By Steve Taggart
It is easier to start a business in Lithuania than the UK, according to the latest Global Competitiveness Report from the World Economic Forum (WEF). It takes almost twice as long to start a business in the UK (12 days) as compared with Lithuania (6.5 days).
The yearly report is regarded as a barometer of business competitiveness and rates 144 economies across over 100 global rankings: from property rights, to tax rates and the level of local competition.
This year’s study is the 35th since it was launched by the international organization, famous for its annual gathering in Davos, Switzerland.
The unfavourable comparison with the Baltic State does not end there. Lithuania is also far less bureaucratic than the UK: according to the WEF it takes an average of four procedures to set up a business there, versus six in the UK.
Lithuania, which regained its independence from the Soviet Union in 1990, has a population of fewer than 3 million people and is due to join the Euro Zone on January 1st, 2015.
The fast developing country has experienced strong growth in the last two decades and is the largest economy out of the three Baltic States.
Growth has been driven in part by the country’s ultra-competitive tax rates, which include a six-year corporation tax break for investors putting money in the country’s Special Economic Zones. By contrast, the UK corporate tax rate stands at 20% for businesses with profits of £300,000 or less.
ICT, outsourcing, manufacturing and life sciences are just some of the industries that have grown in recent years – driven in large part by the country’s well-educated English speaking population, of which 93% has a secondary or higher degree.
Only about 40% of British students go on to post-secondary education, while 75% of Lithuanian school-leavers pursue further studies. (Source: Statistics Lithuania, 2013).
Arvydas Arnasius, Managing Director of Invest Lithuania, the government agency which offers guidance to investors, said:
“Britain is to be admired for many things, including its football clubs and music industry, but when it comes to starting a business there are a few things Lithuania can teach the country which gave the world Adam Smith.
“With the one of the lowest tax rates in the European Union, an ideal strategic location between three huge markets and well-developed infrastructure, Lithuania is a very easy place to start a business and help it grow.