Doing Business 2018: Lithuania – among 20 most business-friendly countries in the world

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2017 11 06

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In the Doing Business 2018 report, published on 31 October 2017, Lithuania ranks16th and is among top 20 of 190 countries in the world. Compared with 2017, Lithuania has improved up 5 positions; it ranked 21st last year. Among the EU Member States Lithuania ranks 6th and is outpacing countries like Ireland (17), Latvia (19) and Germany (20).

In assessing progress based on ten indicators the World Bank has acknowledged that during the period of investigation, Lithuania implemented positive reforms in four areas: dealing with Construction Permits, Getting Electricity, Protecting Minority Investors and Paying Taxes. In the region of Europe and Central Asia, Lithuania ranks 2nd by the number of reforms implemented in the field of improving business conditions.

The World Bank has acknowledged one major reform in Protecting Minority Investors: Lithuania had increased the transparency of enterprises.

‘Following the adoption of amendments to the Law on Financial Statements of Entities, from 1 January 2017, public limited liability companies and private limited liability companies shall disclose information about the managing positions and the main workplace of their manager and members of the board. This amendment helps improve the Doing Business’ Protecting Minority Investors indicator, ensure greater transparency in corporate governance and prevent the conflict of interest of the manager and members of the Board,’ said Vice-Minister Lina Sabaitienė.

In the rating of business conditions in the countries of the world, Lithuania holds the top positions in the field of Registering Property (the 3th position) and also ranks high in the field of Enforcing Contracts; the court proceedings index has also increased. 

The main breakthrough of this year —a rise by as many as 22 positions —  was achieved in Getting Electricity, where Lithuania upped from the 55th to the 33rd position. The Ministry of Energy has simplified the process of connecting consumer electrical installations to the electricity grids; now, when new users sign a connecting service contract with the distribution grid operator they are therefore offered the services of the electricity grid project preparation and the connection to the grids. Moreover, with the reduced tariffs for connecting new users to the electricity grids by the National Control Commission for Prices and Energy the costs of connecting to the electricity grids have been reduced.

Reforms in the field of paying taxes have contributed much to the overall rise of Lithuania’s position in the Doing Business 2018 ranking; the World Bank has estimated that e-declaration and payment of taxes has helped a medium-sized enterprise shorten the time of declaration and payment of the VAT, the corporate profit tax and social security contributions by 61.7 hours (36%). This IT solution has helped Lithuania go up from the 27th to the18th position. 

The World Bank has also assessed the reform implemented in the construction sector. With the enactment of the new version of the Law on Construction from 1 January 2017, the time required to obtain technical conditions for construction and to issue the construction permits was reduced. The duration of the preparation of construction-related permit issue procedures was reduced by 28 calendar days (up to 75 calendar days), which led to Lithuania’s move up to the 12th position in Dealing with Construction Permits. 

The Ministry of Economy, the World Bank’s coordinator in Lithuania, is discussing with the World Bank about its methodology and the reforms implemented by Lithuania as well as is analysing the most sensitive areas in the World Bank’s report and is making proposals to responsible authorities. To improve business environment and Lithuania’s position in the Doing Business rating measures are foreseen in the Plan for the Implementation of the Government Programme for 2017–2018 in the regulatory areas of the Ministry of Energy, the Ministry of Economy, the Ministry of Transport and Communications, the Ministry of Justice and the Ministry of Finance. 

In the World Bank’s survey Doing Business 2017, for several successive years, the most business-friendly countries remain New Zealand, Singapore and Denmark.  

Ranking positions in Doing Business 2018: New Zealand – 1st, Singapore – 2nd, Denmark – 3rd, S. Korea –4th, Hong Kong (China) – 5th, the US – 6th, the United Kingdom – 7th, Norway – 8th, Georgia – 9, Sweden – 10th, Macedonia – 11th, Estonia – 12th, Finland – 13th, Australia – 14th, Taiwan (China) – 15, Lithuania – 16th, Ireland – 17th, Canada – 18th, Latvia – 19th, Germany – 20th.