What to Know about Lithuania

Basic information

Brief  History

In the 1230s, Lithuanian lands were united by Mindaugas, founding the Kingdom of Lithuania on 6 July 1253. In the 14^th century it was called the Grand Duchy of Lithuania, being the largest country in Europe. On these days Lithuania, Belarus, Ukraine and parts of Poland and Russia were also lands of the Grand Duchy. On 1569 Lithuania and Poland formed a voluntary two-state personal union called Polish-Lithuanian Commonwealth that lasted more than two centuries. In World War II Lithuania was occupied first by the Soviet Union and then by Nazi Germany. In 1944, when Germans were retreating, the Soviet Union reoccupied Lithuania. On 11 of March 1990, Lithuania passed the Act of the Re-Establishment of the State of Lithuania, becoming the first Soviet republic to proclaim its independents.

Geography

Lithuania is in the Baltic region of Europe and covers an area of 65,200 km^2. It has around 99 kilometres of sandy coastline, only about 38 kilometres of which face the open Baltic Sea. The rest of the coast is sheltered by the Curonian sand peninsula. Lithuanias major warm-water port Klaipėda lies at the narrow mouth of the Curonian Lagoon (Kuršių marios). The main and the largest river in Lithuania is called Nemunas River and some of its tributaries carry international shipping.

Lithuania lies at the edge of the North European Plain. Its landscape was smoothed by the glaciers of the last ice age. It is a combination of moderate lowlands and highlands. Its highest point is  Aukštojas Hill at 294 metres.  The terrain features numerous lakes and wetlands, also a mixed forest zone that covers over 33% of the country. Drūkšiai is the largest, Tauragnas is the deepest and Asveja is the longest lake in Lithuania.

Climate

Lithuania has a temperate climate with both maritime and continental influences. It is defined as humid continental. Average temperatures on the coast are −2.5 °C in January and 16 °C in July. In Vilnius the average temperatures are −6 °C in January and 17 °C in July. The average annual precipitation is 800 mm on the coast, 900 mm in the Samogitia highlands and 600 mm in the eastern part of the country. Snow occurs every year, it can snow from October to April. In some years sleet can fall in September or May.

Administration

The current system of administrative division was established in 1994 and modified in 2000 to meet the requirements of the European Union. The country’s 10 counties are subdivided into 60 municipalities. The 3 biggest counties are Vilnius, Utena and Telsiai.

Government System

Lithuania is a democratic country that held its first independent general elections on 1992. Lithuania was one of the first countries in the world to grant women a right to vote in the elections. Lithuania exhibits a fragmented multi-party system with several small parties in which coalition governments are common. Ordinary elections take place every four years. A president is a head of state of the country that is elected every 5 years.

Economy

Lithuania has open and mixed economy that is classified as high-income economy by the World Bank. According to data from 2016, the three largest sectors in Lithuanian economy are – services, industry and agriculture. World Economic Forum’s Global Competitiveness Report ranks Lithuania 41st (of 137 ranked countries). On 1 January 2015, euro became the national currency replacing litas.

On average more than 95% of foreign investments in Lithuania comes from European countries. Lithuania was third country by the average job value of investment projects.

Lithuania has a flat tax rate rather than a progressive scheme. According to Eurostat the personal income tax (15%) and corporate tax (15%) rates in Lithuania are among the lowest in the EU. Corporate tax rate in Lithuania is 15% and 5% for small businesses.

Benefits of doing Business in Lithuania

Lithuania is a convenient and inexpensive jurisdiction to register a company in and do business with good development prospects. As they have strong emphasis of creating new jobs, they are happy to support businesses who are planning to invest in Lithuania and to grow using local specialists. Lithuanian companies are popular as having low costs of accounting and administration, low taxes and great geographical position.

A few few facts about that:

• Lithuania is a member of EU, NATO and part of Eurozone
• Lithuania has double taxation agreement with 57 countries
• A country with relatively inexpensive labour, low price level and no exchange controls

• Lithuania is one of the leaders in world’s freest economies on the ease of starting a business, as well as one of the leaders in Europe according to the index of investment attractiveness.
• Legitimate ways to reduce tax payments
• Eligible fixed tax rates in Lithuania on individuals’ income and entities that allow to make great profit doing business

Lithuania, officially the Republic of Lithuania, is a country located in northern Europe, on the southeastern coast of the Baltic Sea. It covers an area of ​​65,300 km².

Lithuania is one of the Baltic states. The country borders upon Latvia (the land borderline is 588 km long, the sea borderline is 22 km long), Belarus (the borderline is 677 km long), Poland (the borderline is 104 km long), Russia (along the Kaliningrad Region, the land borderline is 255 km long; along the Curonian Lagoon, the borderline is 18 km long, the sea borderline is 22 km long). The length of the Baltic Sea coast is 90.66 km.

After declaring its independence in 1918, the country was named “Lithuania”. On September 22, 1921, Lithuania was admitted to the League of Nations. On July 30, 1940, a delegation of confidants headed by Justas Paleckis set off to Moscow by train in order to submit an application for Lithuania’s membership in the Soviet Union on August 3 at the meeting of the Supreme Soviet of the Soviet Union. The Supreme Soviet satisfied the Lithuania’s application. Lithuania became part of the Soviet Union. After the collapse of the USSR in 1991, Lithuania became the Republic of Lithuania.

On September 17, 1991, Lithuania was admitted to the UN. On October 7, 1991, Lithuania joined UNESCO. Since May 1, 2004, Lithuania has been a member of the European Union that is part of the Schengen Area, which allows free travel between member countries. On March 29, 2004, Lithuania joined NATO.

BACKGROUND INFORMATION

As of June 1, 2022, the population of Lithuania was 2,797,950. Since the beginning of the year, the population change has been -8,053, or -0.29% (compared to January 1, 2022 when the population was 2,806,200).

The official language of Lithuania is Lithuanian; English and Russian are also widely spoken. The ethnic groups represented in the country are as follows: 84.6% are Lithuanians, 6.5% are Poles, 5% are Russians, 1% are Belarusians, and 2.9% have another ethnicity.

There are 103 cities in Lithuania. The largest Lithuanian cities include (as of 2021) Vilnius (556,100), Kaunas (292,512), Klaipėda (148,348), Šiauliai (100,970) and Panevėžys (83,770). The territory of Lithuania is divided into 10 counties, which consist of 60 municipalities. Lithuanian counties: Alytus, Kaunas, Klaipėda, Marijampolė, Panevėžys, Šiauliai, Tauragė, Telšiai, Utena and Vilnius.

Beauty of nature

Abundant shades of green, the freshest and purest water and enchanting landscapes are the gifts of Lithuanian nature to its inhabitants and guests that seem inexhaustible. Enjoy them, but remember to protect and cherish the greatest assets of Lithuania. Forests cover 1/3 of the country’s area. There are about 3,000 natural lakes in Lithuania, covering 880 km².

Lithuania is famous for its landscapes, plains, abundant forests, lakes and swamps. The Baltic Sea coast with its sandy beaches where you can find amber and the Curonian Spit with breathtaking views and dunes are also popular among tourists. The main resorts of Lithuania are the cities of Palanga, Neringa, Druskininkai and Birštonas rich in nature and various areas for recreation.

Nature

Nature is considered a great asset of the country, and it is cherished. Therefore, many national parks and landscape reserves have been created in Lithuania, which are a must-see. Currently, there are 5 national parks in Lithuania: Trakai Historical National Park, Aukštaitija National Park, Dzūkija National Park, Žemaitija National Park and Curonian Spit National Park.

All national parks occupy 1523 km², which is more than two percent of the territory of Lithuania. The oldest one, Aukštaiti National Park, was created in 1974 and includes as many as 104 lakes surrounded by pine forests. An interesting fact is that there are about 850 hills in Lithuania.

Most of the lakes are located on the Baltic and Samogitian Uplands, in the lowlands of Dainava and the rivers of Zheimena and Neris. The northern part of the arc of the Baltic Upland, the Aukštaičiai Upland, is particularly rich in lakes. Lakes Molėtai, Dubingių and Zarasaitis can be found here. The largest (Drūkšiai, Dysnai), deepest (Tauragnas, Malkėstaitis) and longest (Asveja, Sartai) lakes of the country are located on the Aukštaičiai Upland.

STATE SYSTEM OF LITHUANIA

Lithuania is a multi-party parliamentary democratic republic. The fundamental law of the country is the Constitution adopted by referendum in 1992. The Constitution establishes the rights and obligations of citizens of the country and determines the concept of separation of powers on the basis of which the power is exercised by the Seimas, the President, the Government and the Court.

The highest body of legislative power is the Sejm (unicameral parliament) consisting of 141 deputies elected for 4 years by universal, direct, secret suffrage. Legislative power is held by the unicameral Lithuanian Parliament (Seimas). 141 members of the Seimas are elected for four years either directly (half of them, or 71 members) or on a party list basis (the remaining 70 members) (proportional election system). Only those on the party list who win more than 5% get seats in the Seimas.

In the Republic of Lithuania, the supreme body of executive power is the Government headed by the Prime Minister and ministers heading 14 ministries.

The head of state of Lithuania is the President of the Republic elected directly by citizens for 5 years. The same person may be elected to the office of the President no more than twice in a row. One of the main functions of the President is the formation of foreign policy. The President appoints ministers, the Prime Minister and judges and is the Commander-in-Chief of the Armed Forces.

The Lithuanian judicial system is made up of the Supreme Court, the Court of Appeal, regional and district courts. According to the Constitution, courts of special jurisdiction may be established for considering administrative, labor, family and other cases.

ECONOMY

As of 2020, the economy of Lithuania (or the rural economy of Lithuania) is the fourteenth largest economy in the European Union (EU). According to the Constitution, it is based on the principles of private property rights and competitive market, otherwise defined as free market capitalist principles.

As per the World Competitiveness Index 2022, Lithuania moved up one position and was ranked 29^th among 63 countries (while in the previous year it was ranked 30^th).

In 2022, the minimum wage has changed. In 2022, the minimum wage is 730 euros. The minimum hourly wage is 4.47 euros. In 2022, the minimum net wage is 518 euros.

FOREIGN POLICY

Lithuania has been a member of the WTO since May 31, 2001. Today’s Lithuania is integrating into Western military and economic unions.

Since May 1, 2004, Lithuania has been a member of the European Union that is part of the Schengen Area, which allows free travel between member countries. On March 29, 2004, the NATO Parliamentary Assembly was held. Lithuania became a full member of NATO.

In 2015, Lithuania joined the euro area, it is also a member of the Council of Europe and the OECD. Lithuania has a developed economy with a high level of income, the country has achieved a high standard of living, the level of Lithuanian civil liberties, freedom of the media, freedom of the Internet and democracy are highly valued.

BUSINESS ENVIRONMENT

Rapidly adapting to global changes, Lithuania offers an excellent base for the development of innovations in the areas of financial technologies, life sciences, software, etc. Successful entrepreneurs come to Lithuania from all over the world to jointly develop future solutions, and Lithuanian startups cooperate with NASA and SpaceX.

Lithuania has become the largest financial technology hub in Europe in a few years and, thus, has proven its willingness to speed up processes and establish partnerships to help companies grow and prosper.

For a reason, Lithuania has achieved the 11^th position in the World Bank’s Doing Business report. In Lithuania, businesses face fewer bureaucratic hurdles, processes take less time compared to other countries, and important decisions are made faster. With an e-signature, a business can be set up within 24 hours and fees can be paid in just a few clicks. Meanwhile, office rental prices are highly competitive on a European scale.

Companies operating in the country also succeed due to the inspiration and perseverance of the Lithuanian people. Just look at the list of local companies that have become world leaders in their industries: Vinted, Trafi, Tesonet, Bored Panda, CityBee, Brolis Semiconductors, TransferGo and Paysera. And the fact that well-known brands, such as Danske Bank, Nasdaq, Continental, Hollister, Hella, McKesson and Thermo Fisher Scientific, operate in Lithuania speaks well for the stability, safety and sustainability of business development in the country.

CULTURE

Various events, concerts and exhibitions are often held in Lithuania. Thus, there is plenty of entertainment for its residents. Lithuanian hobbies, everyday habits, customs, traditions, culture, holidays, religion, etc. can provide insights into the lifestyle of Lithuanians.

There is also lots to see in the largest cities of Lithuania, namely Vilnius, Kaunas and Klaipėda. The cities are famous for their old towns, bike paths, a large number of churches and museums. The Old Town of Vilnius is inscribed on the UNESCO World Heritage List and is considered one of the largest surviving medieval old towns in Eastern Europe.

In 1793, the Faculty of Architecture was established at Vilnius University. At that time, professional art appeared in Lithuania. The Faculty of Architecture was headed by the classical painter Laurynas Stuoka-Gucevičius. Pranas Smuglevičius headed the Faculty of Drawing and Painting established in 1797. Thanks to Smuglevičius, the Vilnius school of art became the main artistic center of Lithuania and Poland.

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