(FEZ) - Industry Park & Logistic Centre

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to register their permanent establishment in Lithuania
for tax purposes.
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Invest in Lithuania
Investments Related to Real Estate
Enterprises with foreign capital may own, lease or use real
estate in Lithuania. There are no limitations set on the ownership
or usage of buildings, but some particular requirements
may apply to buildings of cultural or historical value.
Enterprises can take state-owned land plots on the lease
for a maximum period of 99 years. Privately owned land
may be leased for a maximum period of 100 years.
Foreign citizens and entities engaged in some registered
commercial activity in Lithuania and complying with
certain established criteria are allowed to purchase nonagricultural
land plots.
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Concessions
Currently, concessions are regulated by the Law on Concessions,
which was significantly amended on 24 June 2003 (the
‘Law on Concessions’), and harmonised with the EU directives
89/665/EEC, 92/50/EEC, 93/37/EEC and 2001/78/
EU. Significant amendments were also introduced to the
Law on Concessions on 11 July 2006 in relation to the improvement
of the legal environment for the private investments
in the area of concessions and its harmonisation with
the EU directives 2004/17/EB and 2004/18/EB. The law
defines a concession as granting of special permission to the
concessionaire to perform economic activities related to design,
construction, development, renovation, change, repairs,
management, use and (or) supervision of infrastructure
objects, rendering of public services, management and
(or) use of the state or municipal property (including natural
resources) in accordance with the concession agreement,
whereby the concessionaire accepts all or main liability for
risks, rights and obligations arising out of such activities,
whereas the remuneration to the concessionaire is assumed
to be a special permission to perform the indicated activities
and to the revenues from the pursued activities. The law includes
the list of activities which may be the subject of concession
agreements. Concessions may be granted to Lithuanian
or foreign entities. Usually, a public tender must be
held for granting a concession, however, in case of necessity
a concession may be granted without it. Lately, concessions
have been rapidly gaining popularity, particularly
among municipalities.
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Incentives
Currently, there are no laws establishing special incentives
for foreign investments, although certain tax incen-
tives still continue to apply to some foreign investments
that were made during 1993–1997. The Law on Investments
provides for several forms of incentives, such as
compensation of a portion of interest on the loans for investment
projects, granting of State (municipal) guarantees,
granting of loans by the State etc. The application of
such incentives is, however, subject to discretion of respective
State or municipal institutions.
Some specific incentives were provided to strategic investors,
i.e. the investors executing investment agreements
in relation to special investment and business conditions
applicable to investments exceeding LTL 200 million
signed with the Government until September 2001.
Currently, the Government or its authorised institution
may enter into investment agreements regarding investments
reaching up to LTL 20 million (up to LTL 5 million
in regions with high unemployment). As far as investments
into municipal infrastructure, manufacturing
and services are concerned, the municipality may enter
into investment agreements that meet the criteria established
by the Council of the Municipality. A municipality
may set special investment, business and land plot selection
conditions according to its competence. Based on
the practice of the Constitutional Court, stability clauses
may be provided in investment agreements only to the
extent that they do not limit applicability of any laws implementing
the Constitution to any foreign investors.
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Free Economic Zones
Lithuania has enhanced its attractiveness to foreign investors
through the development of free economic zones
(‘FEZs’). Lithuanian and foreign enterprises, corporations
and associations are invited to join the FEZs. Such Zones
offer considerable benefits to companies registered and operating
within their boundaries. These benefits include:
• profit tax incentives, such as 6 years’ exemption from
profit tax following the date of investment and 50% discount
for the following 10 years, are applicable to the
FEZs companies that have invested more than EUR 1
million; no taxes on dividends for foreign investors;
• exemption from customs duties and import taxes for
goods imported from a foreign country into free areas
(i.e. parts of the FEZ territory separated from it and
from the customs territory of Lithuania which does not
belong to FEZ) and exported from the free areas into
foreign countries; the aforementioned duties and taxes
also do not apply to goods stored, destroyed in or used
for the purpose of functioning of such free areas; and
• FEZ companies receive the same legal guarantees as
those operating outside the FEZ.