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Lithuania is one of the newest members of the single currency eurozone, which it joined in 2015. Lithuania now uses the euro (EUR, €) as its official currency and complies with standards set by the European Central Bank (ECB). As part of the EU, Lithuania has adopted and maintains liberal economic policies on foreign direct investment and international money transfers. Lithuania currently has no restrictions on foreign exchange transactions.
As part of the Schengen Area and the single currency eurozone, Lithuania follows EU policies for currency transfers. As part of the single payment eurozone system, money to and from Lithuania can be freely transferred into and out of the country, and there are no restrictions on international money transfers or on currency conversions. The Bank of Lithuania is responsible for overseeing and encouraging efficient, stable operations for incoming and outgoing payments, as well as for the smooth settlement of securities and currency transactions.
Lithuania follows EU banking regulations and anti-money laundering protocols, as well as guidelines set forth by the Eurosystem for financial system payments oversight. The Bank of Lithuania’s Supervisory Service oversees the country’s credit unions and commercial banks, insurance companies, and its securities market.
Lithuania’s recent entry into the single currency eurozone has helped to simplify sending money overseas. After adopting the eurozone’s single payment system, which was introduced in 1999 and is used by all eurozone member countries, currency transactions between Lithuania and other member countries have become less expensive and more streamlined, and the process of transferring funds to and from many countries that are not part of the EU has become simpler, as well.
Lithuania is the southernmost of the three Baltic States, as well as the largest and most populated. It has liberal economic policies in line with those of the EU, and its robust economy helps to attract and encourage foreign direct investment. The most important economic sectors in Lithuania’s economy currently include wholesale and retail trade, transport, accommodation and food services (32.9%), industry (25.1%) and public administration, defense, education, and human health and social work activities (13.7%). The Lithuanian economy was recently one of the fastest growing in the European Union, with a rate of 3.3% of GDP in 2013. In 2014 it dipped to 2.6%, and is expected to continue at this approximate rate into the near future.
Lithuania is ranked 17th out of 189 countries for its ease of doing business, according to the 2014 World Bank Doing Business Report. Its membership in the Schengen Area, combined with the government’s attempts to reduce barriers to foreign investment and offer financial incentives, should continue to contribute to a favorable investment climate for both local and foreign investors.
The Lithuanian government sets few limitations on foreign and domestic investor activities, and provides equal treatment to both. Foreign investors are permitted to reinvest or repatriate their profits without restriction, and the International Center for the Settlement of Disputes is available to hear disputes for both foreign and domestic investors.
The European Central Bank (ECB) sets policy and is responsible for oversight of the single currency euro throughout the eurozone. As one of the newest members of the eurozone, Lithuania follows the monetary policies and guidelines established by the ECB. Regulation of financial settlement systems, oversight of the domestic banking system, and the ongoing monitoring of international money transfers is managed by the Bank of Lithuania.
The country maintains a flat tax rate for corporate income, personal income, and capital gains of 15%. These rates are amongst the lowest in the EU. The government does currently impose a value-added tax of 21%, as well as annual real estate taxes that range from 0.3% up to 3% of the value of the property. For more information on the Lithuanian tax system, please visit the country’s investment website.
Lithuania has privatized most of its previously state-owned enterprises, and today there are few barriers to foreign or domestic entities for establishing, purchasing, or disposing of interests in property and business enterprises. The country maintains robust property protection laws and property rights for foreign and domestic investors.
In 2015, Lithuania entered the eurozone and adopted the single currency euro, greatly simplifying the country’s ability to send and receive payments and currency transfers between the EU and other global locations. The euro is based on a system of 100 cents, with coins distributed in values of 1, 2, 5, 10, 20 and 50 cents, and EUR1 and EUR2. Banknotes are printed in denominations of EUR5, EUR10, EUR20, EUR50, EUR100, EUR200 and EUR500.
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