Improving investment climate in Lithuania: shadow economy and labor regulations

ruta.jpgMost of the companies doing business in Lithuania have heard of “Investors' Forum”. It is a voluntary, independent and self-managed business association of the largest and most active investors in Lithuania. On 20th of February EBN members and its guests had an opportunity to learn more – the executive director Rūta Skyrienė prepared a presentation, in which she talked about the “Investors' Forum” inner workings and the investment climate of Lithuania in general.

R. Skyrienė started with a slide, in which it was explained that the association has been working for over 15 years and has over 50 members, which all together employ about 26 thousand people.

“Investors' Forum” has five working groups: on business ethics, energy, labor relations and migration, taxes and communication.  It organizes regular meetings with government, authorities and politicians. In addition, traditional meetings for its members are also held.

The vision of “Investors' Forum” is for Lithuania to have the most investor friendly business climate in the European Union. The association is seeking to achieve this by constantly striving to improve the business environment and investment climate in Lithuania, through cooperation with public institutions and the business community.

Target audiences

“Investors' Forum” talks to the Lithuanian president, government, ministries and parliament members. Also, other decision makers, regulators, public institutions, business society, embassies, municipalities and even society and of course investors are invited to participate in the public conversation about improving conditions for business in the country.

R. Skyrienė emphasized that her organization’s goal is not to attract investors to Lithuania (this is the task for “Invest Lithuania”), but to improve environment for Lithuanian economy growth as a whole.

Main problems

As many members of the gathered audience at the “Holiday Inn” knew, Lithuania recently had been bumped in the “Doing Business” index from the 27th to 17th place. However, R. Skyrienė noted that this was only because the organization did not include labor regulations into account.

According to her, precisely labor regulations are one of the main problems, preventing Lithuania from improving its business climate even further.

Others include corruption, tax system stability, controlling institutions and some more.

R. Skyrienė also addressed the issues of transport infrastructure, namely airlines, and cap on social insurance payments.

Furthermore, shadow economy remains probably the biggest problem, constituting about a third of countries GDP. Representative from “Investors' Forum” urged Lithuania’s government to combat smuggling, tax avoidance and other illegal activities even more than before.

EBN reporter Edgaras Savickas