The Republic of Lithuania
Lithuania is one more Baltic country with fast-growing economy. The population of the country reaches almost 3 mln people. The unemployment rate among the working population is relatively low, about 7%. Level of GDP has grown last year and continues to grow in this year. Since 2015, Lithuania has become a new popular destination for IT business. In order to attract new companies, the government of the state builds new offices, establishes initiatives that promote the country on the global arena.
Country Description
Lithuania is one more Baltic country with fast-growing economy. The population of the country reaches almost 3 mln people. The unemployment rate among the working population is relatively low, about 7%. Level of GDP has grown last year and continues to grow in this year. Since 2015, Lithuania has become a new popular destination for IT business. In order to attract new companies, the government of the state builds new offices, establishes initiatives that promote the country on the global arena.
Income Tax
Personal Income is imposed with the flat tax rate of 15% to both residents and non-residents of the country.
Corporate Income Tax (CIT), in accordance with the Lithuanian legislation, amounts to 15%, however, there are some exemptions that may be applied towards the taxation of a corporate income. These may be
- 0% is applied towards small companies which meet certain regulations (e.g. first year of operations)
- 15% is applied towards small companies which meet certain regulations as well as companies involved in agricultural activities which meet certain regulations
Social Тax
Social Security payments are made by both individuals and employers and comprise of both Social Security Tax and Health Insurance contribution.
For employers the rates are:
- Social Security Tax – 27.28-29.60%
- Health Insurance contribution – 3%
For employees these rates are:
- Social Security Tax – 3%
- Health Insurance contribution – 6%
Notice Period
In case of termination of an employment agreement between the parties, the notice period lasts for
- 5 working days – in case of employment 1> year
- 10 working days – in case of employment 3+years
However, the notice period is subject to discussion between the parties and may be neglected upon the mutual consent.
Dismissal Conditions
Lithuanian legislation envisages the following conditions for a dismissal, however, it doesn't restrict any specifics written in the agreement between the parties.
- Reasons related to economic and technological aspects, restructuring of the company’s activities, results of an employee, etc.;
- breach of employment duties, e.g. unreasonable absence from work for a whole day; poor performance within the last 12 months;
- upon a court decision, when an employee is unable to perform employment duties or work according to a medical conclusion;
In most cases of dismissal, financial compensation is envisaged. Yet, if an employee fails to perform his duties effectively, s/he may not be able to receive any compensation.
Hiring Period
Up to 2 months
Office Rent
Office rent in the Vilnius varies between $10-20/m2. In Kaunas, the second largest city of Lithuania, this number varies between $7-15/m2. It depends on a class of office and furniture available.
IT Headcount
The local IT market amounts to 31.5K of specialists. In Lithuania, there are two main IT destinations – Vilnius and Kaunas. Owing to the EU membership, the country’s IT market is extremely attractive to foreign customers and companies. There is the fastest public Wi-Fi network in the world. The market is introduced by the direction of game development and such companies as Game Insights, Jet Cat Games, and many others. Many different events are held in Lithuania every year. Key expertise of the Lithuanian engineers is distributed mainly in such areas as Java, Oracle, Microsoft, HTML, PHP, JavaScript, CSS, XML, etc.
IT Graduates
There are 23 educational institutions, however, not all of them provide tech education. Classes are conducted in Lithuanian, Russian, or English. However, education fee in Lithuania is much lower than in other European countries and the diplomas of these schools are valid in all European countries. Therefore many foreign students find Lithuania attractive and come there to get high education. In Lithuania, almost 8K tech specialists graduate from local universities annually, and 2000 of them are tech graduates.
The main institutions of Lithuania providing IT education:
- Kaunas University of Technology
- Vilnius Gediminas Technical University
- Klaipeda State University of Applied Sciences
Average Salary
The salaries in Lithuania’s IT market are amidst the highest in Europe taking into account the experience and position:
- Junior Software Engineer – $1100
- Middle Software Engineer – $2400
- Senior Software Engineer – $3150
- Technical Lead – $4000+