Norwegian companies are opening their wallets and setting up in Lithuania in ever greater numbers, with 2014 a record year for investment in the Baltic country.
E24 explains how and why Lithuania is becoming an increasingly attractive location for Norwegian nearshoring and investment.
“Here you will get five employees for the price of one employee in Oslo,” explains Stig R. Myrseth, General Manager of Dovre Forvaltning. Mr Myrseth is referring in particular to the financial sector, which is experiencing strong growth in Lithuania thanks to its increasing attractiveness to the Nordic banking sector.
Nowhere is this trend more evident than in Vilnius, Lithuania’s bustling capital city. Storebrand already has almost 400 employees in the city, Danske Bank is currently recruiting 1000 specialists for its new, high-end service center – which it is relocating from Copenhagen – and next month, Skandiabanken will open an office in the city as well. Swedbank already has business in the country.
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For Mr Myrseth, the reasons why are clear: “Everyone is looking for salary gains, and we reap the benefits of being inside the EU, with low salaries and a qualified labor force. Cost levels are also low compared to the rest of Europe.”
He strongly advises Norwegian business leaders to start up operations in the country. “It is easy to come from Norway and conduct business here. Much is the same as back home, and Nordic business is popular with the government. There is also very close cooperation between governments in the Nordic and Baltic regions. The business environment is developing significantly in favour of Nordic businesses. The supply of Lithuanians who speak Nordic languages is increasing every year, and Norwegian is a popular foreign language to study at university.”
Mr Myrseth started his Vilnius-based asset management company Dovre in 2011. Back then, he was the only Norwegian out of the four employees. Today, there are nine employees in the company, and he is still the only one with a Norwegian passport. Yet those who work with Norwegian customers both speak and write Norwegian fluently.
It is not only in the capital Vilnius that investment levels from Norway are growing. Invest Lithuania, an investment development agency, report that Nordic-financed operations are being set up all over the country.
This helps to explain the fact that 2014 was a record year for Norwegian investment in Lithuania, making it now the third largest investor.
COUNTRIES INVESTING THE MOST IN LITHUANIA
6. United Kingdom
Measured by direct investment
“Companies controlled from Norway now have a turnover of more than 1.5 billion Euros a year,” explains Invest Lithuania’s General Manager Mantas Katinas. Five new investment projects were initiated during the course of last year and bring the total number of projects over the last five years up to 19. Mr Katinas continues: “About half of these projects have been in the capital city of Vilnius, and most have been in the service industry. Manufacturing companies from Norway are located throughout Lithuania.”
[quote text=”The business environment is developing significantly in favour of Nordic businesses. The supply of Lithuanians who speak Nordic languages is increasing every year, and Norwegian is a popular foreign language to study at university.” name_surname=”Stig R. Myrseth” description=”General Manager of Dovre Forvaltning”]
Norwegian businesses can benefit from a range of assets that Lithuania has to offer. These include the EU’s most highly-educated population, attractive tax conditions, well-developed infrastructure and a market economy with strong fundamentals. Moreover, more than half of the country’s population speaks at least two foreign languages.
Only Swedish and American business leaders have invested greater sums of money in Lithuania over the past five years than Norwegians. And Mr Katinas points out that the growth in foreign direct investment is spread across a range of sectors. “More than one third of the new investments in Lithuania over the past five years have been in manufacturing, and we have also seen strong growth in business services, design and other service industries.”
According to the World Bank’s global ranking for ease of starting a business, Lithuania is the 5th best location globally, with Norway ranked in 22nd place by comparison. Mr Katinas also explains that, alongside benefitting from business-friendly conditions, foreign companies can take advantage of the attractive taxation conditions in Lithuania. “Corporate tax in Lithuania is 15 percent and so is personal income tax. Although other social taxes are higher than in Norway, the overall level of taxation is moderate in the European context.”
Read full article in Norwegian at e24.no
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