Business immigrants in Lithuania must pay salaries amounting to 3,000 EUR
The Seimas is considering the idea of easing the requirement for entrepreneurs from third countries who want to establish themselves in the country to pay their employees an average salary corresponding to at least two of the country's average wages (3,132 euros).
Romas Stumbrys, head of the Association of Business Immigrants and Investors, is convinced that the proposed changes to apply the salary limit of one AEP instead of two would at least slightly improve the situation of foreigners setting up business in Lithuania. According to him, the current regulation not only scares away potential investors, but also frustrates entrepreneurs who have already arrived in the country. In 2016, the Law on the Legal Status of Foreigners (UTIP) established a provision requiring business owners who do not have a permanent residence permit in Lithuania to pay their employees a salary of at least 2 AEP. This was aimed at preventing the establishment of fictitious businesses in the country.
R. Stumbrys explains that a foreigner who wants to establish a business must first obtain a visa and operate for 6 months before he can submit a request for a temporary permit to the Migration Department. Such a person would have to wait another 5 years before he could apply for a permanent residence permit in Lithuania. All this time, until such a permission is granted to the entrepreneur of the company, he must pay his employees twice the national average salary. The representative of business immigrants is convinced that such regulation primarily affects small and medium-sized entrepreneurs who would like to invest 100-200 thousand euros in Lithuania. In his opinion, the current procedure protects not only fictitious business founders who would seek to manipulate the current procedure and thus obtain a residence permit in the country, but also investors who are really interested in the prospects of the country's market. "One of the goals is to prevent fictitious companies from being established and real businesses to come to Lithuania and carry out their activities.
According to him, entrepreneurs, assessing the situation, realize that it is difficult to pay a salary of more than 3 thousand euros, only after starting the activity. Therefore, they decide to move to neighboring countries where this provision does not apply. "Before establishing a business, they learn what the wage market is like, what the minimum and average wages are in Lithuania. Let's take an example, if an entrepreneur needs one or two employees to start and he needs to immediately pay 2 average salaries, this is almost impossible. Seeing all this, business immigrants choose Poland, Latvia, other countries and refuse to invest in Lithuania", claimed Romas Stumbrys. Also, the representative of business immigrants says that since the Seimas adopted the currently valid law in 2016, some businessmen have decided to leave Lithuania due to the introduced requirement. "Uncertainty and not knowing whether the law will be extended when obtaining a temporary permit is frustrating.
A business immigrant comes to the Migration Department already having a temporary permit, but all the time he is afraid to apply for an extension, because it needs to be extended to 5 years. He is having the same problems again. Again, the Migration Department is looking for various reasons to hang on and not extend his temporary permit or cancel it. This is the problem. "Hundreds of businessmen left precisely because, after the introduction of 2 AEP in 2016, they could not fulfill those requirements, because it is difficult to pay such salaries immediately," said R. Stumbrys. ELTA reminds that the amendments to the Law on the Legal Status of Foreigners initiated by Andrius Bagdonas, a member of the Liberal Movement (LRLS) faction, are currently being considered in the Seimas, which aim to change the current provision and provide for the requirement for entrepreneurs from third countries to pay at least 1 AEP average salary, instead of the currently applied 2 AEP. The initiator of the amendments is convinced that in this way, more flexible conditions for entrepreneurs would be established, without removing the safeguards regarding the establishment of a fictitious business in the country. At the submission stage, 67 members of the Seimas supported these amendments, 3 voted against and 22 abstained.
However, precisely that regulation does not automatically provide an opportunity for real investors who would actually carry out activities if we are talking about small, medium-sized businesses. One point is that there should be as few fictitious businesses as possible, but on the other hand, it deters others who are actually thinking of coming to Lithuania," said R. Stumbrys to Eltai about the currently valid procedure. The requirement to pay a salary equal to 2 AEP was also applied during the pandemic. The head of the Association of Business Immigrants claims that the requirement to pay twice the national average salary during the COVID-19 pandemic was also applied to those entrepreneurs whose activities were restricted due to the quarantine. According to R. Stumbrys, the Migration Department even terminated the temporary residence permits in Lithuania for some businessmen, because the average salaries in the company, which decreased during the pandemic, no longer reached the expected limit. "One businessman from Ukraine had a cafe. When the pandemic started, the quarantine closed it. The Migration Department came, said that you do not pay two average wages, and took away the temporary permit. The man left," he said. "Another businessman, from Belarus, was in business for 15 years, living with a temporary permit. Last year, the Migration Department came and checked. Two average wages are not paid, because the pandemic emergency, quarantine, economy has slowed down, but the Migration Department did not care the reasons and His temporary permit was revoked. There are many examples of the stories of business immigrants from third countries "shared R. Stumbrys". The representative of business immigrants claims that the current requirement in Lithuania, forces potential investors to choose neighboring countries.
