The news of the visa-free travel with the EU spurred the interest of Ukrainians not only in tourism, but also in the opportunity to live and do business in Europe. One way to simplify the launch of your business in any EU state is to obtain a residence permit in the Baltic States
Why the Baltics?
Lithuania and Latvia have a common history with Ukraine. And it is not limited to several decades of stay in the USSR – this era covers almost two millennia.
Hence the advantages: in these countries, people understand the Russian / Ukrainian language, and population is close in mentality and very friendly. This is shown by the figures. About 40,000 foreigners now live in Lithuania, whereas 6000 of them are Ukrainian citizens. In Latvia, about 6,500 out of 90,000 foreigners are Ukrainians.
About the migration programs in the Baltic States we talked with the founder of the FastMigration, Linas Kliukas from Lithuania.
“Obtaining a residence permit for our clients is more often caused by the desire to permanently reside in the Baltic countries or to invest, for example, in real estate,” says the founder of FastMigration, relying on close cooperation with Profithill, a company managing investment in overseas real estate.
The path to the citizenship of Lithuania and Latvia begins with the obtainment of a temporary residence permit (TRP). Both countries allow, after 5 years of holding temporary residence permit to receive a permanent residence, and after 5 years more – citizenship. At the same time, Lithuania and Latvia offer much more accessible migration solutions than other EU countries.
In Lithuania today there are two main directions for migration through business.
The first option is to become a shareholder of a local company.
- Your share capital must be at least 14,000 euros and be at least 1/3 of the total capital.
- You must employ Lithuanian citizens and pay them a salary of at least € 1650 per month.
- There are requirements to the company itself: before your application for residence permit, it must have been working for at least six months.
Having fulfilled these 3 requirements, you and your family receive a residence permit for a period of 2 years.
The firm can have 3 shareholders and a director. This allows you to divide costs by 3-4 partners.
“It is an immigration mechanism that is quite effective, because the shareholder’s position gives many freedoms, including accommodation in Lithuania or Europe,” Linas Kliukas said. The residence permit is renewed every 2 years.
There is also an alternative program that allows you to start expanding your business through Lithuania. It was launched recently, in 2014.
This method allows foreign companies to open a representative office / branch and transfer their employees to work in Lithuania. The main requirement is that the parent company should be operating, and the employee you send to the branch office should work for at least 1 year.
The plus of this program – does not require large expenditures. If it is necessary to employ local citizens, to own a part of the company (and this is a considerable expense), then for the branch, there are no such requirements, because it performs representative tasks. There are no requirements for financial indicators, turnover, employment. The residence permit for this program is issued for 3 years (or 2 + 1) for 3 participants and their families.
The minus of the program is a limited period of residence permit. It is issued only for 3 years, and then the program must be changed.
“This method makes it possible to live relatively cheap in Lithuania for 3 years, to understand how much you like here, and then to switch to another program – for example, to open a company,” comments the head of FastMigration. After 5 years holding the residence permit you can apply for a permanent residence permit (PRP).
To obtain it, you must fulfill 3 basic requirements:
- understand the language of Lithuania.
- know the constitution of Lithuania.
- live in Lithuania or the EU.
Latvia offers 4 programs for migration through investment / business. They can be divided into passive (real estate and bank deposits) and active (investment in business). The most popular program is through the purchase of real estate.
“The main investor must invest at least 250 000 euros. If the choice has fallen on the real estate of Riga or Jurmala, it should be a single object, in other regions it is possible to purchase 2 objects”, says Linas Kliukas.
Under this scheme, residence permit is issued for 5 years for the whole family, but it must be renewed annually. When receiving a residence permit, a state duty of 5% is paid. The amount of investment is rather big, but the plus will be the opportunity to take out a loan for the property (50-70% of the cost). In addition, you can lease objects or even sell them by returning their investments.
With bank deposits, the situation is similar. The main investor must deposit at least 280 000 euros for a deposit and pay 25 000 euros of state duty. The residence permit is also issued for the whole family and is renewed annually.
Plus of this scheme – the return of investment: the entire amount at any time can be refunded.
Among the “active” programs the most interesting are membership in the board and investment in the share capital. Choosing the first option, you become a member of the board of the local company.
It must be paid 22,000 euros per year of any taxes (including own taxes).
When receiving a residence permit for the whole family, a state fee of 10,000 euros must be paid. The most attractive moments of the program: no capital investment is required, the number of members of the board is unlimited.
The second possibility: to invest not less than 50 000 euros in the share capital of the company. The firm must pay taxes (any) amounting to at least 40,000 euros. When receiving a residence permit for the whole family, a state fee of 10,000 euros must also be paid.
Positive moment: the company allows up to 10 shareholders, while the amount of annual taxes can be divided among them.
The requirements for permanent residence are the same as in Lithuania: knowledge of the language and the constitution, plus constant living.
“We have a growing number of Fastmigration requests from Ukrainians for business relocation,” – said Linas Kliukas. Advantages of such solution are easily illustrated by examples of salaries: 170-250 euros in Ukraine, 700-1000 euros in the Baltic States, 2000-3,500 euros in Western Europe and Scandinavia.
Someone sees a contradiction here, but the expert believes that the Ukrainian business and Ukrainian specialists are waiting for both in the Baltics and in the rest of Europe.
After accession to the Schengen zone of the Baltic States because of the emigration of local citizens, there is a lack of qualified personnel. But investors from Scandinavia and the rest of Western Europe continue to enter the region. There are several reasons why they choose the Baltic countries to start a business. One of the main ones is the search for good specialists. At the same time, cost reduction for such investors is not a priority.
To fill the shortage of the labor market, the Lithuanian government approved a list of 5 working specialties and 27 highly qualified professions.
“Most of all arrived in the past year to work in Lithuania – the Ukrainians. What does it mean? That your specialists have already established themselves in the region as reliable employees, “the founder of Fastmigration emphasizes.
So, to transfer business to the Baltic countries, there is both a medium and an appropriate time.
The most popular options are business trip or establishment of a branch.
According to the law, any employee can be sent to Lithuania if an agreement is signed between a Lithuanian and a foreign company. No labor permits are needed. You can send your employee to Lithuania for up to 1 year, if your company works in Ukraine for more than 6 months, and the employee has been working for at least 3 months.
In this scenario, the employee is issued with a national visa D, and all labor relations remain between him and the Ukrainian company: that is, all taxes are paid in Ukraine. However, if an employee lives in Lithuania more than 183 days a year, you will have to pay a personal income tax – 15% of the Ukrainian specialist’s salary.
The visa D is issued within 1-2 weeks, with it is possible to work only in Lithuania.
The second option is to open a representative office or a subsidiary company and formalize labor permits for it. Opening the company will take time, and the salaries of your employees will be tied to Lithuanian. But the specialists will be able to work more than 1 year and on behalf of the company you can send them with work assignments to the EU.
Thus, for the expansion of business in Europe, the opening of a representative office in the Baltics is the optimal solution.
Fastmigration is a partner of ProfitHill, an expert in managing investments in overseas real estate. Together, these companies provide a wide range of services in the areas of investment, immigration and business immigration in the CIS and Europe. Fastmigration helps companies and individuals competently transfer their assets and business to another country, invest in real estate, obtain residence permits and citizenship in different EU countries, and also offers related services.