Development of the Legal Bases Regulating Foreign Investments in the Republic of Lithuania and its Influence on the Process of Investments
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Abstract
The principal legal acts that regulate foreign investment in Lithuania are considered in the period since the restoration of independence up till the present time. Conditions and privileges for foreign investors legalized by laws are expounded as well as the measures for encouraging foreign investments in Lithuania are discussed. Based on the statistical data, the influence of these measures on the development of foreign investments in Lithuania and the prospects of foreign investments in the context of integration into the European Union are analyzed.
The significance of foreign capital investment for the Lithuanian economy has been perceived since the restitution of independence in Lithuania. One of the first laws adapted by the then Supreme Council of Lithuania was a law that regulates foreign capital investment in the country. The development of foreign investment legislation in Lithuania includes the following stages:
1. On December 21, 1990, the Seimas of Lithuania adapts a law of foreign investment in the Republic of Lithuania [1]. The basic rules (regulations) of which remain valid in later laws;
2. On June 13, 1995, a new law of the Republic of Lithuania on foreign capital investment came into force [2] that specified and concretized the rules of the former law, later supplemented with amendments which allowed the compatibility of this law with that of the EU.
3. In 1997, a draft law on investment was prepared and submitted for consideration at the
Seimas of the Republic of Lithuania [3]. It regulates the activities of all investors, both of the century and foreign ones in Lithuania. It came into force on July 1999 and is still valid so far.
In the beginning these laws provided considerable privileges of foreign investors, which were decreasing in number gradually until national regime for the foreign investments was determinate in 1999 with the coming into force the Investment Law of the Republic of Lithuania. Foreign capital investment in Lithuania began in 1987 with the establishment of the first joint Lithuanian–Hungarian enterprise „Liettara–Volanpak“. At first the flow of direct foreign investments (DFI) was varying but insignificantly. In 1993, the value of DFI in real prices made up 34 million USD, in 1994 – 31 million USD, and since 1995 it has been yearly increasing more than twofold. In 1995, GFI amounted to 73 million USD, in 1996 – 153 million USD and constant by increased further until to 446 million USD at the end of 2001. The higher increase in foreign investments is connected with privatization of Lithuanian telecommunications in 1998 and two more large-scale enterprises „Mažeikiai oil“ and „Lithuanian insurance“.
The significance of foreign capital investment for the Lithuanian economy has been perceived since the restitution of independence in Lithuania. One of the first laws adapted by the then Supreme Council of Lithuania was a law that regulates foreign capital investment in the country. The development of foreign investment legislation in Lithuania includes the following stages:
1. On December 21, 1990, the Seimas of Lithuania adapts a law of foreign investment in the Republic of Lithuania [1]. The basic rules (regulations) of which remain valid in later laws;
2. On June 13, 1995, a new law of the Republic of Lithuania on foreign capital investment came into force [2] that specified and concretized the rules of the former law, later supplemented with amendments which allowed the compatibility of this law with that of the EU.
3. In 1997, a draft law on investment was prepared and submitted for consideration at the
Seimas of the Republic of Lithuania [3]. It regulates the activities of all investors, both of the century and foreign ones in Lithuania. It came into force on July 1999 and is still valid so far.
In the beginning these laws provided considerable privileges of foreign investors, which were decreasing in number gradually until national regime for the foreign investments was determinate in 1999 with the coming into force the Investment Law of the Republic of Lithuania. Foreign capital investment in Lithuania began in 1987 with the establishment of the first joint Lithuanian–Hungarian enterprise „Liettara–Volanpak“. At first the flow of direct foreign investments (DFI) was varying but insignificantly. In 1993, the value of DFI in real prices made up 34 million USD, in 1994 – 31 million USD, and since 1995 it has been yearly increasing more than twofold. In 1995, GFI amounted to 73 million USD, in 1996 – 153 million USD and constant by increased further until to 446 million USD at the end of 2001. The higher increase in foreign investments is connected with privatization of Lithuanian telecommunications in 1998 and two more large-scale enterprises „Mažeikiai oil“ and „Lithuanian insurance“.
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