What could a small European country by the Baltic Sea and a G7 country that’s more than 150 times larger and spans the Atlantic and Pacific oceans possibly have in common? Plenty, as it turns out, with innovation being one.
But let’s start at the beginning. Lithuania and Canada have been close partners for decades — this year will mark the 30th anniversary of restored diplomatic relations between the two countries. We have many bilateral cultural and political ties, too, but for now, we’ll turn to trade, which is relatively low, but diversified and constantly growing.
In 2020, the trade turnover with Canada reached $213.5 million, with total Lithuanian exports to Canada amounting to $180.6 million, and imports from Canada at $33 million. The CETA agreement has opened new corridors for collaboration and Lithuania is a strong contender to become an entry point for Canadian companies to trade in the European Union.
The current bilateral trade landscape does not reflect the existing potential and possible future of bilateral economic co-operation. Traditionally, Lithuanian exports to Canada consist mainly of mineral fuels, oils and bituminous materials, wood and products — primarily furniture — timber, bedding and other fabrics, while Canada exports ground vehicles, airplanes, electrical machines and parts.
Untapped potential remains in the innovation sectors of fintech, ICT, cybersecurity, life sciences, defence technologies and startup ecosystem development.
Lithuania is a reliable member of the EU and part of the NATO and OECD family. In other words, Shakespeare’s to be precise, it is “small but mighty.”
For the past several years, the country has been ranked in the Top 10 on European and world indexes for ICT, fintech and other innovative sectors. While the population is comparatively small at three million, the talent pool has been recognized by foreign companies establishing in Lithuania and it offers the benefit of flexibility and fast adoption of innovations.
Lithuania is a recognized fintech hub and among the most attractive jurisdictions in the EU. The Lithuanian fintech sector grew by 45 per cent in 2018, with 230 fintech companies operating in the country. Our regulatory environment and the benefits it offers have been acknowledged by startups and world-class fintech companies. A fast-track licensing program by the Bank of Lithuania has attracted bigname players such as Revolut, Google and TransferGo. The Bank of Lithuania offers the fastest licensing processes in the EU and additional supports for foreign companies, namely our Newcomer program, Regulatory and Blockchain sandboxes, RegTech and SupTech solutions.
Lithuania’s life sciences industry has been skyrocketing over the past two decades and is now regarded as one of the most advanced in Central and Eastern Europe, registering 25-per-cent annual growth within the biotechnology and pharmaceutical research and production sector, with about 90 per cent of the production being exported. Indeed, $923 million worth of goods were exported in 2020. Life sciences constitute approximately two per cent of GDP, which is six times more than the EU average, with a goal to reach five per cent of GDP by 2030, with investments from the government. Lithuania is a perfect place to discover state-of-the-art scientific infrastructure and investor-ready startups in the Baltics. The success of the Lithuanian biotechnology industry starts with the well-developed educational system involving professional academic institutions and 16 open R&D centres. This year, Life Sciences Baltics 2021 Digital Forum, the largest life sciences event in the Baltic countries, will take place in our capital of Vilnius, and will bring together the brightest minds in the field from across Europe and beyond to put ideas into motion and turn connections into impactful projects.
Lithuania is also active in ensuring an attractive bureaucratic environment for foreign investors to establish in the country. Newly adopted legislation — the Green Corridor — offers significant tax incentives and dramatically cuts red tape, making it quicker and easier for international businesses to establish and grow large-scale operations in Lithuania. The new rules will reduce the administrative burden on business and the number and duration of required steps and will create favourable conditions for starting and developing activities and attracting domestic and foreign large-scale investment projects. For manufacturing companies, a wide network of Free Economic Zones provides tax incentives and fast-track incorporation. It’s a program that attracted companies such as Hollister Incorporated, Hella and Continental, among others.
In many cases, Lithuania should be considered as the best entry point to the EU market. With many opportunities aligning with Canadian federal as well as provincial interests, the opportunities for collaboration are plentiful.
Darius Skusevicius is Lithuania’s ambassador to Canada. Reach him on LinkedIn, by email at amb.ca@urm.lt or by phone at (613) 567-5458.
