Business
Kaunas FEZ
2021 06 09
Clients of Kaunas FEZ exempt from Infrastructure Development Fee

On 1 March 2021, the Kaunas District Municipal Council approved the amount for the municipal infrastructure development fee, which will be applied to the development and expansion of new facilities.

In May 2020, the Republic of Lithuania Law on Municipal Infrastructure Development entered into force, which provides for a one-off infrastructure development fee for developers of new buildings under construction. The fee amount is different throughout the territory of Lithuania and depends on the priority development plan for a specific territory.

In the territory of the municipality of Kaunas district, the amount of the infrastructure development fee will vary from €1 to €40 per square metre, taking into account the level of infrastructure development. However, companies currently located in the Kaunas Free Economic Zone (FEZ) and to be established in the future will be exempt from this fee.

“Kaunas FEZ is an important object for the state’s economy, thanks to which technologically advanced foreign capital companies enter the Lithuanian market and local businesses expand. State aid is a special advantage of the FEZ, creating a financially favourable environment for investment in Lithuania. The municipal infrastructure development fee amounting to zero gives more weight to the attractiveness of the FEZ compared to commercial plots outside the FEZ,” comments Vytautas Petružis, Managing Director of Kaunas FEZ.

Clients of Kaunas FEZ already enjoy various tax benefits. Kaunas FEZ has a property tax relief, exempting companies from paying until 2045. In addition, manufacturing and logistics companies investing more than €1 million or service companies investing more than €100 thousand and having more than 20 employees benefit from a corporate tax exemption: for the first 10 years, a 100% reduction is granted, for the following six years – 50%. From now on, irrespective of the size of the company and the amount of investment, companies will also be able to benefit from the infrastructure development fee exemption.

Kaunas FEZ’s first investor was established in 2005. Currently, 41 foreign and Lithuanian capital companies operate in the industrial zone, which created more than 5,700 jobs and generated 0.31% of the total Lithuanian domestic product. Kaunas FEZ has attracted €780 million of direct investment since the establishment of the first investor.

Source: Visuals by Kaunas FEZ