Policies Towards Foreign Direct Investment

Lithuania’s laws assure equal protection for both foreign and domestic investors.  No special permit is required from government authorities to invest foreign capital in Lithuania.  State institutions have no right to interfere with the legal possession of foreign investors’ property.  In the event of justified expropriation, investors are entitled to compensation equivalent to the market value of the property expropriated.  The law obligates state institutions and officials to keep commercial secrets confidential and requires compensation for any loss or damage caused by illegal disclosure.  As a member of European Union, Lithuania is subject to WTO investment requirements. Invest Lithuania is the government’s principal institution dedicated to attracting foreign investment.  It serves as a one-stop-shop to: provide information on business costs, labor, tax and legal considerations, and other business concerns; facilitate the set up and launch of a company; provide help in accessing government financial support; and, advocate on behalf of investors for more business friendly laws.  In addition to its offices in Vilnius and major Lithuanian cities, Invest Lithuania has representative offices in Belgium, Kazakhstan, and the United States (Chicago). Every year the government holds a conference with foreign investors to discuss their concerns and ways to improve investment climate in Lithuania.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign investors have the right to repatriate profits, income, or dividends, in cash or otherwise, or to reinvest the same without any limitation, after paying taxes.  The law establishes no limits on foreign ownership or control. Foreign investors have free access to all sectors of the economy with some limited exceptions:

1. The Law on Investment prohibits investment of foreign capital in sectors related to the security and defense of the State.
2. The Law on Investment also requires government permission and licensing for commercial activities that may pose risks to human life, health, or the environment, including the manufacturing of, or trade in, weapons.
3. As of May 2014, foreign citizens are allowed to buy agricultural or forest land.

The Law on Investment specifically permits the following forms of investment in Lithuania:

• establishment of an enterprise or acquisition of a part, or the whole, of the authorized capital of an operating enterprise registered in Lithuania;
• acquisition of securities of any type;
• creation, acquisition, and increase in the value of long-term assets;
• lending of funds or other assets to business entities in which the investor owns a stake, allowing control or considerable influence over the company; and
• performance of concession or leasing agreements.
• Foreign entities are allowed to establish branches or representative offices.  There are no limits on foreign ownership or control. Foreign investors can contribute capital in the form of money, assets, or intellectual or industrial property.  The State Property Bank screens the performance record and size of companies bidding on state or municipal property and has halted privatizations when it determined that the bidders were not suitable, i.e., for criminal or other reasons.

In 2018, the Lithuanian parliament passed a new edition of the law on the Protection of Objects Important to National Security.  The law is aimed at enforcing additional safeguards to avoid threats related to investments into companies of strategic national importance, thus requiring a special government commission to screen investments in identified strategic sectors.

Other Investment Policy Reviews

http://www.oecd.org/countries/lithuania/economic-survey-lithuania.htm  

Business Facilitation

The process of company registration in Lithuania involves the following steps that can be accomplished online at http://www.registrucentras.lt/en/  :

1. Check and reserve the name of the company (limited liability company).  It takes about one day and costs approximately EUR 16.
2. Register at the Company Register, including registration with State Tax Inspectorate (the Lithuanian Revenue Authority) for corporate tax, VAT, and State Social Insurance Fund Board (SODRA).  It takes one day and costs approximately EUR 57.
3. Complete VAT registration.  It takes three days to complete at no charge.

Outward Investment

The Lithuanian government neither incentivizes nor restricts outward investment.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* Source for Host Country Data: Lithuanian Statistics Department

Table 3: Sources and Destination of FDI

Table 4: Sources of Portfolio Investment

Policies Towards Foreign Direct Investment

Malta seeks foreign direct investment (FDI) to increase its rate of economic growth.  Malta provides incentives to attract investment in high-tech manufacturing (including plastics, precision engineering, electronic components, automotive components, and health technologies, such as pharmaceuticals manufacturing, and life sciences), information and communications technology (ICT), research and development (R&D), aerospace and aviation maintenance, education and training, registration of ships and aircrafts, transshipment and related service industries, finance services, blockchain and artificial intelligence technologies, and digital gaming.

Malta’s comparative advantages include membership in the EU, Eurozone, and Schengen Zone; competitive wage rates (even though the standard of living is high, labor costs are relatively low compared with other EU countries); a highly skilled, English-speaking labor force; proximity to the European and North African markets; a fair and transparent business environment; and excellent telecommunications and transport connections.  Malta also offers financial, tax, and other investment incentives in order to attract FDI. Foreign investment plays an integral part in the government of Malta’s policies to reduce the role of the state in the economy and increase private sector activity.

Malta Enterprise, a government organization established to promote FDI in Malta, provides information to prospective investors, processes applications for government investment incentives, and serves as a liaison between investors and other government entities.  The organization offers an attractive investment package for U.S. and other investors.

There are no legal prohibitions against FDI-oriented sales in Malta’s domestic market.  The government seeks, as a top priority, companies operating in the following fields:

• High-end manufacturing, although virtually all manufacturing sectors are open to FDI.
• Information and communications technology, including electronic components, and digital gaming;
• Health technologies, medical equipment, pharmaceuticals and life sciences (including medical cannabis);
• Back office and regional support operations;
• Blockchain, artificial intelligence and fintech;
• Knowledge-based service, including aerospace and defense (aviation maintenance), education and training, and research and development;
• Logistics-based services, including marine technology, warehousing, and oil/gas services; and
• Film industry (Malta has one of the few sets in the world for water/boating scenes).

Limits on Foreign Control and Right to Private Ownership and Establishment

Private foreign investors are free to make equity arrangements as they wish, from joint ventures to full equity ownership.

The Government of Malta recognizes the right to private ownership in theory and in practice.  Private entities are free to establish, acquire, and dispose of interests in business enterprises and engage in all forms of remunerative activity.  Many U.S. firms sell their products or services in Malta through licensing, franchise, or similar arrangements. The government generally allows foreign companies to operate in merchandising areas, especially if they operate a licensing, franchising, or similar agreement through a local representative.

It is the government’s stated policy not to allow public enterprises to operate at the expense of private entities.  Some sectors, such as electricity generation, are also open to private sector participation. The government provides private enterprises with the same opportunities as public enterprises for access to markets and other business operations.

Other Investment Policy Reviews

The Government of Malta has not undergone any third-party investment policy reviews through a multilateral organization in the last three years.

Business Facilitation

The Maltese Commercial Code provides for the establishment of several types of business entities according to the needs of an individual investor when setting up a company in Malta.  The following are the available structures:

1. Private limited liability companies;
2. Public limited liability companies;
3. General partnerships; and
4. Limited partnerships

Foreign companies can also open subsidiaries or branch offices in Malta.

When setting up a Maltese private company, the minimum share capital amount accepted is EUR1, 165 (approx.USD1,300), the minimum for a public company is approximately EUR46,600 (approx. USD51,670) of which 25 percent must be deposited prior to registration.  In case of private companies with an authorized share capital exceeding the minimum requirements, only 20 percent of the amount must be deposited.

The maximum amount of shareholders is 50 and minimum is two (although a single member company may also be registered under the Companies Act).

The following are the main steps required to set up a company in Malta:

1. Reserve a company name with the Maltese Commercial Register;
2. Draft the company’s memorandum and articles of association;
3. Deposit the minimum share capital; and
4. File the application with the Malta Registrar of Companies.

The documents to be filed with the Malta Registrar of Companies are:

1. The memorandum and articles of association;
2. A confirmation of the company name reservation;
3. The bank receipt confirming the share capital deposit; and
4. Passport copies of the shareholders, directors, and company secretary.

The Memorandum must be presented to the Registrar of Companies, accompanied by a check to the Malta Financial Services Authority (MFSA) covering the registration fees, as well as a bank receipt as proof of payment of the initial share capital.  The MFSA may also request that due diligence on the directors, shareholders, and/or beneficial owners be provided before proceeding with the incorporation. Upon incorporation, companies must pay a registration fee that is payable to the MFSA according to the amount of share capital held by the company.

Once all of the requirements above are satisfied, incorporation of a company can normally be carried out within two to three working days.  Once incorporation is complete, the MFSA will publish a Certificate of Incorporation that will also display the company registration number.

MFSA website: https://mfsa.com.mt/  

The Government of Malta also offers a one-stop shop for small and medium-sized enterprises (SMEs) – Business First – that assists companies with all processing services and information to establish a company.  Business First brings more than 50 essential services from various government departments and entities under one roof. It assists all enterprises based in Malta, including micro enterprises, SMEs, and larger companies and foreign investors wishing to set up in the country.

Outward Investment

TradeMalta, incorporated in 2014, is a public-private partnership between the government and the Chamber of Commerce to help Malta-based enterprises internationalize.  TradeMalta is also the national organization tasked with marketing and coordinating both incoming and outgoing trade missions, promoting participation in international trade fairs, facilitating bilateral trade meetings, and researching new market opportunities.  Since 2017, TradeMalta has operated as part of the re-named Ministry for Foreign Affairs and Trade Promotion (before simply the Ministry of Foreign Affairs) and has targeted Sub-Saharan countries for their outgoing trade missions.

The organization provides specialized training programs in international business development and marketing, and it administers a number of incentives schemes and internationalization programs aimed at both novice and experienced exporters.

The government actively supports and promotes franchising, joint-ventures, and other forms of international business opportunities between Malta-based businesses and foreign companies.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* Source for Host Country Data:

** This include all industries except mining.  The total has been suppressed to avoid disclosure of data of individual companies

Rate of Exchange used $1 = €0.848

Table 3: Sources and Destination of FDI 2017

Table 4: Sources of Portfolio Investment