Transition of industrial zones to free

economic zones in Lithuania

Jurgita Staneikaitė

Head of Investment policy division

Types of industrial zones

Free economic zones (FEZ)

Industrial parks (IP)

Municipal

Private

Public logistic centers (PLC)

Key Milestones

1990 1995 2000 2005 2010 2011 2012

Establishment of Kaunas and Klaipeda FEZs

Lithuania’s membership in EU

Program for 5 new FEZs

Lithuania regained

independence

Law on FEZ

funda-mentals

Selection of Kaunas and

Klaipeda FEZ operators

International tenders

for 5 FEZ operators

Creation of 9 industrial parks

Program for 4 PLCs

Problems of Industrial parks

There are no investors in

regions

There are no new jobs

Work of IP is not efficiant

There are no efploitation of intras- tructure

There are no competition

Klaipėda ir Kaunas FEZ

Advantages of FEZ

• 50 % lower state lease fee

• Full right to sublease the land at market prices to FEZ investors

• Full right to operate the FEZ for 49 years

Benefits for the managing company

• 0% corporate tax for the firs 6 years

• 50% discounton corporate tax over the next 10 years

• 0% tax on dividends

• 0% taxon real estate

• Available EU financial incentives

Benefits for the FEZ investors

Solution

Establish FEZ in teritory of IP

AKMENĖ

KĖDAINIAI

New FEZ

The goals for transition from IP to

FEZ:

Facilitate FDI promotion, technology development

and job creation and reduce regional

disparities

Enhance the attractiveness of the

industrial zones

Effectively use the infrastructure

that has been implemented from

EU structural funds

Increase the efficiency of

management in industrial parks

Procedures for transition of IP to

FEZ

Law on the fundamentals of free economic zones

Separate laws on the establishment of specific zones

Regulation of the Government of the Republic of Lithuania

International tenders

Requirements and application

procedures (I)

Eligible candidates‘ profile:

Individuals

Companies

Subsidiaries/ divisions

Selection criteria:

Quality of a business plan for FEZ management

Initial financial contribution no less then EUR 116,000

Experience in investment

promotion & business consulting

Requirements and application

procedure (II)

The successful bidder will have to:

Establish FEZ management company in Lithuania

Sign a framework agreement on the functioning of FEZ with the

Ministry of Economy of Republic of Lithuania

Requirements and application

procedure (III)

Main responsibilities of a FEZ manager

Creating a strategy for FEZ development

Implementing a sound business plan

Attracting investors

Marketing the FEZ

Subleasing land to companies

Success stories of new FEZ

Tender winners signed the framework agreements on the functioning of FEZ with the Ministry of Economy of

Republic of Lithuania.

Marijampolė free

economic zone

Panevėžys free

economic zone

Kėdainiai free

economic zone

Thank you!