VILNIUS - Following Dell's passing over Lithuania in favor of Poland for its new production house, business leaders and promoters have slammed the sluggish government for not making foreign direct investment easier.
The authorities did not try to lure Dell, the world's second largest personal computer maker, to Lithuania, Verslo Zinios business daily reported.
Dell is instead relocating a large part of its production from Ireland to Poland.
Mantas Nocius, managing director of the Lithuanian Development Agency, told The Baltic Times that Dell hadn't even considered Lithuania as a potential site.
"If you look at the magnitude of this contract, it is not realistic to think it could be done in Lithuania," he said.
Though Nocius said that he believes Dell chose Poland because of the country's large workforce 's something Lithuania simply cannot compete with 's in general he said that the country has a long way to go before it is a competitive destination for such investments, most of which are brought from Western Europe.
He said there were many reasons that a company from Western Europe, where most of the investment deals would come from, wouldn't choose to do business in Lithuania now.
"It takes one year to join two or three plots of land 's that is a lot of bureaucracy and companies don't have that long to wait. It discourages investors."
"The labor laws are too strict and this is another discouragement. We should be looking at Denmark where it is easy to hire and fire people," he said.
"Immigration laws are also a problem because if an executive lives and works here, it doesn't necessarily mean that his family can join him," Nocius added.
Kim Bartholdy, Chairman of the Committee for the Danish Business Club in Lithuania, told The Baltic Times that he has lived in Lithuania for 14 years and always encourages investment, but also has complaints about the ease of business in the country.
He said basic tax laws prevent businesses from making large investments in Lithuania.
"If you are a company that needs a highly educated and well paid staff, I would choose another country because of the social contribution taxes. In other countries there is a cap, but here it is 31 percent," he said.
"We encouraged them [the Kirkilas government] to put a cap on the social tax, but they thought we just wanted it cheap and didn't listen to us. We want skilled specialists to stay here and we want to invest."
British investors also find the same problems with taxes for individuals.
"British investors still find that to run a company in Lithuania involves too much bureaucracy. Also, the [business] tax on social insurance per employed person is still too high," Ieva Stakenait, acting executive director of the British Chamber of Commerce, told The Baltic Times.
Nocius said it is high time to fix the problems and to help businesses invest.
"The timing is right to try to get production and service centers from Western Europe into Lithuania because those companies are looking to survive, not to expand," he said about the opportunities coming to the new EU member states.
He thinks that among other things, it is a way to deal with the economic crisis.
"It won't resolve all the problems, but by sending the right signals and taking out all of the obstacles for investment, it could help."
Bartholdy, meanwhile, thinks that when the government amends their strategy, it will become easier for foreign investors to consider the country.
"There is too much bureaucracy here and lots of red tape. It makes it less attractive. I don't think Lithuania has understood this," he said.
