Economy of Lithuania

Vilnius CBD
Currency	Euro (EUR, €)
Fiscal year	Calendar year
Trade organisations	EU, WTO, OECD
Country group	Developed/Advanced[1] High-income economy[2] Largest Baltic economy[3]
Statistics
Population	2,886,515 (2024)[4]
GDP	$78.346 billion (nominal, 2023 est.)[5] $137.389 billion (PPP, 2023 est.)[5]
GDP rank	78th (nominal, 2023) 88th (PPP, 2023)
GDP growth	4.94% (2021) 1.84% (2022e) 2.59% (2023e)[5]
GDP per capita	$28,094 (nominal, 2023 est.)[5] $49,266 (PPP, 2023 est.)[5]
GDP per capita rank	40th (nominal, 2023) 39th (PPP, 2023)
GDP by sector	agriculture: 3.3% industry: 28.5% services: 68.3% (2017)[6]
Inflation (CPI)	1.3% (2020 est.)[5] 2.2% (2019)[5] 2.5% (2018)[5]
Population below poverty line	20.9% – monthly income below €510 (2022)[7] 26.3% at risk of poverty or social exclusion (AROPE, 2019)[8]
Gini coefficient	35.4 medium (2019, Eurostat)[9]
Human Development Index	0.879 very high (2022)[10] (37th) 0.795 high IHDI (39th) (2022)[10]
Labour force	1,439,700 (2019)[11] 77.8% employment rate (2018)[12]
Labour force by occupation	agriculture: 9.1% industry: 25.2% services: 65.8% (2015 est.)[3]
Unemployment	6.4% (April 2022)[13] 23.1% youth unemployment (15 to 24 year-olds; July 2020)[14]
Average gross salary	€2,110 per month (2023 Q4)[15]
Average net salary	€1,304 per month (2023 Q4)[15]
Main industries	Petroleum refining, food processing, energy supplies, chemicals, furniture, wood products, textile and clothing[16]
External
Exports	€44.31 billion (2022)[17]
Export goods	Mineral products, furniture, vehicles and their parts, plastics, machinery, electrical machinery and equipment, wood[17]
Main export partners	Latvia 12.86%  Poland 9.04%  Germany 7.93%  Russia 6.16%  Estonia 5.72%  Netherlands 5.44%  United States 5.28%  Sweden 4.11% (2022)[17]
Imports	€52.54 billion (2022)[17]
Import goods	Mineral products, vehicles and their parts, machinery, electrical machinery and equipment, plastics, pharmaceutical products, iron and steel[17]
Main import partners	Poland 11.67%  Germany 11.62%  Latvia 7.87%  United States 7.56%  Sweden 5.26%  Russia 4.93%  Norway 4.84%  Netherlands 4.5%  Saudi Arabia 4.15% (2022)[17]
FDI stock	€29.74 billion (31 December 2022)[18] Abroad: €10.58 billion (31 December 2022)[18]
Current account	$364 million (2017 est.)[3]
Gross external debt	$34.48 billion (31 March 2016 est.)[3]
Public finances
Government debt	36.3% of GDP (2019)[19] €17.524 billion (2019)[19]
Budget balance	€129 million surplus (2019)[19] +0.3% of GDP (2019)[19]
Revenues	35.2% of GDP (2019)[19]
Expenses	34.9% of GDP (2019)[19]
Economic aid	€6.8 billion from European Structural and Investment Funds (2007–2013)[20] €8.39 billion from European Structural and Investment Funds (2014–2020)[21]
Credit rating	Standard & Poor's:[22] A- (Domestic) A- (Foreign) AAA (T&C Assessment) Outlook: Stable Moody's:[23] A3 (long-term) (P)P-2 (short-term) Outlook: Stable Fitch:[24] A- (long-term) F1 (short-term) Outlook: Positive Scope:[25] A (long-term rating) Stable (long-term Outlook) S-1 (short-term rating)
Foreign reserves	€3.9 billion (October 2018)[26]
[27][28][29][30][31][32][33] All values, unless otherwise stated, are in US dollars.

The economy of Lithuania is the largest economy among the three Baltic states.^[34][35] Lithuania is a member of the European Union and belongs to the group of very high human development countries and is a member of the WTO and OECD.

In the 1990s, Lithuania rapidly moved from a centrally planned economy to a market economy, implementing numerous liberal reforms. It enjoyed high growth rates after joining the European Union along with the other Baltic states, leading to the notion of a Baltic Tiger. Lithuania's economy (GDP) grew more than 500 percent since regaining independence in 1990. The Baltic states have a combined workforce of 3.3 million people, with 1.5 million of these working people living in Lithuania.

GDP growth reached its peak in 2008, and was approaching the same levels again in 2018.^[36] Similar to the other Baltic States, the Lithuanian economy suffered a deep recession in 2009, with GDP falling by almost 15%. After this severe recession, the country's economy started to show signs of recovery already in the 3rd quarter of 2009. It returned to growth in 2010, with a positive 1.3 outcome and with 6.6 per cent growth during the first half of 2011. The country is one of the fastest growing economies in the EU.^[37] GDP growth had resumed in 2010, albeit at a slower pace than before the crisis.^[38][39] The success of the crisis taming is attributed to the austerity policy of the Lithuanian government.^[40]

Lithuania has a sound fiscal position. The 2017 budget resulted in a 0.5% surplus, with the gross debt stabilising at around 40% of the GDP. The budget remained positive in 2017, and was expected to continue to do so in 2018.^[41]

Lithuania is ranked 11th in the world in the Ease of Doing Business Index prepared by the World Bank Group,^[42] 16th out of 178 countries in the Index of Economic Freedom, measured by The Heritage Foundation^[43] and 8th out of 165 countries in the Economic Freedom of the World 2021^[44] by Fraser Institute. On average, more than 95% of all foreign direct investment in Lithuania comes from European Union countries. Sweden is historically the largest investor with 20% – 30% of all FDI in Lithuania.^[45] FDI into Lithuania spiked in 2017, reaching its highest ever recorded number of greenfield investment projects. In 2017, Lithuania was the third country, after the Republic of Ireland and Singapore by the average job value of investment projects.^[46]

Based on OECD data, Lithuania is among the top 5 countries in the world by postsecondary (tertiary) education attainment.^[47] This educated workforce attracted investments, especially in the ICT sector during the past years. The Lithuanian government and the Bank of Lithuania simplified procedures for obtaining licences for the activities of e-money and payment institutions.^[48] positioning the country as one of the most attractive for the financial technology initiatives in the EU.

History of economy

The history of Lithuania can be divided into seven major periods. All the periods have some interesting and important facts that affected the economic situation of the country in those times.

• Ancient times – Baltic tribes (until the 13th century)
• Kingdom of Lithuania (1251–1263)
• Grand Duchy of Lithuania (1263–1569)
• Polish–Lithuanian Commonwealth (1569–1795)
• Pressure of the Russian Empire (1795–1914)
• Republic of Lithuania during the interwar period (1918–1940)
• Lithuanian Soviet Socialist Republic (1944–1990)
• Republic of Lithuania (1990–)

History up to the 20th century

Lithuanian long silver currency, 12th–15th centuries

Various types of trade ships in Nemunas near Kaunas, 19th century

The first Lithuanians formed a branch of an ancient ethno-linguistic group known as the Balts. Up to the 4th century, Lithuanian tribes maintained close trade contacts with the Roman Empire^{[49][self-published source?]} via Aquileia processing center and Carnuntum.^[50][51] Amber was the main good provided to the Roman Empire from Baltic Sea coast, via a long route called the Amber Road.

Afterwards, the trading ties persisted with the central European tribes, fostering a consistent exchange of goods. Alongside the most prized commodity of amber, items such as leathers, furs, beeswax, and limited algicultural productss were among the other traded commodities.^[50] The connections can be seen through the shared name for amber - the Hungarian gyanta, gyantar are closely related to the Lithuanian gintaras. It's still debated which language group could have loaned the word from another.^[50]

Consolidation of the Lithuanian lands began in the late 12th century. King Mindaugas was the first Catholic King of Lithuania in 1253. The expansion of the Grand Duchy of Lithuania reached its height in the middle of the 14th century under the Grand Duke Gediminas (reigned 1316–1341), who established a strong central government which later came to dominate the territories from the Baltic Sea to the Black Sea. Grand Duke Gediminas issued letters to the Hanseatic league, offering free access to his domains for men of every order and profession from nobles and knights to tillers of the soil. Economic immigrants and immigrants, seeking religious freedom improved the level of handicrafts. During the reign of Duke Kęstutis (1297–1382), the first cash taxes were introduced, although most taxes were still paid in goods (e.g., wheat, cattle, horses).

In 1569 the Polish–Lithuanian Commonwealth formed through the union of the Kingdom of Poland and the Grand Duchy of Lithuania. The economy of the Commonwealth was dominated by feudal agriculture based on the exploitation of the agricultural workforce (serfs). Poland–Lithuania played a significant role in supplying 16th-century Western Europe with exports of three sorts of goods: grain (rye), cattle (oxen) and fur. These three articles amounted to nearly 90% of the country's exports to western markets by overland and maritime trade.^{[citation needed]} There was even a Lithuanian trading vessel – vytinė, used for four hundred years to transport grain via Nemunas river. Statutes of Lithuania were the main collections of law statements and rules for nearly three centuries since being published in 1529.

The Commonwealth was famous for Europe's first and the world's second modern codified national constitution, the so-called Constitution of 3 May, declared on 3 May 1791 (after the 1788 ratification of the United States Constitution). Economic and commercial reforms, previously shunned as unimportant by the Szlachta, were introduced, and the development of industries was encouraged.^{[by whom?]}

Following the partitions of the Polish–Lithuanian Commonwealth in 1772, 1793 and 1795, the Russian Empire controlled the majority of Lithuania. During the administration of the Lithuanian lands by the Russian Empire from 1772 to 1917, one of the most important events that affected economic relations was the emancipation reform of 1861 in Russia. The reform amounted to the liquidation of serf dependence previously suffered by peasants; it boosted the development of capitalism. However, Lithuania, as did its neighbouring provinces, remained an agricultural supplier for the post Industrial Revolution European markets.

Lithuania in the 20th century

Lithuania had stagnant economic growth in the interwar period (1919–1940).^[52] Its GDP growth resembled newly established agricultureal states such as Estonia and Poland.^[52] Lithuania's economy did not undergo contraction during the Great Depression.^[52]

On 16 February 1918, the Council of Lithuania passed a resolution for the re-establishment of the Independent State of Lithuania. Soon, many economic reforms for sustainable economic growth were implemented. A national currency, called the Lithuanian litas, was introduced in 1922. It proved to become one of the strongest and most stable currencies in Europe during the inter-war period.^[53] Lithuania had a monometalism system where one litas was covered by 0.150462 grams of gold stored by the Bank of Lithuania in foreign countries. Litas remained stable even in the period of Great Depression. During the time of its independence, 1918–1940, Lithuania made substantial progress. For example, Lithuania was the third-ranking flax producer and exporter in the world market (export of flax constituted about 30 percent of all export share^[54]), being surpassed only by Soviet Russia and Poland;^[55] Lithuanian farm products such as meat, dairy products, many kinds of grain, potatoes, etc. were of superior quality in the world market. Lithuanian farmers were joining into cooperative companies – e.g. Lietūkis, Pienocentras, Linas, which helped farmers to process and sell their products more efficiently and profitably.

Having taken advantage of favorable international developments, and driven by its foreign policy aims directed against Lithuanian statehood, the Union of Soviet Socialist Republics (USSR) occupied Lithuania in 1940.^[56] Land and the most important objects for the economy were nationalized, and most of the farms collectivized. Just after one year of occupation, poverty level, unemployment increased dramatically, lack of food products appeared. Later, many inefficient factories and industry companies, highly dependent on other regions of USSR, were established in Lithuania. Despite that, in 1990, GDP per capita of the Lithuanian Soviet Socialist Republic was $8,591, which was above the average for the rest of the Soviet Union of $6,871 but lagging behind developed western countries.

The Soviet era brought Lithuania intensive industrialization and economic integration into the USSR, although the level of technology and state concern for environmental, health, and labor issues lagged far behind Western standards.^[57] Urbanization increased from 39% in 1959 to 68% in 1989. From 1949 to 1952 the Soviets abolished private ownership in agriculture, establishing collective and state farms. Production declined and did not reach pre-war levels until the early 1960s. The intensification of agricultural production through intense chemical use and mechanization eventually doubled production but created additional ecological problems. This changed after independence, when farm production dropped due to difficulties in restructuring the agricultural sector.^[57]

The overall damage, resulted from the Soviet occupation (including the loss of gross domestic product), estimated according to the UN recognised methodologies amounted to approximately US$800 billion; direct damage (including genocide and deportations of the citizens, property looting) estimation is US$20 billion.^[58]

According to a 2019 study by economic historians, Lithuania had above average economic growth from 1937 to 1973 (when compared to other economies), but below average growth from 1973 to 1990.^[59]

Development since the 1990s

Reforms since the mid-1990s led to an open and rapidly growing economy. Open to global trade and investment, Lithuania now enjoys high degrees of business, fiscal, and financial freedom. Lithuania is a member of the EU and the WTO, so regulation is relatively transparent and efficient, with foreign and domestic capital subject to the same rules. The financial sector is advanced, regionally integrated, and subject to few intrusive regulations.^[43]

One of Lithuania's most important reforms was the privatization of state-owned assets. The first stage of privatization was being implemented between 1991 and 1995. Citizens were given investment vouchers worth €3.1 billion in nominal value, which let them participate in assets selling.^[60] By October 1995, they were used as follows: 65% for acquisition of shares; 19% for residential dwellings; 5% for agricultural properties; and 7% remained unused.^[60] More than 5,700 enterprises with €2.0 billion worth of state capital in book value were sold using four initial privatization methods: share offerings; auctions; best business plans competitions; and hard currency sales.^[60]

The second privatization step began in 1995 by approving a new law that ensured greater diversity of privatization methods and that enabled participation in the selling process without vouchers. Between 1996 and 1998, 526 entities were sold for more than €0.7 billion.^[60] Before the reforms, the public sector totally dominated the economy, whereas the share of the private sector in GDP increased to over 70% by the 2000 and 80% in 2011.^[61]

Monetary reform was undertaken in the early nineties to improve the stability of the economy. Lithuania chose a currency board system controlled by the Bank of Lithuania independent of any government institution. On 25 June 1993, the Lithuanian litas was introduced as a freely convertible currency, but on 1 April 1994 it was pegged to the United States dollar at a rate of 4 to 1. The mechanism of the currency board system enabled Lithuania to stabilize inflation rates to single digits. The stable currency rate helped to establish foreign economic relations, therefore leading^{[citation needed]} to a constant growth of foreign trade.^[62]

By 1998, the economy had survived the early years of uncertainty and several setbacks, including a banking crisis. However, the collapse of the Russian ruble in August 1998 shocked the economy into negative growth and forced the reorientation of trade from Russia towards the West.^[57]

Lithuania was invited to the Helsinki EU summit in December 1999 to begin EU accession talks in early 2000.^[63]

After the Russian financial crisis, the focus of Lithuania's export markets shifted from East to West. In 1997, exports to the Soviet Union's successor entity (the Commonwealth of Independent States) made up 45% of total Lithuanian exports. This share of exports dropped to 21% of the total in 2006, while exports to EU members increased to 63% of the total.^[57] Exports to the United States made up 4.3% of all Lithuania's exports in 2006, and imports from the United States comprised 2% of total imports. Foreign direct investment (FDI) in 2005 was €0.8 billion.

On 2 February 2002 the litas was pegged to the euro at a rate of 3.4528 to 1, which remained until Lithuania adopted the euro in 2015. Lithuania was very close to introducing the euro in 2007, but the inflation level exceeded the Maastricht requirements.^[64] On 1 January 2015, Lithuania became the 19th country to use the euro.^[65]

The Vilnius Stock Exchange, now renamed the NASDAQ OMX Vilnius, started its activity in 1993 and was the first stock exchange in the Baltic states. In 2003, the VSE was acquired by OMX. Since 27 February 2008 the Vilnius Stock Exchange has been a member of NASDAQ OMX Group, which is the world's largest exchange company across six continents, with over 3,800 listed companies.^[66] The market cap of Vilnius Stock Exchange was €3.4 billion on 27 November 2009.^[67]

During the last decade (1998–2008) the structure of Lithuania's economy has changed significantly. The biggest changes were recorded in the agricultural sector as the share of total employment decreased from 19.2% in 1998 to just 7.9% in 2008. The service sector plays an increasingly important role. The share of GDP in financial intermediation and real estate sectors was 17% in 2008 compared to 11% in 1998. The share of total employment in the financial sector in 2008 has doubled compared with 1998.^[68][69]

Lithuania in the 21st century

Between 2000 and 2017, the Lithuanian GDP grew by 308%.^[70]

One of the most important factors contributing to Lithuania's economic growth was its accession to the WTO in 2001 and the EU in 2004, which allows free movement of labour, capital, and trade among EU member states. On the other hand, rapid growth caused some imbalances in inflation and balance of payments. The current account deficit to GDP ratio in 2006–2008 was in the double digits and reached its peak in the first quarter of 2008 at a threatening 18.8%.^[71] This was mostly due to rapid loan portfolio growth as Scandinavian banks provided cheap credit under quite lax rules in Lithuania. The volume of loans to acquire lodgings has grown from 50 million LTL in 2004 up to 720 million LTL in 2007.^{[citation needed]} Consumption was affected by credit expansion as well. This led to high inflation of goods and services, as well as trade deficit. A housing bubble was formed.

The global credit crunch which started in 2008 affected the real estate and retail sectors. The construction sector shrank by 46.8% during the first three-quarters of 2009 and the slump in retail trade was almost 30%.^[38][72] GDP plunged by 15.7% in the first nine months of 2009.^[38]

Lithuania was the last among the Baltic states to be hit by recession because its GDP growth rate in 2008 was still positive, followed by a slump of more than 15% in 2009. In the third quarter of 2009, compared to the previous quarter, GDP again grew by 6.1% after five-quarters with negative numbers.^[38] Austerity policy (four-fifths of the fiscal adjustment consisted of expenditure cuts)^[73] introduced by the Kubilius government helped to balance the current account from −15.5 in 2007 to 1.6 in 2009.^[74] Economic sentiment and confidence of all business activities have rebounded from a record low at the beginning of the year 2009.

Sectors related to domestic consumption and real estate still suffer from the economic crisis, but exporters have started making profits even with lower levels of revenue. The catalysts of growing profit margins are lower raw material prices and staff expense.

At the end of 2017, investment of Lithuania's enterprises abroad amounted to EUR 2.9 billion. The largest investment was made in Netherlands (24.1 per cent of the total direct investment abroad), Cyprus (19.8 per cent), Latvia (14.9 per cent), Poland (10.5 per cent) and Estonia (10.3 per cent). Lithuania's direct investment in the EU member states totalled EUR 2.6 billion, or 89.3 per cent of the total direct investment abroad.^[75]

Based on the Eurostat's data, in 2017, the value of Lithuanian exports recorded the most rapid growth not only in the Baltic countries, but also across Europe, which was 16.9 per cent.^[76] Lithuania performs well in few measures of well-being in the Better Life Index by OECD, ranking above the average in education and skills, and work-life balance. It is below the average in income and wealth, jobs and earnings, housing, health status, social connections, civic engagement, environmental quality, personal security, and subjective well-being.^[77] Lithuanian people are the happiest people in the Baltic States.^[78][79]

Euro adoption

On 1 January 2015, Lithuania became the 19th country to adopt the euro. Joining the euro would relieve the Bank of Lithuania of defending the value of the litas, and "it would give Lithuania a say in the decision-making of the European Central Bank (ECB), as well as access to the ECB single-resolution fund and cheaper borrowing costs".^[65]

Business climate

Cumulative foreign direct investment (FDI) in 2017 was EUR 14.7 billion, or 35 per cent of GDP, EUR 5215 per capita.^[80] The largest FDI flow in Lithuania was into manufacturing (EUR 73.7 million), agriculture, forestry, fishery (EUR 27.4 million), information and communication (EUR 10 million). Sweden, The Netherlands and Germany have remained the largest investors.^[80]

Lithuania seeks to become an innovation hub by 2020. To reach this goal, it is putting its efforts into attracting FDI to added-value sectors, especially IT services, software development, consulting, finance, and logistics.^[81] Well-known international companies such as Microsoft, IBM, Transcom, Barclays, Siemens, SEB, TeliaSonera, Paroc, Wix.com, Philip Morris, Thermo Fisher Scientific established a presence in Lithuania.

Lithuanian FEZs (Free economic zone) offer developed infrastructure, service support, and tax incentives. A company set up in an FEZ is exempt from corporate taxation for its first six years, as well as a tax on dividends and real estate tax.^[82] 7 FEZ operate in Lithuania – Marijampolė Free Economic Zone, Kaunas Free Economic Zone, Klaipėda Free Economic Zone, Panevėžys Free Economic Zone, Akmenė Free Economic Zone, Šiauliai Free Economic Zone, Kėdainiai Free Economic Zone. There are nine industrial sites in Lithuania, which can also provide additional advantages by having a well-developed infrastructure, offering consultancy service and tax incentives.^[83] Lithuania is ranked third among developed economies by the quantity (16) of Special Economic Zones – after USA (256) and Poland (21).^[84]

Lithuanian municipalities provide special incentives to investors who create jobs or invest in infrastructure. Municipalities may tie designation criteria to additional factors, such as the number of jobs created or environmental benefits. Strategic investors' benefits could include favorable tax incentives for up to ten years. Municipalities may grant special incentives to induce investments in municipal infrastructure, manufacturing, and services.^[85]

About 40 percent of surveyed investors confirmed that they are carrying out Research and experimental development (R&D) or plan to do it in their Lithuanian branches.^[86] In 2018 Lithuania ranked as the second most attractive location for manufacturers in the Manufacturing Risk Index 2018.^[87] In 2019, Lithuania was 16th in Top 20 European FDI destination countries list, created by the Ernst & Young.^[88]

Regional situation

Lithuania is divided into ten counties. There are four cities with a population over 100,000 and two cities of over 50,000 people. The gross regional product is concentrated in the two largest counties – Vilnius and Kaunas. These two counties account for 2/3 of the GDP with just 50% of the population.^[89]

In 2023-Q3 Vilnius County was the only one with the average salary above the national average, while Utena County had the lowest with 20% below it.^[90]

In order to achieve balanced regional distribution of GDP, nine public industrial parks (Akmene Industrial Park, Alytus Industrial Park, Kedainiai Industrial Park, Marijampolė Industrial Park, Pagegiai Industrial Park, Panevėžys Industrial Park, Radviliskis Industrial Park, Ramygala Industrial Park and Šiauliai Industrial Park) and three private industrial parks (Tauragė Private Industrial Park, Sitkunai Private Industrial Park, Ramučiai Private Logistic and Industrial Park) were established to provide some tax incentives and prepared physical infrastructure.^[83]

Sectors of economy

In 2022, the sector with the highest number of companies registered in Lithuania is Services with 53,386 companies followed by Unknown industry and Wholesale Trade with 50,660 and 26,974 companies respectively.^[92]

Services

One of the most important sub-sectors is information and communication technologies (ICT). Around 37,000 employees work for more than 2,000 ICT companies. ICT received 9.5% of total FDI. Lithuania hosts 13 of the 20 largest IT companies in the Baltic States.^[93] Lithuania exported EUR 128 million worth ICT services in II quarter of 2018.

Development of shared services and business process outsourcing are some of the most promising fields. Companies that have outsourced their business operations to Lithuania include, Danske Bank, CITCO Group, Western Union, Uber, MIRROR, PricewaterhouseCoopers, Anthill, Adform, Booking Holdings (Kayak.com, Booking.com), HomeToGo, Visma, Unity, Yara International, Nasdaq Nordic, Bentley Systems, Ernst & Young and many more.

Financial services

The financial sector concentrates mostly on the domestic market. There are thirteen commercial banks that hold a license from the Bank of Lithuania and eight foreign bank branches.^[94] Most of the banks belong to international corporations, mainly Scandinavian. The financial sector has demonstrated incredible growth in the pre-crisis period (1998–2008). Bank assets were only €3.2 billion or 25.5% from GDP in 2000, half of which consisted of loan portfolio.^[95]

By the beginning of the year 2009, bank assets grew to €26.0 billion or 80.8% to GDP, the loan portfolio reached €20.7 billion.^[96] The loan-to-GDP ratio was 64%. The growth of deposits was not as fast as that of loans. At the end of 2008, the loan portfolio was almost twice as big as that of deposits. It demonstrated high dependence on external financing. Contraction in the loan portfolio has been recorded over the past year, so the loans to deposits ratio are slowly getting back to healthy levels.

Moody's Corporation declared about opening its office in Vilnius.^[97]

FinTech

The country has increasingly sought to position itself as the EU's main fintech hub, hoping to attract international firms by promising to provide European operational licences within three months, compared to a waiting period of up to a year in countries like Germany or the UK.^[98] In 2017 only, 35^[99] FinTech companies came to Lithuania – a result of Lithuanian government and Bank of Lithuania simplified procedures for obtaining licences for the activities of e-money and payment institutions.^[48] Europe's first international Blockchain Centre launched in Vilnius in 2018.^[100] The government of Lithuania also aims to attract financial institutions looking for a new location after Brexit.^[101][102] Lithuania has granted a total of 39 e-money licenses, second in the EU only to the U.K. with 128 licenses. In 2018, Google set up a payment company in Lithuania,^[103] Vilnius was ranked a seventh FinTech city by foreign direct investment (FDI) performance in 2019.^[104]

Bank of Lithuania, the Central Bank of Lithuania established a Regulatory sandbox^[105] to test financial innovations in a live environment under the guidance and supervision of the Bank of Lithuania. Bank of Lithuania has also developed LBChain which is the world's first blockchain-based sandbox developed by a financial market regulator, combining technological and regulatory infrastructures.^[106]

Manufacturing

Lithuania has a much larger manufacturing sector share in the economy's structure than the other Baltic countries. In this regard, Lithuania is closer to some Central European countries like the Czech Republic or Germany.^[107]

Manufacturing constitutes the biggest part of gross value added in Lithuania. The food processing sector constitutes 11% of total exports. Dairy products, especially cheese, are well known in neighbouring countries. Another important manufacturing activity is chemical products. The manufacturing of machinery and equipment sector in Lithuania comprises 7.1% of the country's GDP. 80% of production is exported so chemical products constitute 12.5% of total exports. Year 2019 was exemplary – more than 10 new factories were opened in Lithuania, working in the fields in engineering, high precision instruments, furniture and medical products.

Furniture

Furniture production employs more than 50,000 people and has seen double-digit growth over the last three years. The biggest companies in this field work in cooperation with IKEA, which owns one of the biggest wood processing companies in Lithuania. Lithuania is the fourth biggest supplier of furniture for IKEA after Poland, Italy and Germany.^[108]

Automotive industry

Continental AG in 2018 started to build a factory for high precision car electronics – the biggest greenfield investment project in Lithuania so far.^[109] Another German manufacturer of lighting technology Hella opened a plant in 2018 in Kaunas FEZ, which will produce sensors, actuators and control modules for the automotive industry.^[110] Lithuania's automotive cluster experienced significant growth during the past 5 years. Zdroj:https://en.wikipedia.org?pojem=Banking_in_Lithuania
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