Production facilities in the EU. Company and business registration in Europe

The European Union’s single market of 500 million consumers looking for quality goods and services and 21 million small and medium-sized enterprises (SMEs) is the World’s most ambitious trade co-operation and the biggest player on the global trading scene. This is the main reason why European Union considered as one of the world’s best regions to do business. The European Union is the world’s biggest trading block, accounting for 16.5 % of the world’s imports and exports. Free trade among its members was one of the European Union’s founding principles and it is committed to liberalising world trade as well. The EU is the world’s biggest exporter of manufactured goods and services and it is the biggest import market for over 100 countries.

Special Free Economic Zones in the European Union

Many countries around the world have set up free trade and economic zones as a way to accelerate the economic development of regions, manage post-industrial property and infrastructure, create new jobs and attract foreign investors. Only few European Union member states have Free Economic Zones inside the World’s biggest trading block and single market.

To boost its competitiveness, the Government of EU member state – Lithuania has established special incentives for both foreign and domestic investors. The basic benefit of investing in a Free (Special) Economic Zone is the possibility of obtaining a tax allowance consisting of a corporate income tax exemption. Lithuania’s six Free Economic Zones are located in the country’s economic centres – Marijampolė, Kaunas, Kėdainiai, Panevėžys, Šiauliai, Klaipėda – and provide favourable conditions for developing business by offering ready to build industrial sites for “green field” investments with physical and other infrastructure, support services and tax incentives.

Today, the Lithuanian legal regulation of Free Economic Zones is among the most favourable in Europe, which means that the production companies set up in Lithuanian Free Economic Zones have significant competitive advantage and opens up European single market at a significantly lower production, operational costs.

Benefits for the Free Economic Zones investors

– 0% corporate tax for the first 10 years;
– 50% discount on corporate tax over the next 6 years;
– 0% tax on dividends;
– 0% tax on real estate;
– available EU financial incentives.

TaxIn Free Economic Zone territoryGeneral rate in Lithuania
Corporate tax0% (first 10 years)15%
Corporate tax7,5% (other next 6 years)15%
Real estate tax0%1%
Dividend taxation0% (for foreign investors)15% for individuals

Free movement of goods, capital, services and labour in the EU

The European Single Market, Internal Market or Common Market is a single market which seeks to guarantee the free movement of goods, capital, services, and labour – the “four freedoms” – within the European Union (EU). The EU is also a customs union. The countries club together and agree to apply the same tariffs to goods from outside the union. Once goods have cleared customs in one country, they can be shipped to others in the union without further tariffs being imposed.

Freedom of movement allows citizens of the European Union to move to, live in, and in certain circumstances access the welfare system of the European Union country to which they have moved.

Free movement of capital enables a better allocation of resources within the EU, facilitates trade across borders, favours workers mobility, and makes it easier for businesses to raise the money they need to start and grow.

Restrictions on freedom to provide services within the Union are prohibited in respect of nationals of Member States who are established in a State other than that of the person for whom the services are intended. Any discrimination concerning the provision of services on the basis of nationality is prohibited.

Other reasons why European Union is an attractive market to do business:

– EU – is the world’s largest single market with transparent rules and legal environment;

– A secure legal investment framework and the EU’s services markets are highly open and the EU has arguably the most open investment regime in the world.

– EU is one of the most open market to developing countries in the world;

– A stable investment environment with strong technologies, educated and skilled labour force;

– The average applied tariff for goods imported into the EU is very low. More than 70% of imports enter the EU at zero or reduced tariffs;

That is why the EU ranks first in both inbound and outbound international investments and it is the top trading partner for 80 countries. By comparison the US is the top trading partner for a little over 20 countries.

Lithuania is the best choice for doing business in Europe 

The reasons why Lithuania is one of the best countries in European Union for doing business in Europe:

– Looking from the perspective of logistics, Lithuania is a truly convenient country. All European capitals, for instance, can be easily reached from Lithuania by making a two-three-hours flight and not longer. Rail, sea transportation systems and the road transport system are extremely well-developed in Lithuania as well.

– The highest internet data transfer rate as compared to the rest of the EU and an excellent access to fiber-optic Internet technologies make Lithuania a perfect location for international business.

– Lithuanians speak at least one foreign language, and even a half of the inhabitants of Lithuania speak at least two languages. 80% proficiency in English among young professionals.

– Many qualified and motivated professionals are currently working in Lithuania. For this reason the effectiveness of this country and the quality of life are increasing rapidly.