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Learn more about doing successful business in Lithuania. This page has information about Lithuania’s economy, history and even some useful Lithuanian phrases. Expand your international business expertise with Lingo24’s International Business Knowledge Base.

Facts & figures

Lithuania is the largest of the three Baltic States, the other two being Latvia and Estonia. Extending to 65,300 sq. km, it is a larger country than Belgium, Denmark, the Netherlands or Switzerland – 70% being made up of arable land and 27.6% of forest, predominantly pine. The countryside is a mixture of lowland plains and hilly uplands, and some 2,800 lakes occupy 1.5% of the country, with a total of 722 rivers running through the region.

Forests and lakes are central to the Lithuanian identity, and indeed many Lithuanians own log cabins in the countryside. There are several national parks which are the focus of increasing ecotourism, in particular in the forests in the South-East of the country. This affinity with the land means that most Lithuanians are excellent berry and mushroom pickers. Lithuania also has 99 km of Baltic Sea coastline which is devoted to a combination of leisure and conservation.

The climate is midway between maritime and continental, and the growing season varies between 169 and 202 days. In January the average daytime temperature is -5°C (23°F), rising in July to +23°C (80°F).

Major cities

Vilnius (capital – 542,300 inhabitants); Kaunas (378,900); Klaipeda (192,900); Šiauliai (133,900); and Panevežys (119,700).

The capital city, Vilnius, was founded in the fourteenth century. Owing to Lithuania’s troubled history, the city has been subject to multiple cultural influences down the centuries and is more diverse than the rest of Lithuania, with ethnic Lithuanians representing just over half of the city’s population. Architecturally, Vilnius Old Town spans every period from the Middle Ages onwards, although Baroque and Rococo are particularly prominent.

Population

Lithuania is home to 3.5 million people, with 67% living in urban areas and 33% in rural areas. The population density is 53.5 people per sq. km and the ethnic composition is: 83.5% Lithuanians, 6.7% Poles, 6.3% Russians, and 3.5% people of other nationalities (Byelorussians, Ukrainians, Latvians, Jews, etc.).

Main religion

Roman Catholic. As in Poland, the Catholic religion acted as a key vehicle of Lithuania’s national reawakening and its breakaway from the Soviet regime in the late 1980s.

Major industries

Lithuania has the largest and most diversified economy of the three Baltic states. Intensive industrialisation under the Soviet regime resulted in enterprises specialising in electronics, chemicals, machine tools, metal processing, construction materials and food processing. Light manufacturing includes the production of textiles, ready-to-wear clothing, furniture and household appliances, although the textile sector is starting to suffer from competition by lower cost bases. Since 1990, the economy has attracted substantial investment, both “brown-field” and “green-field”. Large-scale privatisation of many of the larger formerly state-owned enterprises and an improved infrastructure have also boosted investment and modernisation.

Services are the fastest-growing segment of the Lithuanian economy, reflecting the structural changes that the country has been undergoing. Transport and transit services are dynamic, with a good road system (improved with EU investment), as well as the Baltic states’ only oil pipeline and refinery. Trading and retail are also growing fast, although there is increasing competition in this market. Financial services are expanding rapidly, and the use of banking services, having remained low during Lithuania’s first decade of economic change, has grown exponentially in recent years, both among companies and individual consumers. In the financial retail segment, mortgage lending is the most dynamic area, in turn fuelling solid growth in the construction and real estate markets. Finally, tourism has emerged as another fast-growing service industry, underpinned by the historic heritage of Vilnius, Kaunas and Klaipeda as well as by the potential for ecotourism and by Lithuania’s spa tradition.

The Lithuanian economy is very open, and Lithuanian exports tend to have a high import content – which means that Lithuania is an attractive market for foreign exporters of intermediate and investment goods. In recent years, Lithuania has also been an attractive destination for foreign exports of retail goods, due to a sustained consumption boom.

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Main players

By far the largest Lithuanian company and exporter is Mazeikiu Nafta (MN), who own and operate Lithuania’s oil pipeline and refinery, as well as the Butinge petroleum export terminal, situated on the coast. MN is jointly owned by Russia’s Yukos and the Lithuanian state, but ownership is expected to change due to Yukos’ withdrawal from the market. Other sectors with large players include the electricity network (some of which has been privatised), telecommunications (dominated by Lietuvos Telekomas), the food industry (particularly dairy products and beer) and banking (dominated by Vilniaus Bankas and Hansabankas, both controlled by Swedish banks). However, Lithuania’s economic growth is broad-based and not dependent on the performance of a small number of enterprises. The SME sector is large and vibrant.

The Lithuanian Development Agency (www.lda.lt) is responsible for investment and export promotion. The main business organisations are the Confederation of Lithuanian Industrialists (www.lpk.lt), the Lithuanian Business Employers’ Confederation (www.ldkonfederacija.lt), the Association of Lithuanian Chambers of Commerce, Industry and Crafts (www.chambers.lt). The main EU countries also have Chambers of Commerce in Lithuania.

Things not to do

Lithuanians are generally easy-going, although they may be reserved at first contact. Business customs are similar to those in Western Europe, so there are no major pitfalls to avoid. However, most westerners have little understanding of the specificity of Lithuania’s cultural heritage and the complexity of its history, and indeed many assume that Lithuanians speak Russian. This can be offensive to Lithuanians, who have a deep sense of nation and see themselves as Western Europeans. Show interest in the culture and history, and avoid taking sides in any historical debates involving Polish or Russian conquests or territorial claims.

Things to bear in mind

Lithuanians are hard-working, and office hours are longer than in many parts of the EU (generally 8 am to 6pm). The international language of choice is English; most Lithuanians older than thirty also learnt Russian but could be reluctant to use it. The main holiday period is July/August. The Catholic holidays are also observed (especially Easter), as is independence day (February 16).

The national sport is basketball, which is an excellent talking point. The Lithuanian team is one of the best in the world. It is an Olympic bronze winner, and one of the select few to have beaten the U.S. national team. Lithuanian cuisine is northern European with some Russian and Polish influences. However, both Vilnius and Kaunas boast a good range of international restaurants, and business contacts are more likely to invite their guests for international cuisine than traditional fare. It is possible to find vegetarian options, but less easy than, say, in the UK.

Key dates

  • 1009 – First historical mention of Lithuania
  • 1253 – Coronation of Mindaugas, the first Lithuanian king
  • 1569 – The Union of Lublin: creation of a united Polish-Lithuanian commonwealth
  • 1795 – Annexation of Lithuania by Russia
  • 1918 – First declaration of independence (February 16)
  • 1940 – Occupation and annexation by the Soviet Union
  • 1941-1944 – German occupation and genocide
  • 1944-1953 – Re-annexation, repression and deportations by the Soviet Union
  • 1990 – Second declaration of independence (March 11)

 

The Lithuanian nation has a long, proud but tormented history, which still has a bearing on the country and its people today. Independent until the late sixteenth century, Lithuania subsequently suffered from domination and/or conquest by both Poland and Russia. The nineteenth century saw a national reawakening, which culminated in a declaration of dependence from Russia in 1918. Lithuania was independent and thrived during the interwar period, but was once again conquered by Russia in 1940. When Hitler invaded the USSR in 1941, Lithuania was temporarily ‘liberated’, but this period led to the extermination and/or deportation of the country’s large Jewish community (Vilnius had hitherto been a key cultural centre for European Jews). The Nazi defeat brought Lithuania back under Soviet domination, and Stalin’s last years were marked by mass deportations of Lithuanian partisans and their families to Siberia. Most Lithuanians today have at least one relative who died during this period. In the wake of perestroika, Lithuania was the first Soviet Republic to question the survival of the USSR and declare independence once again.

Language

The official state language is Lithuanian, which belongs to the Baltic family of Indo-European languages. The only other surviving language from this family is Latvian. Lithuanian is considered to be the living language closest to Sanskrit. Grammatically, it is similar in complexity to Latin.

Glossary

  • Hello – Labadiena
  • Good morning/evening/night – Labas rytas/labas vakaras/labanaktis
  • Goodbye – Viso gero
  • Pleased to meet you – Malonu
  • Please (yes please) – Prašau (prašyciau)
  • Thank you (no thank you) – Aciu (ne, aciu)
  • Cheers (when drinking) – I sveikata!
  • See you again soon! – Iki pasimatymo!

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