2020.09.15 12:40

Belarusian IT firms want to relocate to Lithuania but face legal challenges

LRT TV, LRT RADIJAS, LRT.lt2020.09.15 12:40

Around 60 Belarus-based tech companies and 2,000 professionals are interested in moving to Lithuania, according to Invest Lithuania, a state investment promotion agency. However, unsolved legal challenges are hampering the process.

Around 1,500 tech companies operate in Belarus. But after internet outages and a crackdown on protesters following the August 9 presidential election, many are now considering moving their offices abroad.

Lithuania's Migration Department has recently introduced an online relocation application for foreign workers. Although this change was necessary, experts say that many more complications remain unaddressed.

Read more: Lithuania publishes relocation guide for Belarusian firms

The Lithuanian legal system does not allow for the relocation of the entire company, as every worker needs to apply for permission individually.

“So, the firm cannot separate its departments. Therefore, it will probably choose to invest in other countries,” said Mantas Katinas, head of Invest Lithuania.

The relocation of individual professionals is also complicated as they need to go through several institutions, including the Foreign Ministry, the Migration Department, and the Employment Service, to get permissions, according to Mindaugas Ubartas, head of Lithuania’s association of communication tech industries Infobalt.

Invest Lithuania has submitted five recommendations to the government to facilitate Belarusian workers’ relocation to the country.

Read more: After internet outages, Belarusian tech firms consider moving to Lithuania

According to the agency, employers must be able to validate employees’ qualifications without the current requirement to present five years of professional experience and a confirmation from the Employment Service.

The professionals must also have a possibility to submit the necessary documents in their native language in Belarus. Invest Lithuania has also asked the government to waive the requirement to work in Lithuania for two years before a foreign person can bring his or her family to the country.

Another recommendation was to allow professionals to be tested for coronavirus when already in Lithuania or at the border, and not requiring a prior Covid-19 test.

However, the major barrier to the companies’ relocation to Lithuania is its stringent banking law, according to the experts. Anti-terrorism and anti-money laundering regulations forbid third-country companies to open bank accounts without being physically in Lithuania.

The Economy Ministry failed to reach an agreement with commercial banks to ease such restrictions. But the government said it will try to change the law.

“We need legal change, and we will try to implement this change in the next [parliamentary] session,” said Lithuanian Economy and Innovation Minister Rimantas Sinkevičius.

“Without legal changes, there is no other way [for Belarusian firms] to open bank accounts. Without a bank account, the company cannot be registered, and workers cannot come. It blocks companies’ relocation [to Lithuania] which is beneficial to our neighbours,” he added.

Latvia, Poland, and Ukraine also compete to attract the Belarusian firms and have created mechanisms to facilitate their relocation. For example, Latvia has set up a special group to process Belarusian businesses’ applications.

“We are all competing in the public relations race at the moment,” Ubartas said.