Swedish Business Leaders on Lithuania: delayed payments, low wages, lack of flights

Leaders of Swedish companies operating businesses in Lithuania say that the country’s employees are ambitious, well-educated and hardworking, but lack specialties in specific fields. These findings come from the research made by the Swedish Embassy and the Swedish Trade Council Office, delfi.lt reported on 23 August.

The leaders of these Swedish companies believe they can find a competent work force, low operating costs and a convenient geographical location within Lithuania. Executives are attracted to Lithuania because of its good economic growth prospects. Lithuania’s well-developed information technology infrastructure has received a great deal of compliments, including remarks made by the Swedish Ambassador to Lithuania, Cecilia Ruthstrom-Ruin.

Expects less government intervention

However, the survey also reflected the negative aspects of the Lithuanian business environment. Swedish investors say that if Lithuania’s tax system were simplified and stabilized, payments made faster, and labour relations more liberalized, then Lithuania would be the best country in which to invest.

In addition, there is the complaint that the air transport between Lithuania and Sweden is inadequate. The litigation and decision systems and access to free capital were also criticized.

The majority of Swedish entrepreneurs operating in Lithuania are encouraged to invest in the country because of its stable political situation, profitable local market, and business startup ease. The Swedes are pleased that it is easy to find business partners in Lithuania, but mention that there exists the possibility of being deceived by these partners.

Although the entrepreneurs said that the problem of corruption still exists in Lithuania, only a few had encountered it personally. When asked if they had been offered a bribe within the last year, 85% of the respondents said “no.” One of the respondents said that, in his opinion, 9 out of 10 public procurements are “clean.”

However, when asked whether competitors use corruption tools to win public procurements, 46% answered positively. Swedish business leaders are pleased that the political system in Lithuania is relatively stable, but argued that government intervention is still heavy-handed. It is expected to loosen; for example, a fast tax reform was delivered, which was never expected to become a reality.

There is a constant price war

Eighty-nine percent of the surveyed investors from Sweden said that Lithuanians are hard working. Eighty-six percent of entrepreneurs believe that the Lithuanian employees are easy to train. Sixty-two percent of employers say that employees in Lithuania are loyal.

However, Lithuanian employee creativity and initiative were evaluated poorly: 49% said Lithuanians are creative and 41% said they show initiative. Entrepreneurs say that they face strong competition in Lithuania (57%), while only 5% stated that it is small. Investors from Sweden say that Lithuania is constantly involved in a price war.

Anyone can take someone to court without consequences

Although, investors in Lithuania say that there is no high bureaucracy in the country, they still have to complete much paperwork. Sixty-six percent of Swedish entrepreneurs in Lithuania believe that Lithuanian companies are only partially complying with the law.

The Lithuanian tax system received little in the survey. Fifty-four percent of investors stated that the tax system is quite good, 27% that it is good, 14% – weak, and 5% – bad. Twenty-five percent of Swedish businesspersons in Lithuania do not trust the dispute resolution system. One of the respondents noted, “In Lithuania, anyone can take someone to court without any consequences.”

Fifty-nine percent of Swedish investors find it easy to set up companies in Lithuania. When asked about the productivity and wage ratio, 49% of business owners said that it is balanced. However, 41% said that the salary level is too low in this country. The interviewed Swedish business leaders said they are planning to invest 230 million Litas into the country this year. More than 30% of the Swedish companies’ leaders running businesses in Lithuania were interviewed. Currently, 130 Swedish companies are active in Lithuania.

Translated by Sandra Dijokaitė
Edited by Anika Brandt