Spotlight on Lithuania

Aerial view of Vilnius, capital city of Lithuania

Lithuania, one of the fastest-growing countries in the European Union, is increasingly attracting the interest of multinational companies (MNCs), thanks to its highly developed talent pool, sophisticated infrastructure, digital readiness, gender equality, cost-effectiveness and business-friendly environment. Yet the market still remains largely unsaturated and the country’s full investment potential has yet to be explored.

Why Lithuania?

  • Lithuania’s workforce has earned a stellar reputation for innovation and ranks fifth in the world for digital skills, according to the IMD World Competitiveness Center
  • The country’s technology and e-infrastructure ecosystem is EU-leading, ranking highly for ICT, bandwidth, fiber optics, internet speed and cybersecurity protection
  • The physical infrastructure of Lithuania offers investors a broad range of convenient, high-quality logistics options for streamlining supply chain operations and accessing markets in Northern Europe, Western Europe and Asia.
  • Lithuania’s population is largely bilingual, with approximately 85% of young professionals proficient in English. More than half (56%) of the 25–34-year-old population has received higher education. 

How have foreign investment trends in Lithuania changed in recent years?

Due to its relatively small population size, Lithuania was often overlooked for investment and expansion in the past. However, MNCs are increasingly noticing Lithuania’s untapped potential, particularly in innovation and talent. Well-known brands like Uber, Danske Bank and Cognizant have chosen Lithuania as a destination for investment and operations. 

What should MNCs be aware of when expanding into Lithuania?

If a company is planning to expand into Lithuania, it should be prepared for potential delays in the process. The local regulations for establishing a legal entity are often difficult to navigate. Furthermore, language barriers and cultural differences can trigger issues for those unfamiliar with the country and its best practices in business. Not only is establishing an entity an arduous process, but the labor law framework of Lithuania also offers strong worker protections. For HR teams, this will require great attention to detail and a keen understanding of local regulations and business customs.  

What do MNCs need to know about employment contracts in Lithuania?

Employment contracts in Lithuania are typically indefinite-term, with a formal, written contract of employment required for all workers. All employment contracts should specify the required details of employment, including salary, benefits, terms of termination, severance terms, notice periods, etc. To avoid legal troubles, the contract should be written in Lithuanian and maintain the euro as the currency. 

What role do employee benefits play in Lithuania?

Lithuania’s labor market tends to be candidate-driven, especially with the total population being relatively small. Supplementary benefits can go a long way in attracting and retaining top talent. However, building a benefits package for a Lithuanian workforce can be challenging and complex if the HR team is not familiar with local employment laws and business customs. 

Setting up benefits independently can take several weeks and sometimes it may not be done compliantly or effectively. It is highly recommended to work with a local expert who knows the marketplace well. 

What challenges might MNCs experience in Lithuania? 

While MNCs want to capitalize on the many emerging opportunities in Lithuania, there is a rather long list of risks and requirements they need to be aware of before taking the leap. Compared to some other European markets and the United States, Lithuania’s labor market is more candidate-driven and the labor laws tend to favor employees. This can create roadblocks for MNCs in hiring and managing a workforce in Lithuania, particularly if the HR team is unfamiliar with the local landscape.

How does the Employer of Record (EOR) hiring model support MNCs?

The EOR  hiring model is very useful for MNCs looking to take their first steps into Lithuania, as it allows them to harness the country’s talented workforce and take the market for a test drive before making a huge investment. 

With an effective EOR at their side, the MNC can mitigate the burdensome risks, requirements and restrictions that typically come along with hiring in Lithuania – while still being able to tap into the highly-educated, innovative workforce.  

What is GoGlobal’s approach to HR? 

GoGlobal’s local team is led by HR experts who each have a track record in successfully hiring and managing workforces in Lithuania. They are also well-versed in the neighboring Baltic states, fellow EU members and other key trading partners of Lithuania. 

When we partner with MNCs, GoGlobal takes the lead on all of the burdensome tasks involved in administering payroll and managing a workforce in Lithuania. For example, there are rigid requirements when an employee works overtime hours, including documented employee consent, or for when an employee must be terminated. Our team ensures these obligations are met – compliantly and cost-effectively. 

What makes the GoGlobal experience unique?

At GoGlobal, we embrace a global mindset but also maintain a dedicated team of local experts on the ground in Lithuania and every other market we serve. Our Lithuanian team is well versed in the regulatory environment as well as the country’s cultural customs. This empowers a customized, pleasant hiring experience for both clients and client-employees. 

How does the GoGlobal EOR solution operate?

Before onboarding a worker, GoGlobal’s team in Lithuania will meet one-on-one with the worker to outline how the EOR arrangement will work. After onboarding, that same dedicated team remains the point of contact for both your company and the worker. We are here to answer any questions that come up regarding payroll, taxation or benefits.  

What is GoGlobal’s goal in serving clients and client-workers?

As we service our clients and client-employees, we aim to instill agility, efficiency and peace of mind in the global hiring process. Through our tested and proven EOR solution, MNCs free their internal HR teams from the usual burdens of managing a cross-border workforce. 

As a result, our clients can focus on core business-growth activities while they also seize burgeoning market opportunities in Lithuania.

Find additional details on benefits and hiring in Lithuania or contact us to talk with an international HR expert.

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