Working in Lithuania?
Working in Lithuania
With a total GDP of 78.95 billion USD, or 26,700 USD per capita in 2014, Lithuania has the largest economy of the Baltic States. Although Lithuania was hit hard by the last financial crisis, it has recovered faster than any other nation in the European Union, and has experienced growth of its total GDP every year since 2009.
Its economy is split into three main sectors: services (68% of total GDP), industry (28%), and agriculture (4%). Since declaring itself an independent state in 1990, Lithuania has been making the transition from an industrial to a knowledge-based economy, focused on high added-value products and services, and is now one of the leading European nations for biotechnology, communications, mechatronics, and information technology.
This is demonstrated in the number of international technology, food, and pharmaceutical firms that have offices in the country, including the Barclays Technology Centre, GlaxoSmithKline, Thermo Fisher Scientific, and Kraft Foods.
Expatriates working in Lithuania tend to work in highly skilled positions for technology, communications, or food processing companies, or as English teachers.
Work Permits for Lithuania
Whether or not you need a permit to work in Lithuania depends on your nationality. As it is a member of the European Union, EU nationals working in Lithuania do not need a permit in order to do so. However, they will need a residency permit in order to stay in Lithuania for more than 90 days.
If you are a foreigner expatriate from a non-EU nation then you need to apply for a permit to work in Lithuania. You should apply for this permit before moving, and need confirmation from your prospective employer that you have already secured work in Lithuania. These work permits are issued for a period of up to two years, depending on the individual case, but can be renewed after the initial time period has finished.
However, as Lithuania is trying to deal with unemployment amongst its own citizens, non-EU nationals may need to demonstrate that the skills required for their prospective job role cannot be found elsewhere in the country. Applications for work permits should be made to the Ministry of Social Security and Labor.
Taxation in Lithuania
Expatriates living and working in Lithuania are required to pay income tax on their earnings. Unlike many European countries, Lithuania has a flat rate for income tax. This means that however much you earn whilst working in Lithuania, you will only have to pay 15% income tax.
However, expatriates should be aware that there is also a 6% health insurance contribution and a 3% social security contribution added to this 15% rate, bringing the total taxes on income up to 24%.
Valued Added Tax is set at 21%, and Corporate Tax at 15%, with a lower rate of 5% for small businesses. The flat tax on income and other low tax rates mean that tax revenue in Lithuania is one of the lowest in Europe, accounting for only 32.2% of the country's total GDP for 2014.