance, energy, transport and companies already established in the market can try their innovative products.

The Bank of Lithuania has become famous all over the world as an extremely progressive regulator, friendly to the latest financial technologies. In order to be not only a supervisory authority, but also a partner in the financial sector, the Bank of Lithuania provides a regulatory environment conducive to innovation.

A favorable environment for the development of financial technologies

Lithuania’s rapid and unprecedented travel to the Olympus of Fintech has surprised a number of foreign analysts and journalists. As of the end of 2021, there were 265 Fintech companies in Lithuania, or 35 more than a year ago (a 13% increase). Since 2014, the number of such companies has grown almost fivefold. The fintech sector employs 5,900 people, or almost 50% more than in 2020.

Some of them are newcomers, but among them we also see such world-famous names as SumUp, Revel Systems, Mambu and Revolut, who in Lithuania not only grow their own business, but also develop and test new products.

The favorable environment for enterprises in this area did not arise by itself and not overnight. The Bank of Lithuania (LB), one of the most progressive central banks in Europe, contributes to creating the right environment. Startups and mature Fintech players can take advantage of the Newcomer program developed by LB, which helps them establish themselves in the country. With the help of business incubators (sandboxes), companies can test new solutions that are still in development.

The focus is on the life science

Lithuania has set itself an ambitious goal to become a leader in the field of life sciences by 2030, and every year this goal seems more and more achievable. By the way, this leadership is clearly determined by the indicator of 5% of the country’s GDP. Biomedical companies are among the most profitable in the country – 90% of their products are exported to the whole world. In 2021, Lithuania joined the European Elite Club of Molecular Biology – the Institute of Partnership of the European Molecular Laboratory (EMBL) was established in Lithuania. The establishment of this center in Lithuania is the highest recognition of the competence of Lithuanian scientists to conduct world-class research.

Laser leadership and new opportunities

Lithuania can deservedly be called a laser state. The knowledge and competencies accumulated over decades allow Lithuanian scientists to develop products used in satellites, spacecraft, search for cancer cures and solve the problems of nuclear waste disposal. Our lasers are used by NASA and CERN, IBM, Hitachi, Toyota, Mitsubishi and as many as 95 of the top 100 universities in the world.

Lithuania is known as the leader in the domain of ultrashort pulsed lasers – the manufacturers of our country account for more than half of the world market in this area. In 2019, one of the most powerful lasers in the world developed by Lithuanians – the SYLOS laser system – was installed in the laboratory of the International Research Center in Hungary. In 2021, Lithuania became one of the founders of the European Consortium of Research Infrastructure for Extreme Light Infrastructure (ELI). This “LASER CERN” provides Lithuanian scientists with access to the world’s most advanced laser systems.

In addition to scientific institutions, the laser sector of Lithuania unites more than 50 enterprises. The products they create often have no equivalents in the world, so these companies rarely compete with each other. Today Lithuania exports lasers and laser technologies to more than 80 countries around the world.

Startup country

Have you ever wondered why the number of startups operating in Lithuania (both with local and foreign capital) has already exceeded a thousand? There are even several reasons for this. In particular, favorable conditions for business financing have been created in Lithuania and there are attentive bodies responsible for overseeing the startup ecosystem. In terms of funding provided by the government to startups, Lithuania surpasses even the Scandinavian countries! Support for startups on relocation, business development and legal issues is provided by such institutions as the Innovation Agency, Go Vilnius and the Bank of Lithuania.

In 2021, the startups merged into the Unicorns of Lithuania Association, which currently unites more than 40 Lithuanian startups. The Association sets an ambitious goal – creating an ecosystem by 2025, in which there would be 2 thousand startups. Startups operating in Lithuania annually replenish the country’s budget in the form of taxes of 375 million euros.

Currently, more than 16 thousand people operate in the Lithuanian startup ecosystem.

It was because of these conditions that the startup community flourished in Lithuania and in 2019 presented Lithuania with the first unicorn (a startup worth more than 1 billion euros) – Vinted. In 2022 Lithuania also welcomed the second startup Nord Security.

Anyway, Vinted and Nord Security are not the only attractions of the Lithuanian startup ecosystem. Many other leading companies also deserve mention, such as Trafi, Tesonet, Kilo Health, whose work and developed solutions make Lithuania famous abroad.

Inflation and real estate investments: is it worth it and what is the market situation now?

Lithuanian deposits in banks reach almost historical records, and the total amount of them today, according to the Bank of Lithuania, is almost 20 billion euros. This is due to the leading annual data of the European Union on inflation – in April it reached 16.6 percent. Experts note that real estate investments are gaining popularity as the most inflation-resistant form of investment, and this stimulates the movement of the real estate market.

The conclusions of analysts of the U.S. Bank – the fifth largest American bank – state that real estate investments are investments that are most resistant to high inflation, as we have today in Lithuania.

According to analysts, investing in stocks during a period of rising inflation is not a very sustainable solution, since when inflation increases in developed foreign markets, there is also a drop in stock prices, and in emerging markets, the negative impact of inflation on the stock price is even greater. The conclusions also address the impact of inflation on bond investments: the interest rate on most fixed income securities remains unchanged until maturity, so the purchasing power of interest payments decreases as inflation increases.

An economics expert also tells the U.S. Bank analysts: “Currently Lithuania and other eurozone countries are living in a period of high inflation, and this is one of the reasons why it is worth investing. Without doing anything with money, their value falls, i.e. money depreciates, and the faster prices rise, the faster money depreciates. Real estate is one of the areas in which investments, even in conditions of high inflation, are most often profitable, although, like everyone else, they are associated with risks.”

In addition, the Lithuanian economy has withstood the COVID pandemic relatively well – Lithuania’s GDP already exceeds the pre-pandemic level, and with economic growth, the demand for real estate is also growing, respectively, increasing real estate prices.

The demand created by investors does not allow real estate rates to slow down

According to the data collected by the real estate analytical platform CityNow, exactly 300 contracts for the sale of apartments in new buildings were concluded in Vilnius in April 2022. Contracts for the sale of 200 apartments are to be signed in May. “This is a normal amount, given the small supply and the fact that we are entering the summer season, when the market is usually less active,” comments Vilius Visokas, founder of the real estate analytics platform City Now.

According to him, buyers are encouraged to invest in real estate in the capital by extremely high inflation in Lithuania and a sharp decline in rental supply. Most of the investments are made in the projects of large developers, which will be completed in 2022. Buyers are very attentive to the reputation of developers and the ability to successfully complete construction, and developers are increasingly offering apartments to the market not according to drawings, but after the start of construction.

Crowdfunding platforms are getting more and more attention

Martinas Tsymbalas – head of the Letsinvest project – says that in addition to crowdfunding platforms in commercial real estate, there is also a more active interest of Lithuanians in investing in real estate through co-investment platforms: “Recently, when inflation has started to grow intensively, we feel a great interest in investing through crowdfunding platforms. People are interested in caution, because such an investment has not yet been tested by many, but they understand that in order to successfully invest in real estate, it is not easy to do it by yourself: you need to know the real estate market, be able to select sustainable projects, and then engage in their maintenance, rental. We notice this perception not only from small investors, but increasingly from large investors investing tens of thousands of euros, and we also begin to consider and choose investing through platforms instead of directly buying real estate, because it’s just much easier: you don’t need to analyze projects yourself, engage in the process of buying and then renting.”

The head of the Letsinvest project is also supported by economist A. Izgorodin, who claims that it is not recommended to invest independently in a completely uninteresting area: “Before investing in real estate independently, i.e. when buying real estate properties, it is necessary to inquire about the current situation in the real estate market, prospects, talk with market experts. Meanwhile, by choosing crowdfunding platforms, professional real estate investors “live” in the real estate market, monitor market trends daily and can provide higher returns than if you invested in real estate yourself.”

According to the economist, even when choosing to invest through reliable platforms, it is still necessary to understand that any investments are associated with risks, and it is advisable to diversify the investment portfolio.

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