FATF status

Lithuania is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Lithuania was undertaken in December 2023. According to that Evaluation, Lithuania was deemed Compliant for 8 and Largely Compliant for 28 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 1 of the Effectiveness & Technical Compliance ratings.

Corruption in Lithuania is perceived as less of a barrier to business, with a significant decline in reported corruption experiences among executives since 2019. While large foreign investors generally find the environment manageable, small and medium enterprises (SMEs) face challenges from petty bureaucrats and excessive red tape, leading to complaints of extortion. Despite the establishment of the Special Investigation Service to combat corruption and recent legislative improvements aimed at enhancing transparency, issues such as nepotism and high-level corruption persist.

Lithuania has a diversified economy that has shown steady growth since the 2009 economic crisis, with a GDP growth of 5.1% in 2021 and a continued growth of 2.2% in 2022 despite challenges from the COVID-19 pandemic and geopolitical tensions. The country has a well-educated, multilingual workforce and advanced IT infrastructure, but faced high inflation rates exceeding 20% in 2022 due to rising energy prices, which slowed to 1.2% in 2023. Lithuania's economy is characterized by a significant services sector, accounting for 63.1% of GDP, and it has attracted substantial foreign investment, particularly from the United States.

Lithuania presents a favorable investment climate characterized by equal treatment for foreign and domestic investors, minimal restrictions on profit repatriation, and various incentives such as tax concessions for small companies and strategic investors. The country has established seven Special Economic Zones that offer additional benefits, and its government agency, Invest Lithuania, serves as a one-stop-shop for facilitating foreign investments. Despite some bureaucratic challenges and transportation barriers, Lithuania's well-educated workforce and growing sectors like IT and biotech make it an attractive destination for investors.