Cleantech investment incentives in Lithuania: Green Corridor, FEZs, and beyond

Cleantech in Lithuania is fast becoming one of Europe’s most attractive destinations for investing in cleantech, thanks to generous cleantech investment incentives like the Green Corridor, the newly launched Investment Highway programme, Free Economic Zones (FEZs), and dedicated governmental support programs for cleantech projects. For companies wanting to invest in European cleantech, Lithuania offers competitive opportunities, clear regulations, and an innovation-driven ecosystem.

What is cleantech and why it matters for investors

“Cleantech” refers to technologies, products, and services that reduce environmental impact, improve energy efficiency or enable renewable energy. With global demand rising for green energy, carbon reduction, and sustainability, investors are shifting their focus on markets that support cleantech innovation. Lithuania’s place in the cleantech sector is rising fast: it offers clean power potential, EU funding, and a regulatory environment supportive of green transformation.

Why Lithuania is emerging as a cleantech hub

Lithuania combines several strengths that appeal to cleantech investors:

• A skilled and growing workforce in engineering, renewable energy, and green technology.
• EU membership, geographic access to Northern and Central Europe, and alignment with EU climate goals.
• As of 2024, over 170 cleantech companies are active in Lithuania, including scaleups and startups, contributing to resilience and competitiveness.
• Ambitious renewable energy targets: Lithuania aims to produce 100% of electricity from renewable sources by 2028 and become a net exporter by 2030.

Key cleantech investment incentives in Lithuania

The Green Corridor: fast-track for green investments

The Green Corridor initiative (for large-scale investment projects) offers substantial cleantech investment incentives. Projects investing at least €20 million (or €30 million in Vilnius) and creating a required number of jobs can qualify for 0% corporate income tax for up to 20 years, faster permit approvals, and streamlined regulatory procedures.

Free Economic Zones (FEZs) and tax incentives

Lithuania has seven Free Economic Zones, including Kaunas FEZ, Klaipėda FEZ, Šiauliai FEZ, Kėdainiai FEZ, Akmenė FEZ, Panevėžys FEZ, Marijampolė FEZ. In these zones, corporate profit tax can be reduced to 0% during the company’s initial 10 years of operation, followed by a CIT of 8% for up to 6 years after that. There are also additional benefits, such as 0% real estate tax, and exemptions on dividends and property taxes.

Support for renewable and green energy projects

Lithuania also offers renewable energy tax breaks, grants, and cleantech funding for green energy innovations, including subsidies and EU co-financing. Support from the EU’s Recovery and Resilience Facility (RRF) and the RePowerEU chapter adds up to €1.5 billion, and is specifically dedicated to reducing carbon emissions, accelerating clean energy deployment, and boosting energy efficiency in Lithuania.

Additionally, through investment project incentives, firms can reduce taxable profits by up to 100% of acquisition costs for qualifying long-term assets like machinery or equipment tied to clean energy or green technology.

Steps to invest in Lithuania’s cleantech sector

1. Determine project scale & eligibility: Review thresholds for Green Corridor status (investment, jobs, region) or FEZ eligibility.
2. Site selection: Choose a location within a Free Economic Zone or other region that offers infrastructure and incentives.
3. Engage government support: Work with Invest Lithuania and relevant ministries to apply for large-scale project status or other tax incentives.
4. Plan regulatory compliance: Obtain environmental approvals, ensure renewable energy permits, and align with local regulations.
5. Leverage grants/R&D funding: Apply for national or EU grants for green innovation and R&D.
6. Finalise tax and operational arrangements: Secure tax breaks, property or infrastructure incentives, and manage the operational setup.

Lithuania is becoming one of Europe’s top destinations for cleantech companies. Between the Green Corridor initiative, generous FEZ tax incentives, renewable energy tax breaks, and active support for innovation, the country offers a favorable environment for those investing in cleantech. While regulatory and planning challenges remain, the transparent framework and policy consistency make Lithuania a reliable partner for cleantech investment incentives.