VILNIUS - With the economy reaching unheard-of levels of growth, savvy entrepreneurs are entering the market with high hopes, sparking a bona fide startup fever in Lithuania. The past year has witnessed an unprecedented number of new businesses appear particularly in areas where the most concentrated economic growth has been occurring.
Riding on the back of the red-hot real estate market, Simtas Vienas Procentas (One Hundred and One Percent), a real estate firm specializing in high-end residential property, opened its doors to customers in Vilnius in January.
According to firm management, the start of the new year seemed like the right time to launch operations.
"We saw opportunities, and we decided to take advantage of them. Prices are rising, we're in the EU now. Everything looks positive," says Asta Jesmauskaite, acting director of the firm.
According to Jesmauskaite, starting a business in Lithuania from the ground up presents its own set of challenges, as well as possibilities, for success.
"The most difficult thing is to make our name well-known to people. We're new, so unlike firms that have been around for a long time, people don't know us. But on the other hand, I think that because we are new we can afford to be more aggressive in bringing in clients, which is to our advantage," she explains.
However, in spite of the optimism that new competitors in Lithuania bring to the overall business climate, the rash of companies opening up shop in the country brings with it a distinct set of concerns, chief among them the possibility of a "startup bubble."
Litinterp, a Vilnius-based firm offering translation and car rental services, has been in operation since 1992, the very twilight of capitalism in Lithuania. Having seen the ups and downs of business in the Baltic states, company director Algimantas Andrasiunas views the present startup craze with skepticism.
"We have seen a lot of business open recently, but I think there's a principle at work: If one store opens up on a street, in one year's time there will be 15 stores on that street selling the same thing. Of course, most of them will go bankrupt in very little time," he said.
Yet another worry for would-be Lithuanian tycoons is a burgeoning set of regulations, a condition that did not exist in the heady Wild East days of the early 1990s.
While greater state control of business practices should theoretically lead to a more stable economic environment and protection of consumer rights, some businessmen are wondering if the government may have gone too far by stifling creativity and expansion.
"When our business opened, with one license you could pretty much provide any service you wanted to. But now there are special regulations for everything. Lithuania is truly becoming a country of bureaucrats," laments Andrasiunas.
Nonetheless, to those who have only recently come on the scene, the current regulatory state of affairs – which includes a 60 litas (17.3 euro) registration fee for a proprietorship – appears largely acceptable.
"We hired a lawyer to help us with the paperwork of opening our business. I don't think we encountered anything particularly difficult," says Jesmauskaite.