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2013.11.04 13:21

Lithuania among 17 most attractive economies for business in the world

DELFI|The Lithuania Tribune2013.11.04 13:21

In the World Bank’s Report ‘Doing Business 2014’, which was announced on 29 October 2013, and which offers the evaluation of business conditions in 189 report-covered economies, Lithuania  has jumped from 27th to 17th position, the Ministry of Economy has informed.

Against other EU Member States Lithuania is ranked at the sixth place. Lithuania succeeded to improve its positions under more than half of the Doing Business indicators.

“The World Bank’s Doing Business Report is very much important when measuring the country’s attractiveness to foreign investors. Lithuania’s jump up by 10 positions in the area of business conditions implies the need for reforms in the lower Doing Business index positions, including Getting Electricity, Protecting Investors and Paying Taxes,” said Minister of Economy Evaldas Gustas.

It should be noted that the World Bank has re-calculated the rankings of 185 economies as a result of data and methodology revision; the Report now also includes four economies first covered by the Report – Libya, Myanmar, San Marino and South Sudan. The total number of Report-covered economies makes 189 this year.

Major progress was made by Lithuania under the ‘Starting a Business’ chapter. Thus, from the 107th position last year, Lithuania moved up by 96 positions to 11th place. In ‘Dealing with Construction Permits’ Lithuania changed its position from 48 to 39, in ‘Getting Credit’ – from 53 to 28, in ‘Trading Across Borders’ – from 24 to 15. In ‘Protecting Investors’ Lithuania stepped up from 68 to 70, the same as in ‘Paying Taxes’ – from 60 to 56.

In Doing Business 2014, out of 189 economies under review, Lithuania overtakes neighbouring Latvia (24) and Estonia (22), Poland (45) and the EU Member States like Germany (21), Holland (28), Belgium (36) and France (38). With increased ten rating positions Lithuania is now higher than Japan (27) and Canada (19).

Under the reference period from June 2012 to May 2013, Lithuania implemented a number of reforms in the ‘Starting a Business’ and ‘Getting Credit’ areas, which were important for the improvement of business conditions and which helped achieve this high position in the Doing Business rating. The latest Report included also reforms which were not covered under previous Doing Business reports.

The change which had a considerable effect on the rating was the Law on Small Partnerships enforced as of 1 September 2012 in the field of new business start-ups, which provided those willing to start their own business with the possibility of setting up an entity of a new legal form – a small partnership.

The establishment of a small partnership does not require considerable costs as no minimum authorised capital is required; moreover, a small partnership may be set up by electronic means. Furthermore, the term for registration an entity with the Register of VAT Payers was reduced from 13 to three calendar days.

Another reason behind the high ranking positions in the Doing Business Report is shortened duration of the issue of construction permits.

In the field of ‘Getting Credit’, by virtue of amendments to the Civil Code enforced on 1 July 2012, a property complex, which also comprises movable property, may be collateralised by a pledge transaction specifying therein only the maximum amount of liabilities secured by a pledge of the collateralised property.

As of 1 July 2012, the amendments to the Civil Code and other relevant legislation were enforced, under which the stamp is not mandatory for companies provided that the obligation to hold the stamp is contained in the provisions of the company’s founding documents or other relevant legislation. These changes will only be reflected in the next year’s Doing Business Report.

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