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Zero corporate tax rate extended to 10 years at Klaipeda FEZ

05 Jan 2018

The Lithuanian parliament has adopted legislative amendments that will enable the free economic zones (FEZ) established in Lithuania to be among the most competitive in Europe. These amendments extend the period that companies operating in Lithuania’s free economic zones can enjoy a 0 percent income tax rate from 6 to 10 years, and also add a 50% corporate tax reduction (7,5 percent) for a further 6 years.

Furthermore, a limitation on the list of business activities for manufacturing companies will no longer be applied and the newly established companies in the FEZ will be able to enjoy FEZ exemptions, Lithuania’s Ministry of Economy has announced.

The amendments to the Law on the Fundamentals of Free Economic Zones and the laws on individual free economic zones also allow companies established in these zones to lease land plots for 99 years.

Following the completion of the land lease period, a company will now have the right to lease the plot directly from the state, instead of subleasing it from the FEZ management company. These changes will ensure that FEZ companies will be able to continue their operations without interruption once their lease period has ended.

Eimantas Kiudulas, CEO of Klaipeda FEZ, is convinced that these changes can only add to the components that define a great FEZ, which include the speed of business launch, infrastructure and human resources. As such, he is sure that the extension of the corporate-tax-free period within Lithuanian free economic zones will only serve to further boost and strengthen the attractiveness of Klaipeda FEZ.

“This is great news for Klaipeda as we can now offer the perfect combination for investors: an award-winning set up speed for commencing operations, state of the art infrastructure, access to sea/road/rail, a 150000-strong and very livable university city, an ecosystem of leading businesses and now a 10 years tax-free environment with 6 years of a reduced corporate tax rate. For this reason, we applaud the decision by the Ministry of Economy and Seimas to improve our legal environment, thus further boosting Lithuania’s competitiveness in and beyond Northern and Eastern Europe,” Mr Kiudulas said.

Klaipeda FEZ has been operating since 2002 and was the first of the six free economic zones currently operating in Lithuania. The FEZ has an area of 412 hectares and hosts companies engaged in the production of plastics, electronic devices, and steel structures, as well as energy and metal processing companies.

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