Investment Climate in Lithuania and Belarus

Among investing countries, Lithuania takes the third place after Russia and the US in foreign direct investment in Belarus. Investments from Lithuania to Belarus amounted to $ 126.1 million, and from Belarus to the Republic of Lithuania – $ 173 million (see figure below).

Lithuania – Belarus, investment climate

Fig. Dynamics of direct investments from Lithuania to Belarus in 2008-2012, USD million

Apparently, the crisis significantly affected the reduction in the volume of direct investment from Lithuania to Belarus. Strong growth has been observed since 2010, when investments increased by 48%, and in 2011 more than doubled. At the end of 2012, direct investments from Lithuania increased by 41% compared to the previous year and amounted to 126.1 million US dollars.

Direct investments in Lithuania from Belarus in 2012 amounted to 100 million dollars. This once again proves the importance of economic relations between Lithuania and Belarus and shows a positive trend in their development. As Prime Minister of Belarus Mikhail Myasnikovich noted on April 18, 2013, “In the next two years there is a real potential for their doubling (mutual investments between Lithuania and Belarus – approx.), But this requires a well-coordinated work of business and government in both countries. Belarus is ready for this. This is a good format for the synergy of our countries’ capital, which will create a solid foundation for economic growth, new efficient jobs, competitive products and services. ” (Source: Belarusian Telegraph Agency “News of Belarus”).

Experts predict that in 2013 the growth of investments in Lithuania, where there are good business opportunities and stable legislation, all this positively affects the ability to increase capital. Lithuania proved the opportunity to withstand the crisis, compared to other countries, it easily survived the crisis, and now is the time when the country comes out of recession and when it is profitable to invest money. (Source: “Economic Newspaper”).

Belarusian businessmen are primarily interested in expanding production in Lithuania with further access to the entire European market, namely in the production of mini tractors, communal equipment, metalworking, and the purchase of real estate in Lithuania. Lithuania in turn willingly imports from Belarus raw materials, finished products and semi-finished products, uses mutual services, primarily freight services. The Belarusian oil products, rolled metal, mineral fertilizers, peat, fuelwood, light and food products, various building materials, machinery and much more are also in demand on the Lithuanian market. Lithuania annually buys more than 1 thousand MTZ tractors. Two thirds of 160 thousand tractors in Lithuanian fields are of Belarusian production. Supplies of Belarusian technical salt takes 80% of the Lithuanian market. (Source: export.by)

The main industries in which the government of the Republic of Lithuania is interested in attracting foreign investors in the first place are energy, IT, agriculture, food industry and food processing, metal processing, light industry, catering and hotel business.

An agreement has been signed between Lithuania and the European Union, which provides free of charge financial support to the enterprises established in Lithuania and offering good innovative business projects, from 43 thousand Euros to 5.8 million Euros for the implementation of such projects. Any enterprise registered in Lithuania has the right to acquire land in ownership.

Lithuanian businesspeople in Belarus are primarily attracted by the food industry, supermarket chains, cooling and air conditioning systems. (Source: Embassy of the Republic of Belarus in the Republic of Lithuania)

In the next article, we will talk about Lithuania’s cooperation with Belarus in the field of transport and logistics.