Lithuania faces exceptional international tension and uncertainty, underscoring the need for a stable business environment that fosters long-term investments, drives economic growth, and supports national defense. This perspective was highlighted by leaders of the Investors’ Forum, an association uniting the largest and most active investors in the Lithuanian economy, during a meeting with cabinet members.
In a forum with the government, business representatives noted that Lithuania faces unprecedented historical challenges today: from geopolitical threats, unprecedented trade wars, to capital flight and stagnation in productivity. Although the recently established 19th Government has already demonstrated its ability to quickly address issues facing businesses, investors believe that, more than ever, Lithuania’s business environment requires very measured solutions, as mistakes can have serious long-term consequences.
“The government should take all necessary measures to attract and retain international capital in Lithuania by making only prudent and justified decisions. However, some recent actions send a somewhat different message to businesses. This is especially true regarding plans to increase profit and personal income taxes, which could lead potential investors to circumvent Lithuania even more and prompt existing companies to consider other states for their investments. If we want a stronger Lithuania, we need to start from the basics – a functioning state, an attractive investment environment, and a growing economy. Then there will be well-paying jobs, stable defense funding, and trust in the country,” says Rolandas Valiūnas, chairman of the Investors’ Forum board and managing partner of the law firm Ellex Valiunas.
Focus on Strengthening Security
At the meeting, association members emphasized their appreciation for the government’s efforts to strengthen the country’s defense capabilities – 93% of Investors’ Forum members believe this should be the state’s main priority. According to investors, confidence in state security is one of the most important factors influencing foreign capital’s investment decisions in Lithuania; therefore, a consistent defense policy is a very important signal to the market.
However, investors also expressed growing concern about security communication. “In some discussions related to tax changes, the defense priority is not even mentioned, which raises alarms for businesses already operating in Lithuania or considering investments in the region. We are ready to contribute in every way we can to strengthen defense, but first, we must strictly agree that any significant changes to the business environment in Lithuania will be made with a clear primary objective – to strengthen the country’s security,” says Rūta Skyrienė, executive director of the Investors’ Forum. She notes that in today’s environment of record uncertainty, many of Lithuania’s export markets face challenges, so the state must make every effort to be a reliable growth platform for investors.
One of the biggest concerns for businesses is the gap between wage growth and productivity. In the past five years, Lithuania’s average annual wage growth of 11% has contrasted with stagnating productivity levels. Investors assess that, in the long run, this could lead to a loss of competitiveness, slower economic growth, and a smaller capacity to finance state priorities.
New Well-Paying Jobs Are Key to Overcoming Disparities
Representatives of the Investors’ Forum presented proposals to the Government aimed at ensuring growth, reducing social inequality, and creating a safe and attractive state for capital. It is emphasized that the least inequality is achieved not through equal poverty, but through creating as many well-paying jobs as possible.
“The association’s members, mostly foreign capital companies operating in Lithuania, pay their employees wages that are approximately double the national average. Therefore, the primary goal of the state, alongside ensuring security, should be to attract as many of these companies as possible to operate in Lithuania. However, some trends are concerning. It is estimated that last year capital left Lithuania more actively than it came in – for the first time in the entire history of the country’s economy. Businesses are increasingly choosing other jurisdictions, halting expansions, or even announcing withdrawals from Lithuania altogether. Therefore, without an attractive environment for capital, Lithuania will not be able to ensure returns on investments or a high value-added economy,” commented Vytautas Šilinskas, head of policy and corporate affairs at the Investors’ Forum.
In the forum with the government, it was noted that the number of workers in Lithuania is rapidly declining. According to United Nations forecasts, in 2025 Lithuania will have 2.2 million inhabitants, of whom just over one million will be of working age. Thus, in facing demographic challenges, it is essential to improve migration policy: measures must be defined for the state to attract and integrate nearly half a million workers from other countries. Current procedures are insufficiently flexible and effective for attracting and retaining specialists capable of creating high added value.
Investors suggest not only reviewing the migration system but also simplifying business accounting procedures. Today, the accounting of assignments and non-financial benefits requires excessive effort, which not only burdens businesses but also limits the ability to offer a competitive working environment for specialists. It is also proposed to restore the ability for businesses to obtain advance legal clarifications from the tax authority, which would help in planning activities and reducing risks.
Finally, the business community emphasizes the importance of Lithuania’s accessibility. Today, Lithuania is one of the least accessible capitals in Europe – this is not only an infrastructural issue but also a reputational one, raising doubts about the country’s stability.
According to the association, the success of government decisions will be determined not by the number of promises made but by the state’s ability to act effectively. Effective performance indicators, digitization of data exchange, open communication with businesses, and a clear priority of actions for ministries – these are essential conditions for a modern, functioning state that can both defend itself and grow.
Established in 1999, the Investors’ Forum currently unites more than 70 members, mostly foreign capital companies actively investing in the Lithuanian economy. The Investors’ Forum is a voluntary, fully independent, and self-governing organization. Its activities are financed through contributions collected from the association’s members.
The mission of the association is to improve the business environment and investment climate in Lithuania in collaboration with state institutions and the business community.