Changes to the Lithuanian Investment Law: new possibilities for foreign investors to get temporary residence permits in Lithuania

On 15 June 2021, certain amendments to the Investment Law and other laws and regulations of the Republic of Lithuania took effect to set forth more favourable conditions for foreign investors to relocate to Lithuania and for their employees and family members to get employment and residence permits in Lithuania.

Why are the amendments made?

Such amendments, which are also called a “relocation package”, have been adopted considering pandemic consequences and political situation in the neighbour countries.

On the first hand, they are aimed at increasing the scope of investments in Lithuania. The relocation package should balance the economic downturn in Lithuania and should compensate the decrease in domestic investments. As a result of the pandemic situation, international supply chains have started to crash, which has triggered debates in the European Union about possible relocation or repatriation of manufacturing facilities closer to the European Union market because such changes are important to the service sector as well.

On the other hand, political uncertainty in Belarus, which has been going on for almost a year, encourages companies of that country to relocate their businesses to other countries. Consequently, the amendments are also aimed at increasing Lithuania’s competitiveness against other countries by attracting Belarusian companies to Lithuania.

These objectives are pursued by facilitating the transfer of all or part of the company’s business and employees from other countries to Lithuania by way of reducing formal and bureaucratic requirements and making it easier for employees and their family members to get employment.

Who will benefit from the amendments?

Special arrangements for relocation will apply to foreign investors provided that:

• An investment agreement is concluded between the investor and the Lithuanian Government/an institution authorised by the Government in accordance with the laws and regulations to set forth special conditions for investment and business,
• Under such investment agreement, the investor makes private investments for at least EUR 1 448 100 in the investment project,
• The investor undertakes to invest in the creation of new workplaces in Lithuania with an average monthly salary to individuals employed under employment agreements being no less than 1.5 average monthly wages last published by the Lithuanian Department of Statistics to apply before the date of the investment agreement in the municipality receiving such investment,
• The investor undertakes to create at least 20 workplaces and to maintain them for 3 years,
• The annual income of the group of companies, to which the investor belongs, and/or of the companies, in which the investor holds the controlling interest, and/or the annual income of the investor in at least one financial year has been no less than EUR 2 500 000 over the recent 3 years.

The investment agreement concluded with the investor will have to lay down not only the conditions for the contract performance and other conditions required by law, but also the timing requirements for foreign citizens to apply for a temporary residence permit on a preferential basis, as well as the number of such foreign citizens.

 Easier employment of foreign citizens:

If the company meets the above criteria, it will enjoy simplified conditions, grounds, and procedures for employing foreign citizens.

A temporary residence permit in Lithuania may be issued to the foreign citizen who satisfies at least one of the following conditions:

• he/she has been employed by an investor/its group of companies for at least 3 months before the date of the investment agreement, and the investor make a commitment to employ him/her in the workplace created under the investment agreement for a period of at least 1 year, or
• he/she has been employed by an investor/its group of companies for at least 3 months before the date of the investment agreement and on the date of the investment agreement has been employed in the workplace created under the investment agreement,
• he/she is an investor/its participant holding at least 1/10 of the subscribed capital of the Lithuanian company expected to create workplaces in Lithuania under the investment agreement, and whose investment in that company amounts to at least EUR 14 000, or
• he/she is a family member of any of the above.

Whether the foreign citizen meets at least one of the above conditions will be determined and confirmed by the public institution authorized by the Minister of Economy and Innovation of the Republic of Lithuania.

The eligible foreign citizen will be able to start to work during the period of his/her legal stay in Lithuania from the date of applying for a temporary residence permit.

For the temporary residence permit to be issued, no compliance of such foreign citizen with the labour market needs or his/her educational background, qualification or work experience will be considered, and such foreign citizen will be exempted from the obligation to obtain a work permit.

Such amendments will also set more favourable conditions for family members arriving to live in Lithuania together with the eligible foreign citizen. Family members of such eligible foreign citizen will be able to apply for temporary residence permits concertedly with the latter, or it will be possible for any adult family member to apply individually, in which case a temporary residence permit will be issued to him/her for the same duration, for which the temporary residence permit has been issued to eligible foreign citizen. It is important to note that such family member will be allowed to work without a separate work permit and without taking into account whether he/she responds to the labour market needs.

The temporary residence permit will be issued/replaced for three years, or if the work in Lithuania continues for less than three years – for the duration of such work in Lithuania. Nevertheless, the period of validity of the temporary residence permit may not exceed the period of validity of the investment agreement.

Published by Senior Associate Artūras Tukleris and Associate Kseniya Veličkienė.